PCoffee SaaS U Keynote 20100126


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Keynote presentation to Dallas SaaS University conference: "Prospects for SaaS in the Obama Economy"

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PCoffee SaaS U Keynote 20100126

  1. 1. SaaS in the tes Ma n d a CIO ctive Obama CEO N eed s Produ tional Reliab le Economy Opera nable Secur e Gover Opportunity dable Affor Challenge Necessity e Servic m as a Peter Coffee Platfor Director, Platform Research salesforce.com Not just another year of “Do more with less”… Business imperatives kept moving in new directions… • Governance requirements • Threat environment • Competitive challenges …while on-premise IT offerings followed familiar trajectories 2001 2009 Most of the time, CIOs’ actual mandate has been to “do a lot more with just a little more…” …but not last year 1
  2. 2. IT had a very bad year Global IT spending estimated down 5.2% during 2009 Spending won’t return to 2008 level until 2012 Half of CIOs will see zero growth or further cuts this year – Gartner (informationweek.com, 26 Oct.) 2
  3. 3. What are the Obamanomics of SaaS? Forecast Hiring won’t turn up soon Month (2010) % seasonally 50% +/- 80% +/- (per Financial Forecast Ctr 12/20/09) adjusted Feb 10.2 0.2 0.5 Mar 10.2 0.3 0.6 Apr 10.2 0.3 0.6 May 10.2 0.3 0.7 Jun 10.2 0.3 0.7 Month Forecast 50% 80% U.S. GDP will stay flat (2010) ∆% year-on-year +/- +/- (per Financial Forecast Ctr 11/30/09) Feb -0.5 0.8 1.9 Mar -0.5 0.9 2.0 Apr +0.2 1.0 2.1 May +0.2 1.0 2.2 Pressure will persist to seek Jun +0.2 1.0 2.3 radical economies What are the Obamanomics of SaaS? Public-sector CIOs have the green light to pursue SaaS solutions – Vivek Kundra, administration CIO: Federal gov’t “has been building data center after data center…We cannot continue on this trajectory.” – In a joint effort between the IRS and the Department of Education, it has become possible with one click of a mouse button for IRS data to populate the [federal student aid application] form, Kundra said, eliminating more than 70 questions and 20 screens (Daniel Terdiman, cnet.com, 12/15/2009) Domino effect is under way – In October, the Los Angeles City Council unanimously approved the plan to switch from Novell GroupWise to Google Apps... More than 8,000 of the city's 30,000 employees have signed up [for pilot effort]… – Los Angeles Chief Technology Officer Randi Levin…has received 27 or 28 inquiries from California governments (Matt Williams, govtech.com, 11/17/2009) 3
  4. 4. What are the Obamanomics of SaaS? Conspicuous, quantified success stories and policy statements: – In a traditional IT procurement environment, it would have taken us about six months to upgrade USA.gov to better meet the needs of our citizens. However, in the cloud environment we are now able to do upgrades in one day – giving us greater agility and saving taxpayers approximately $1.7 million annually in computing infrastructure costs associated with USA.gov. David McClure GSA Associate Administrator Office of Citizen Services and Communications – We will...work with industry to ensure cloud-based solutions are secure and compliant thereby reducing duplication of security processes throughout government. Casey Coleman GSA CIO gsa.gov, 9/15/2009 U.S. Census Bureau Increasing Response Rates for the Decennial Census Deployed a custom app in three months Record, track and manage contacts and activities between census staff and external partners App will scale up as decennial census approaches Manages 2,200 users temporary workers geographically dispersed at headquarters and 12 regional offices 4
  5. 5. What are the Obamanomics of SaaS? Make your message part of the “Obamacare” story: – The February 2009 health industry cost saving initiatives proposed by President Obama directs the industry to rapidly transition…to an instantaneous electronic mechanism… The Company's MD@Hand technologies allow physicians to gain access and securely store electronic medical records… Instacare Corp. press release, 11/23/2009 Gain leverage from established cloud platforms: – Practice Fusion is launching its patient health record on Force.com, salesforce.com's enterprise cloud computing platform…. Practice Fusion press release, 8/5/2009 The approach…that has been charted by Practice Fusion, and is significantly enhanced by Salesforce.com’s expertise and resources, is a tremendously positive step... Elimination of barriers to EHR adoption, while at the same time ensuring security and privacy of protected health information, are all positive results of using the “cloud” approach. Robert Rowley, MD thehealthcareblog.com, 8/12/2009 Family Service Agency of San Francisco HIPAA-compliant EHR for mental health case management 50% reduction in time spent on paperwork, reporting and reimbursement Eliminated 2-month wait for County reports Real-time tracking of individual client outcomes (treatments adjusted accordingly) Client Intake Self-audits and tracking of clinician, program, and Case Management division productivity Service Plans Client Outcomes Automated reimbursement process though auto- Self-audits population of funder forms “ our client programshave visibility into set and track of For the first time we and the ability to the effectiveness metric-based benchmarks for client progress. ” Bob Bennett CEO 5
