Enterprise software vendors would have us believe that enterprises are flocking to The Cloud, meaning they are subscribing to remotely hosted utility systems and services rather than licensing and hosting them on premise. The oft-claimed benefits are efficiency (only pay for what you use), simplicity (no more on-premise software) and agility (the software utility can be configured at any time to release new capabilities).
Cloud represents the end-game in selectively commodifying enterprise software — when there is no useful business differentiation in how you do payroll, sales, CRM or provisioning, choose a utility service and concentrate on differentiating your product or service in other ways. Startups with no legacy can use cloud services exclusively but established enterprises may have enormous investments in business systems and data. Because these organisations cannot do a ‘rip-and-replace’ we are facing on open-ended period of hybrid enterprise architectures in which cloud and on-premise systems must integrate.
Another integration scenario arises when two cloud services maintain similar or related business data — a client or employee record, for example. To avoid a return to ‘islands of automation’ or business data silos, these business data in the cloud must be linked and synchronised via some form of integration. Cloud integration, also known as iPaaS (Integration Platform as a Service ) is becoming hot property. SAP, for example, has stated that ‘integration is the key to achieving the benefits of cloud’. Some of the independent cloud-based integration products include the likes of CloudHub , Informatica Cloud and Dell Boomi.
The major enterprise vendors have been aggressively investing in integration capabilities and iPaaS offerings, typically by acquiring products to firm up their offering in the face of new cloud-only competitors. It may be possible to procure most or all of the desired capability in the Cloud from one or more of the global vendors.
For example, SAP recently launched their on-premise payroll product as a cloud offering, with integration to Employee Central. Their cloud offering incorporates SuccessFactors (an acquired company), an HCM/talent management platform. This is an amalgamation of existing products rather than a ground-up multi-tenancy re-integration so the integration may still be in its infancy.
Meanwhile the independent cloud integration vendors (e.g. CloudHub, Informatica, Dell Boomi) offer connectors to dozens or hundreds of SaaS APIs, including Salesforce.com, SAP Customer OnDemand and Oracle Siebel.
Enterprise software vendors are likely to offer the essential integrations between their Cloud offerings, guaranteeing end to end integration reliability and performance. This should remove the integration risks associated with using multiple cloud offerings. However, they may not be able to offer the features, cost-effectiveness, differentiation and responsiveness that the niche cloud vendors can.
The result is the re-emergence of the ‘Enterprise versus Best-of-Breed’ debate of the 1990s, only with packages reinvented as Cloud services. The old debate concerned the trade-off between guaranteed integration (ERP) versus leading functionality and user experience with no guarantee of integration. Enterprise software vendors will claim to support full integration between their cloud offerings this should not be assumed from a cloud portfolio assembled via hasty acquisition of product companies. Niche cloud
services may offer rich functionality and superlative user experience but with unproven integrations. Independent iPaaS vendors offer subscription platforms with fancy integration capabilities but do not own the end-to-end integration.
For enterprise buyers it is very much caveat emptor. The fine print in the Services Agreement on support for integration is critical. Not getting this right could result in some embarrassing finger-pointing. In The Cloud, no one can hear your integrations unexpectedly snap! If this happens, you want a vendor bound to unambiguous SLA terms to ensure the pieces are quickly put back together.