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Cloud computing has given business a new way to improve the effectiveness of business processes and ultimately the outcomes of their efforts. In the last five years, business across marketing, customer service, sales, human resources, finance and other areas have embraced the practice of renting access to the applications and technology they need when they need them. Organizations’ use of operational expense budgets helps them get what they need and avoid IT politics or standards that impeded their agility.

The cloud computing trend that I outlined earlier this year has vr_bti_br_access_preferences_for_innovative_technologiesescaped recognition by traditional IT press and analysts that do not research or assess business, which is just beginning to understand that business does not do just what IT tells it to do. This is especially important because people on the business side are held accountable for the results of their operations and should have a larger voice about what they use to improve their business processes. Over the last year I have seen IT getting more involved in understanding business needs as it looks to add value to business and also to interconnect cloud computing deployments into the enterprise.

Our latest research into technology innovations for business found a significant shift toward the use of on-demand and cloud computing approaches. Business and social collaboration technology had the highest preference for cloud computing at 41 percent, followed by mobile (37%) and social media (35%). Less critical was big data (26%) and analytics (25%), but finding that one out of four respondents prefer cloud computing is significant considering that no more than five years ago the preferred approach was to have IT buy and install all technology. Times have changed, and business is now using what it needs to be more productive and drive the most effective results.

Cloud computing has improved the availability of applications and information, according to a third of organizations (34%), with executives realizing this more predominately (46%). Furthering those efforts is why business continues to lead in the adoption of cloud computing. Those that use it see the largest benefits of the cloud as lowered costs (40%) and improved efficiency of business processes (39%).

vr_bti_br_whats_important_in_choosing_technologyAs business gains the confidence and skills to evaluate applications and tools, we are also seeing a dramatic shift in the factors it uses to evaluate technology. Usability (64%) is significantly more important than validation of a vendor (23%), for example. Having applications that meet the needs of the people who use them is more critical than satisfying IT, which will never use the applications. IT may try to simplify and force business to use applications and technologies from large technology vendors where they get the best deal, but business is more concerned about the use and effectiveness of technology. We are also seeing the smaller vendors earning just as much if not more opportunity to gain credibility with businesses looking to rent and use applications.

One of the challenges in using cloud computing is integration of data from the applications in the cloud with that of on-premises applications, which is very important to 44 percent of organizations.vr_ngbi_br_bi_deployment_preferences As business continues to adopt more cloud applications, they need to synchronize or access more data for a range of business process and analytics needs. Our recent research into next-generation business intelligence found a growing shift to on-demand and cloud computing approaches for business intelligence across mobile, collaboration and even broader enterprise use in a quarter of organizations. We found an openness to supplier-hosted or private cloud computing, along with many organizations that have no preference as to deployment approach. We found business focusing on getting the value of its investment in the most efficient manner, or what we call time-to-value (TTV), and if cloud computing helps in that goal, then it will be adopted.

You should consider how your business can exploit cloud computing, especially in places where you are running older applications or tools that need to be replaced, or where you need new innovations in efficiency or methods to engage customers and promote growth. The largest barrier we found to taking advantage of technology is lack of resources (51%); cloud computing can take fewer IT resources to evaluate, onboard, configure and deploy, and such systems can be managed by people in business departments or divisions. While cloud computing comes out of the general IT budget in more than half of organizations, our research finds that the business budget (35%), line-of-business technology budget (28%) and shared service funded by business (24%) are also major places for investment.

Cloud computing is less of a benefit of any one vendor’s products but rather an approach that can give business a competitive advantage. Businesses should evaluate cloud-based solutions whenever they evaluate new investments. As your organization examines business applications and discusses how to accelerate your time to value, consider how cloud computing can become a critical path to meeting your business and IT needs.

Regards,

Mark Smith

CEO & Chief Research Officer

Salesforce.com made a surprising announcement of its agreement to acquire Rypple, a software company that defines its product as a social goals application. I call this a surprise because although Salesforce has been extending its reach beyond sales and customer service to IT in providing a platform, tools and a database for building applications and storing data in the cloud, until now it has not entered directly into other lines of business. After its annual Dreamforce conference last summer, I analyzed the company’s strategy and products. Now I want to consider what this acquisition means for Salesforce and the human capital management market.

Rypple provides a new type of application that operates within the confines of cloud computing that enables managers and team members to collaborate in accomplishing specific objectives in an interactive manner. Perhaps Rypple’s largest challenge has been waiting for potential customers to catch up to this innovation and be willing to try a new approach to coaching team members. Unlike traditional HR and talent management applications, Rypple addresses goals and objectives, coaching and feedback, and performance reviews in a social environment.

I decided to check out the application for myself and ensure my analysis is as accurate as possible, which I think its uniqueness makes necessary to understand what Salesforce.com has acquired. Rypple focuses on three key activities: coaching toward defined objectives, recognition of work accomplished and feedback on the performance of the individual who has done it. The application runs in the cloud, which no doubt pleases Salesforce. It took me just minutes to set up in its cloud computing environment with the application and engage members of my team with it, even accessing it with its native application on the Apple iPhone. Rypple provides a comfortable user experience and intuitive methods for people to work toward common goals and socialize the focus.

Rypple has been active in getting testimonials from its customers, which include Facebook, Spotify, Rackspace, Kobo, Jive Software and other newer companies mostly in the Internet technology sector. Rypple had a simple pricing plan that offers some basics for free and charges $5 to $9 per month for more functionality for goals and reviews, coaching and feedback along with enterprise-level integration and support. Rypple also provides integration with Google, iPhone, Jive and Pivotal Tracker, which demonstrates its ease of access from other environments.

Now the question is what Salesforce.com plans to do with Rypple. It will create a new business unit and rename the produce Successforce and is likely to integrate this with Chatter as part of an effort to make that an enterprise backbone for social collaboration. This layering of applications complements Salesforce’s strategy for Chatter as it has done with its Service Cloud. In the short term I doubt that Salesforce will jump into the larger market for talent management and try to sell Rypple to human resources departments; this requires focused investments into this line of business, which it has not been doing as much as it has with IT. So the impact of the acquisition on the human capital management software market is  not clear. Salesforce  will also need to address the future of its partnership with Jobscience which applies aspects of CRM to administer and support HR and human capital management and has been providing them some significant proof points of its efforts.

Salesforce’s customers in sales and customer service should be eager to examine this application as should those looking to build upon its use of Force.com in the enterprise. Rypple also could help Salesforce gain an edge on Oracle’s Fusion for HCM that I assessed and its recently announced Oracle Social Network that lacks the vision and demonstration as this announcement. This move puts Salesforce.com more in line with the direction of what Saba and SuccessFactors (which is being acquired by SAP) are doing to advance social collaboration into human capital management. At the moment it is not clear if Salesforce will continue to support the existing stand-alone offering and pricing of Rypple, let alone the free version, so users should be cautious until the deal is final and Salesforce communicates the new direction. In any case this is an interesting move as Salesforce continues to surprise the market with its progressive applications of social collaboration for enterprise lines of business.

Regards,

Mark Smith – CEO & Chief Research Officer

 

Mark Smith – Twitter

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