  6. 6. Look for the upside; be on the right side A compliance economy needs compliance tools An economy of higher energy costs needs energy management tools An economy with inflationary expectations needs retirement tools An economy shedding “permanent” jobs needs free- lancing tools All of these are rapidly evolving opportunities that benefit from rapid deployment of new SaaS solutions The IT budget wasn’t the only shrinkage Dear CIO: Thinking about retirement? (Average CIO tenure = 4.4 years) Let’s play a little game called “Rebuilding your 401K”… …and then let’s play it again Not only no capital or headcount budget; also no interest in disruptive risk 6
  7. 7. Selling to CIOs: they know it’s not just “keeping the lights on” 65% of CIOs report that generating business innovation is how their success is measured (N.B. – not technology magic tricks)… …up from 56% the year before (techExec Society, State of the CIO) When I used the word “innovative” as one of three key “CEO needs,” our CIO roundtable attendees corrected me es andat The new word on that graphic is “operational” eeds CIO M tive CEO N Produc le ional Reliab Operat e nable Secur Gover “Strong CIOs don’t innovate. They figure out Affor dable ways to make money for the business. They rvice cut waste and plow those savings into projects m as a Se Platfor that create value.” (techExec) What do CIOs not want? Questions about security: perception of security risk is #1 concern about cloud computing in nearly every survey – OK, so ~80% of people believe that the cloud is inherently insecure – 80% of Americans also believe the government is hiding its knowledge of alien visitors to Earth – Fears are refuted by facts • ISO 27001 • SAS 70 Type II • SysTrust – Fact: Silicon Valley VCs say that IPOs are made easier when startups use cloud services to address their SarbOx requirements 7
  8. 8. Cloud security: no need for excuses Facility Security Network Security Platform Security • 24x365 on site security • Fault tolerant external firewall • SSL data encryption • Biometric readers, man traps • Intrusion detection systems • Optional strict password policies • Anonymous exterior • Best practices secure systems mgmt • SAS 70 Type II & SysTrust Certification • Silent alarm • 3rd party vulnerability assessments • Security certifications from Fortune 50 • CCTV financial services customers • Motion detection • May 2008: ISO 27001 Certification • N+1 infrastructure “There are some strong technical security arguments in favor of Cloud Computing… (Craig Balding, Fortune 500 security practitioner) Cloud security: all the way down Apply Data Login… Authenticate… Security Rules… View Filtered Content Password security policies Rich Sharing Rules User Profiles SSO/2-factor solutions 8
  9. 9. What do CIOs want? Credible customer stories – In their industry • Relevant to their needs • Threatening them with competitor advantage – In their region • Addressing issues of governance, compliance, and skills Negligible downside, guaranteed upside – For example: salesforce.com initiatives include… • Developer Account is free – Tools and references are free – On-line training is free • Force.com Free Edition triggers viral growth – Show people that status quo is the high-risk strategy – Get people to stop saying “can’t” and start saying “how?” • Certified Developers and Admins are waiting for your call Real-world results: financial services The Phoenix Companies sought a new CRM solution with flexibility, ease of use, mobile accessibility, low-cost modification capabilities, minimal user training requirements, and simplified integration with other apps. Changeover to Salesforce CRM took less than two months. Working with salesforce.com partner OKERE (now part of Fujitsu Consulting), Phoenix used the Force.com platform to create customizations for contracts and underwriting. Using the Force.com API, Phoenix integrated several legacy systems with Salesforce CRM to provide consolidated, real-time access to information. The Salesforce CRM implementation cost the company less than one-fourth of the project’s original budget. By streamlining communication between field and inside sales within Salesforce CRM, Phoenix has reduced phone and email inefficiencies, boosted productivity, and, in 2005, increased life insurance sales by more than 33%. Following its upgrade to Salesforce CRM Unlimited Edition, Phoenix achieved 96% user adoption. 9
