Cloud Computing: Salesforce.com Barks, But Can It Bite Oracle from Behind?

There’s an old Persian saying that goes something like this: The dogs bark, but the caravan moves on.

Plenty of barking happened this week during an afternoon session at the Web 2.0 Summit in San Francisco, with Salesforce.com CEO Marc Benioff and a cadre of other next-generation business software execs from Google, VMware and Adobe. The recipients of the biting remarks: established enterprise players SAP, Microsoft and Oracle—especially Larry Ellison, Benioff’s former boss—and their suites of ERP, CRM, BI and supply chain applications.

Benioff tried to write an obituary for the traditional approach to on-premise enterprise software offered by the likes of Oracle and SAP. SaaS, he commented, couldn’t even be compared to “mature, dying models like Oracle and SAP, which [are] maybe already dead.”

Google Enterprise President Dave Girouard argued that “there’s an amazing disconnect between the innovation and user experiences delivered in the consumer world and the stagnant, unenlightened world of enterprise computing that puts the user experience far in the background and focuses on business process.”

One account of the snark-filled panel discussion likened Saleforce.com’s and Google’s efforts against incumbents SAP, Oracle and Microsoft (and its new Windows Azure product) to all-out war. “With such sniping, you might think there’s a war on,” noted InformationWeek’s Thomas Claburn. “Indeed, there is, for control of the cloud.”

The “War for the Cloud”? Yup. That’s where we’re at.

Here’s the thing, though: This combat for the cloud is being waged on one front right now: Marketing. Cloud computing has become an over-used, generic term that vendors use to describe everything from a simple Web app to a next-generation data center. Its irritable spread throughout the tech industry is already confusing and annoying potential customers and industry watchers alike. (You should see the range of laughable “cloud computing” vendor pitches I receive every day.) And if this trend continues, that will ultimately hamper adoption.

I’m not arguing against the relative merits of cloud computing, or SaaS or on-demand software, or whether organizations should or shouldn’t be using off-premise software. I know there are plenty of companies (especially in the SMB space) that are quite happy with their SaaS, on-demand or cloud computing applications and services. (We use several here at CIO.) And some larger enterprises are becoming cautious early adopters of cloud services.

However, there are many more that are still leery of what the cloud has to offer. That’s reality. And market obfuscation doesn’t help. Consider what IT leaders said in CIO’s recent cloud computing survey: 54 percent of our respondents say that cloud computing is an “evolving concept that will take years to mature.” What’s their number-one worry now? A whopping 59 percent of our survey respondents say vendors have not adequately addressed security concerns related to on-demand offerings.

On the SaaS front, a Forrester Research survey of North American and European software IT decision-makers found that just 16 percent of respondents said they were already using or currently piloting SaaS applications. Conversely, more than 80 percent were still on the sidelines—curious, for sure, but not yet completely sold or running SaaS apps right now. Recent Gartner research showed that SaaS vendors can’t reliably deliver a suite of integrated ERP solutions. There’s plenty more where that came from.

An adage in journalism is to “Follow the money” when one is trying to figure out a complex business problem. In this case, one has only to remember who inside today’s companies holds the checkbook and ultimately makes corporate software-purchasing decisions: In many cases, men in suits who definitely weren’t at the Web 2.0 conference this past week. And they still feel quite comfortable signing those big checks to SAP, Microsoft and Larry Ellison’s Oracle.

Woof.