As many Spend Matters readers know, I tend to think of the cloud as more of technology and infrastructure delivery (e.g., the Amazon cloud) than a fundamentally new way of software, content or service delivery. Yet some people share a different perspective and definition. ZDNet recently featured the recording of a podcast from Ariba LIVE, highlighting different perspectives on the cloud from Mickey North Rizza (AMR), Chris Sawchuck (Hackett), Robert Mahowald (IDC) and Bruce Guptill (Saugatuck). Perhaps one of the more informative points in the discussion came from AMR's own cloud research (based upon a more technical definition of the cloud, it would appear).
Mickey suggests that AMR "found that 96 percent of those in our studies are using cloud-based solutions, but out of that 96 percent, 46 percent are geared into a hybrid cloud solution. And by hybrid we mean that they're actually using cloud technology applications. They're optimizing those against their IT on-premise investments, and further, they're extending the capabilities into cloud services technology. So they're looking at the whole gamut."
Mickey also adds a key point about the cloud -- it lowers the cost to serve. This is a key point within Ariba's strategy that I think many overlook. Shared and virtual infrastructure can lower the cost to serve for Ariba suppliers, especially smaller suppliers, while also lowering Ariba's cost-to-serve as well. Hackett's Chris Sawchuck -- who, I might add, stole the show during this panel with an extremely informative talk -- also points out a couple of benefits of the cloud in the context of Ariba. To wit, "It certainly brings much more visibility to the overall activities that are occurring across the entire source-to-settle process. But also, once you are connected in this whole cloud environment, it certainly gives you access to intelligent services that exist out there. I'm talking about working capital, things like information about the financial health of your suppliers, their historical performance, the cost of capital, etc."
I think that both Mickey and Chris are on to something here. But I think it is important to remember that it is the technical capabilities and characteristics -- rather than the solutions themselves -- delivered via cloud approaches that make this possible. For me, the cloud still remains a technical term versus a solution one (when it is used in the latter circumstance, I think it clouds the true definition). Stay tuned for further exploration of some of the commentary from this panel discussion.