In a time when entrepreneurs and VCs are the new rock stars, cloud computing, big data and consumerization have made even enterprise startups like Box, Cloudera and Yammer sexy. And now thanks to EMC’s acquisition of Pivotal Labs and a massive new round of funding for Appirio, even consulting startups are starting to see some of that love. Phil Wainwright speculates that Appirio could even go public.
“The last time we saw start-up services companies considered as IPO candidates was back in the dot-com boom days of now forgotten e-consultancies such as Viant, Scient, Razorfish, USWeb/CKS and Organic,” writes Wainwright. “But whereas those newcomers merely repurposed the high-cost IT services project model to a new market, Appirio and its ilk are transforming the model into something quite different.”
Meanwhile, consulting continues to change thanks to cloud computing and other technologies. In particular, APIs (application programming interfaces) are changing not just how software is integrated in the enterprise, but they are providing business leaders with new streams of data. These changes are trickling down to consultants.
From System Integrators to Cloud Integrators
First and foremost APIs enable enterprises to take advantage of cloud services they might otherwise not have been able to use. APIs make it possible to bring a software-as-a-service application and integrate it into a legacy on-premise system, or to extend the functionality of a cloud application to support an existing business process.
Cloud Sherpas SVP of Marketing Michael Cohn provides the example of an advertising agency company that switched from Lotus Notes to Google Apps. The company had a workflow application that scanned Lotus for active users and put these into a directory so that staff could plan projects. The application connected to Domino and LDAP. When the company migrated to the cloud, the app needed a new home. Cloud Sherpas was able to rebuild this app on Google App Engine and interface with Google Apps’ APIs.
Companies like Cloud Sherpas and Appirio have built entire companies on the cloud, and that’s largely thanks to APIs. Wainwright sees companies like Appirio as competitors to large, established firms rather than acquisition targets. But the established companies are working in this area too. This year IBM PartnerWorld was full of companies doing cloud consulting. And according to Joe Fitzgerald, the national lead for Cloud Application Platform at EMC Consulting, customers are increasingly asking about REST APIs when they have a requirement to integrate with cloud services or to offer a public cloud service to their customers.. EMC is doing quite a bit of consulting in cloud and has recently revamped its entire cloud consulting business.
Integrations are Getting Cheaper and Easier
As a result of the rise of cloud applications and APIs, integrations are getting cheaper and easier. Yammer CTO Adam Pisoni told Dennis Howlett recently (emphasis mine):
In large organizations we’re relying on the Deloittes. They did a rollout to 200,000 people. They said it was the fastest software rollout. They’re going to actively make it part of their practice, we’re talking to them on this now. The problem for the consultants is that social software is not highly configurable. We try to make it so that it is very easily rolled out and integrated and in many ways that’s not what they’re looking for. The majority of the cost is around change management. It’s definitely its a mindset shift for them.
Pisoni said “social software” but the same sentiment applies to many different SaaS applications. Some, like ERP and certain CRM systems, are vastly more configurable than others, but the new wave of enterprise applications definitely require a new way of thinking for consultants and SIs.
Dave Messinger, chief architect and evangelist for CloudSpokes at Appirio, agrees with Pisoni and points out that most “custom” solutions that customers build are really not as custom as they’d like to think. “In software development, code re-use is a holy grail,” he says. “APIs take this to a whole new level.” SIs are now turning to integration-as-a-service providers like e SnapLogic, Talend and Informatica to make integration go quicker and easier.
Cohn of Cloud Sherpas agrees with Pisoni’s statement, but emphasizes that there’s still quite a bit of customization that can be done – such as the above mentioned e-mail scanning example above. Fitzgerald of EMC Consulting points out that the documentation for public facing APIs can be very poor, and customers aren’t always sure what functionality can be accessed through an API. That’s one reason to hire a consultant with experience with a particular application and API rather than try to build integrations in house.
Fitzgerald also points out that you can use the REST architecture for more than just the Web. He says EMC builds many solutions for clients based on a message bus that implements the AMQP standard. One thing EMC and other consultants can do is take an SaaS application’s public facing HTTP API and turn it into a service available over a message bus for internal use in an internally meaningful way. This is especially helpful when many different departments within an organization need to access a resource, and helps to avoid a proliferation of point-to-point integrations.
The Channel is Getting Streamlined
One impact of the trend towards SaaS applications customized through APIs is a streamlining of the channel. Cohn points out that there’s no longer a need for a complex channel consisting of vendors, distributors, resellers and consultants. Distributors can be take right out of the picture, while resellers and consultants merge into one.
1. Don’t require that I waste my time on a sales call – or, worse, in a “webinar” – before I can give you my money. Instead, provide all the information I need about your product on your website.
2. Don’t make it hard for me to try your software. If I can’t play with a trial version or sandbox immediately, I’m moving on.
3. Don’t hide your pricing behind a sales process, and don’t play pricing games. I can find and talk to your other customers basically instantly in order to determine what they paid for your product and if they’re getting the value they expected from it. I will do this. So just put the price of what you’re selling on your site and skip the games.
Simple is a startup, and startups don’t have the sort of procurement resources enterprises do. But enterprises buyers are increasingly turning to turnkey SaaS solutions to solve problems and this new channel is making it easier than ever for buyers to get started with new solutions and services right away.
Photo by Karin Dalziel>