  10. 10. Development reinvented, not just relocated Nucleus Research analyzed Force.com deployments: found average 4.9 times faster development (range 1.5x-10x) versus Java or .Net – Custom objects – Administrative tools – Workflow engine – Pre-tested platform Galorath Inc. compared developers’ Force.com productivity to Java development – Requirements definition time reduced 25% due to rapid prototyping – Testing effort reduced by (typically) more than 10% – Development productivity of new code 5x greater – Overall project cost 30-40% less CustomerSat sampled more than 1,100 Force.com development teams during summer 2009 – Average experience: 4 applications deployed to date – Average project cost savings: 48% – Average project acceleration: 5.1x Real-world results: health care CRC Health—the nation's largest provider of drug and alcohol treatment services—acquired the country’s largest youth treatment provider. The combined organization required a platform to manage patient intake, track Web entities, and streamline operations to increase revenue. The company used ACT!, spreadsheets, and other proprietary systems to manage extensive patient data. Only one call center operator could open the spreadsheet at a time, making the process inefficient, opaque, and unscalable. The company developed a customized user interface on Force.com for 12 users. With help from salesforce.com partner Appirio, CRC Health extended the application to broadly leverage the platform. Security levels are matched to what’s required to comply with HIPAA and other industry regulations. Open APIs enable tight integration with legacy tracking systems, Microsoft Outlook, eFax, and other third party apps. Web marketing effectiveness tracking within Salesforce CRM indicates to the dollar what is performing and what is not. 10
  11. 11. What do CIOs want? Bottom line: assurance that this is ready for prime time – Real companies are building real solutions – Stop fearing the myth-perception of the proprietary cloud • There is one cloud: a global, public network using standard protocols • In part of that cloud, buy computing in bulk from Amazon • In part of that cloud, buy collaboration tools from Google • In part of that cloud, – Find the world’s most effective and most user-approved CRM portfolio… …and build better applications in less time with Force.com Trust through openness Full Public Disclosure Live System Status Security Best Practices Historical Performance May-July 2009 • 99.997% of planned availability • Continually narrower Amazon maintenance windows Google 11
  12. 12. Trust through openness What it means to promise “The Cloud” Moving toward an ideal: “Zero, One, Infinity”* 0 On-premise infrastructure Acquisition cost Adoption cost Support cost 1 Coherent and resilient environment – not a brittle “software stack” ∞ Scalability in response to changing need Integratability/Interoperability with legacy assets and other services Customizability/Programmability from data, through logic, up into the user interface without compromising robust multi-tenancy * From The Jargon File: “Allow none of foo, exactly one of foo, or any number of foo” 12
  13. 13. This isn’t the bleeding edge 40% of IT execs have been using cloud computing for more than three years – 62% of surveyed firms plan to increase their use of SaaS this year – 60% project SaaS in vertical apps within two years By 2011, more than 70% of U.S. enterprise data centers will hit the wall on power, cooling and space: – More than 1/3 of companies expect IT investment reductions in 2009 – Outsource data-center demand is up 14% in the last 12 months; capacity has grown by only 6% – Data center costs have doubled in many markets; in London, they're up sixfold 37% of firms are replacing current on-premise systems with SaaS This is the leading edge Nothing is perfect… …but some things are improving more quickly than others If “the cloud can’t do that” today, what about next year? Can today’s mature traditional models say the same? 13
  14. 14. This is the leading edge Nothing is perfect… …but some things are improving more quickly than others If “the cloud can’t do that” today, what about next year? Can today’s mature traditional models say the same? This is the leading edge Nothing is perfect… …but some things are improving more quickly than others If “the cloud can’t do that” today, what about next year? Can today’s mature traditional models say the same? 14
  15. 15. To everything there is a season ’50s ’60s ’70s ’80s ’90s ’00s Windows IBM PC Windows XP PC MITS Altair 3.x/9x/NT Macintosh & Mac OS X & Linux 1.0 DEC DEC Sun Sun/AMD Sun/ILM Mini Workstations x86 Servers PDP-8 VAX 11/780 Render Farms & Servers Niagara CPUs Mainframe IBM 701 S/360 S/370 4300 S/390 zSeries ’50s ’60s ’70s ’80s ’90s ’00s Cloud Apps Grid & X Window Computing Platforms e nc a nd ce As Windows IBM PC Windows XP PC MITS Altair 3.x/9x/NT Macintosh & Mac OS X & Linux 1.0 e nc ge er Em DEC DEC Sun Sun/ILM Sun/AMD Mini Workstations x86 Servers PDP-8 VAX 11/780 Render Farms & Servers Niagara CPUs t… e nc en ra em ea p in Ap f Re Mainframe IBM 701 S/360 S/370 4300 S/390 zSeries 15
  16. 16. s andate CIO M ctive eed s Produ CEO N le Thank you tional Reliab Opera e nable Secur pcoffee@salesforce.com Gover dable Affor e Servic m as a Platfor More information at www.salesforce.com/cloudcomputing 16