Beware of wolves in cloud clothes

NetSuite (NYSE:N) International VP and general manager Craig Sullivan has warned of a “me too” culture around cloud computing, as many traditional software firms look to carve out their own space in the cloud.

Sullivan believes many software vendors are going to market with what they label ‘cloud’ offerings, but in reality, the products lack the scalability and functionality of a true cloud offering, describing some firms’ propositions as a “hairball – multiple applications tied together with Sellotape or bits of string.”

He says it’s a natural progression for traditional software firms to move into the cloud, otherwise they would “be foregoing the fastest growing aspect of the IT industry these days, as more and more customers are putting their IT spend into the cloud.”

Sullivan is, however, cautious about these firms’ descriptions of themselves as ‘cloud computing’ companies. “I call it the ‘wolves in cloud computing clothing’ phenomenon,” he says, claiming there is a “me too” culture around the cloud.

He tells Channel Pro: “We believe the [technology provider] should be founded after the internet existed – the architecture needs to be multi-tenant for economies of scale. You need to be able to configure or customise applications that make sense for the business. The old architecture falls down under those criteria in terms of customisation.”

Referring to Sage’s recent entry into the cloud, Sullivan says he welcomes the vendor’s arrival, but describes its online proposition as “a relatively modest basic offering... but as yet has not delivered on the promise cloud can bring to small and growing businesses.

“Many vendors, including Sage in the midmarket and Microsoft with Great Plains – any vendor that doesn’t have true architecture from the ground up – are positioning themselves as cloud vendors by creating an offering a traditional client solution over the web from the datacentre environment. It’s a single tenant offering, with no economy of scale that a true cloud solution does.”

Sullivan claims a true accounting or ERP technology should include social CRM, and be able to integrate or data exchange with other applications. “NetSuite is not just a cloud application. It’s a suite of applications designed to work across the entire organisation,” he adds.
In January Sage unveiled Sage One, an on-demand and pay monthly accounting software and support services aimed at small businesses. At the time of the launch, Simon Black, MD of Sage Online defended the offering, telling Channel Pro’s sister publication IT Pro: “Sage One isn’t about packing in functionality, quite the opposite in fact. It’s simple, secure and low-cost software designed for business users who want to take control of their finances without needing any specific accounting knowledge or IT skills.”
“The UK accountancy profession has been a very slow adopter of cloud-based systems, particularly when compared to their European counterparts,” Anders Bjørnsbo, UK operations director of cloud-based accountancy system E-conomic said recently. “The fact that Sage has entered the market – albeit belatedly – will mean that the profession will now really have to sit up and take notice.”