Disclosure: This particular friend works for one of my competitors thus the caginess of some of the answers. That being said, I think the debate invites reflection.
[Friend] While I can comment extensively on this topic I’m professionally prevented from doing so . The one major thing that you didn’t really cover is the potential business impact that a true cloud SaaS service like this can do. It’s a risky architectural move because it requires a tremendous amount of energy to build a true multi-tenant SaaS solution that can be updated, upgraded, troubleshooted, self-serviced, etc. The reward however could be incredibly high. The operational delta between any of the PLM solutions from any of the vendors and a true SaaS cloud architecture is significant, so they really are going to need to green field this and do it right at every level to make it work. If you look at the market the other interesting thing, what is the #2 Cloud service SaaS offering of an enterprise product besides Salesforce.com? Please do not include desktop applications like GMail, Google Docs, Office 365. So, what’s the true and undisputed #2 enterprise SaaS application?
[Friend] I wouldn’t count that either. The #2 data related product. Desktop apps as cloud hosted infrastructures are really easy compared to data centric apps. Also last I knew, Dynamics CRM has its own dedicated infrastructure, not really cloud hosted but it could be debated as a potential #2. Finding the #2 data centric enterprise app should tell you just a little about the market. Also fb, g+ and picture albums are not really enterprise data even though they make up the greater majority of SaaS apps.
[Me] Is this an open question or do I keep guessing 😉
[Friend] It’s an open question. I’ve yet to find anyone that can identify the clear #2 enterprise app that has any structured data to it. Webex, office 365, google docs, are all all non structured data and are actually desktop style apps than they are data related apps.
[Me] Fascinating. Now, that means that either salesforce is miles ahead or that we are ignoring some other sector…btw, I would be inclined to see PLM on the Cloud more of a PaaS because of the massive amounts of interrelated data and inherent workflow. That’s where I find Nexus so interesting. History will tell if Uncle Carl is bluffing or if his undercover acqusitions in 2011 and 4% increase in R&D budget will pay off, big time.
[Friend] The real compelling story is when you can get a full SaaS setup going that is completely self service, automated upgrades, etc. mom sure that they’ll have a good PaaS story along the way too. The real issue is none of that though. It really comes down to how companies are willing to share (share resources in a multi or single tenant manner) the most valuable/critical data of theirs in a model like this. Considering that it won’t work for highly regulated environments like medical device or most aerospace and defense the real uphill battle is to create a very secure and flexible environment that a plm customer will accept in the end. I can’t say much else beyond that.
From my reading about Nexus, it isn’t multi-tenant because they do mention separate databases per client. So, the possibility of seeing a competitor’s data is pretty minimal – close to non-existent. As for threads of hacking, most hackers are actually INSIDE the companies being hacked so there is an valid argument that as long as Amazon isn’t peeking into the database, you may actually be safer on the Cloud than behind your intranet. There was that Wired article that I mentioned last night about US government snooping that is a bit worrisome even if it perhaps errs on the side of paranoia.
I think that the potential savings will eventually outweigh reticence that comes from security/break-in concerns. The key is ensuring that backup and recovery and all the other general system administration stuff that my friend referred to are entirely hands-free and rock solid. The first time that a company loses their CAD data or BOM data due to some irrecoverable cloud failure will spell the end to the whole experiment. I think that psychologically, we need to feel close to our data (I am of course using the royal “we” for myself and my fellow geeks), and so that would be what would bother me.
That being said, using computers instead of paper is tenuous as it is. To take an example from daily life, how many times has a family member called you in a panic because they just “lost their hard drive” or their iPhone died and they lost all their photos and, naturally, they had no backup. At companies, it works the same way. Backups are often corrupt or misplaced or in unusable formats. And since nothing gets printed out anymore, your data security is no better than that USB backup disk you have. Enter the Cloud. As long as, say, Google, can be trusted, your Gmail is safe and sound on their servers. I have had very few Gmail outages to be honest and never lost anything. I can’t be sure that my account hasn’t been compromised, but then I have no strange $5000 charges coming from Xi’an or Kamchatka either so I am probably OK. My point is that, if done correctly (and Gmail / Google Docs / etc is VERY well thought out), my data is perhaps more secure on the cloud then on my own computer. [Note: I am using Time Capsule for backups and iCloud for my new photos now. I have two full iTunes backups (460GB each) just in case, so I am probably OK. My problem is that I am too cheap to pay Amazon, Google, or Apple a monthly fee for storing all of this stuff (the 25k song limit on iTunes Match notwithstanding) so I am currently not fully cloud-based with my personal stuff. I suppose I should price out what a tera costs now, but haven’t taken the time to do so…]
Does this extend to corporate data volumes? I have to believe that if it doesn’t yet, it certainly is getting close. More and more larger companies are soliciting cloud vendors and nearly everyone is rushing to put out cloud-based apps. Its a brave new world…
And, of course, if someone finds the #2 data-centric, enterprise SaaS or PaaS behind salesforce.com, please comment here 🙂