What Social Business means for Cloud Computing

Anthony Nemelka is a long-time veteran of the CRM industry, having previously served as a senior executive at both Peoplesoft and Epiphany and most recently co-founder and CEO at Helpstream.

At a well-attended Salesforce.com event at Oracle Open World two weeks ago, Marc Benioff delivered, in his typical style, a very well articulated argument for why Salesforce is poised to dominate the shift from client/server computing to cloud computing in the same way that Oracle dominated the shift from mainframe computing to client server.  It was a strong argument, graciously delivered given it was on Oracle’s stage. Shortly thereafter, Michael Dell joined Mr. Benioff and threw his support behind the shift to cloud computing, saying this shift is one of the reasons why Dell recently purchased Perot systems.

While many folks continue to debate whether or not cloud computing represents a migration or a transformation, those who have the most to gain or lose seem to be voting with their wallets. For the time being, Larry Ellison seems to be having fun poking holes in the cloud computing argument, but I don’t think it’s an accident that he allowed Mr. Benioff’s message to be delivered on his stage. This is one major trend he wants to stay very close to, with good reason.

As Mr. Benioff and Mr. Ellison were busy making their cases for and against the merits of cloud computing, a less evolved but equally important debate continued to simmer about the transformational impact of social business software (SBS).  At Oracle Open World, this debate was focused around CRM, the social business incarnation of which is popularly referred to as Social CRM (SCRM).

Sounding very similar to the arguments questioning the transformational impact of cloud computing, a good many incumbents in the CRM space continue to assert that, from a systems point of view, SCRM enablement requires no more than an add-on feature set to existing CRM systems. Add some collaboration and community features, sprinkle in social media support, add integrated alerts from Twitter and Facebook, and you’re all set.

The contrary view, outlined in one of my previous posts and further illustrated in an insightful post by Phil Wainewright, is that securing the competitive advantages associated with socially-enabling your business requires some serious re-thinking and re-design of your business strategies, policies, procedures, and processes. Unless you plan to drive similar projects across your entire business, a social-enablement project performed in one part of your business will chafe against the old ways of doing business in another. Social-enablement projects deployed in a single-process silo will likely fall far short of expected benefits. Because of this, the folks in the social business transformation camp argue that SCRM is best viewed as a critical component of a comprehensive social business enablement strategy, not simply an extension of existing CRM systems and processes.

Whether it’s cloud computing or socially-enabled business, there is a lot to be gained or lost by how these trends evolve in the marketplace.

It strikes me, though, that cloud computing and social business enablement are more closely linked than most people realize. The success of one will likely increase the likelihood of success of the other in the same way that the success of packaged enterprise software fueled the success of client/server computing two decades ago. This time around, it’s the “webification” of business that’s driving the shift, with social business enablement looming large as the next major incarnation of this phenomenon.

From an enterprise application software point of view, nothing is hotter than social business software. I’m constantly hearing great ideas for using social media, social collaboration, crowdsourcing, communities, and myriad other approaches for leveraging the Web to improve the efficiency and effectiveness of enterprises. If you’re a high tech entrepreneur, choosing the cloud computing platform for delivering your innovation is a no brainer. Why? For the same reasons entrepreneurs chose client/server computing two decades ago. The APIs are more flexible and forward looking, the development tools are easier to use, it’s the best way to differentiate from entrenched competitors, it’s a lot cheaper for customers, it’s the *only* platform for new products and services that investors will fund, and, probably most importantly, you can do a lot of “cool” things that are impossible to do with the old platform.

During the last big transition, I was working at IBM selling mainframe systems. Sometimes you learn a lot from your mistakes. I certainly did. It’s interesting to see that this time around Microsoft has become IBM, Google has become Microsoft, Salesforce has become Oracle, and Oracle continues to stay perched atop the high point of the technology adoption curve–ready to acquire its way into the most profitable phase of any major technology trend.

So what did I learn at Oracle Open World this year? I learned who will still be around a hundred years from now. And I learned a lot more about how the Web continues to change *everything*.  Social business and cloud computing are here to stay.

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