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Thought Leaders In Cloud Computing: Steven John, Strategic CIO Of Workday (Part 7)

Posted on Sunday, Aug 7th 2011

By Sramana Mitra and guest author Siddharth Garg

Sramana Mitra: All that being said, right now we are also doing a parallel series on outsourcing, and outsourcing as an industry is absolutely booming. The players, the vendors and the segment are all doing really well, and I think that will continue for a while. I think there are many regions that are not mature. In the same way that India developed on the wings of outsourcing, there would be other major development economic stories that will come out on the wings of outsourcing.  There will be a labor arbitrage equation that would still be operative for a long time.

Steven John: I agree with you! It is an s-curve. So I think that the outsourcing s-curve is peaking, but it still has some ways to go. The cloud curve is starting out and moving along, but at some point people will shift from the first s-curve to the second s-curve.

SM: Yes! So, that is where it becomes very interesting, and I think that is still some time away, and I think the cloud is probably still in the early adaptor, early majority stage of adoption, right?

SJ: Yes, and I agree with you but I don’t fear, I think that we may see an acceleration of this for several reasons. For example, a board of a startup company out of Boston started and has no IT organization, everything is in the cloud and the employees run on BYOT – bring your own technology.  So, the employees supply their own laptops, their own phones, their own iPads, and they just connect to the cloud.  I think that especially with Gen X or Gen Y coming up, the millennials, to go back to your entrepreneurial theme, they won’t create IT departments; there won’t be IT departments in the sense that they understand technology. They tap into the cloud and provide their own interface with the cloud options. Does that make sense?

SM: Yes.

SJ: And that would be the small companies, but again those small companies become big companies. I think we will see more rapid change in some industries than in others.

SM: Yes. Well, in small companies, especially in the technology startup world that you are referring to, cloud adoption is moving very fast and is very widespread because it is the first time in history that a small company can afford serious technology, right?

SJ: Yes.

SM: Even little things like an email management system, an opt-in email management system, are affordable today; they weren’t affordable a decade ago.

SJ: And isn’t that a great thing. I remember having a conversation with one of the founders of Commodore computers. He wanted me to help him start this company in Africa where we were going to bridge the digital divide, and I wasn’t convinced that the world was ready for it and we had the capability to make it happen. But I believe this is happening now, and it is not China bridging the digital divide, it is bridging the processing power divide where any individual around the world can now have this huge capability. One of your questions made me think about microloans and where the cloud can almost be a [facilitator for that]. I think about your questions on small and medium business and home offices. I think we can use the cloud for microloans where we could tap people into the cloud and help them to develop new capabilities and begin this entrepreneurial idea to help Third World economies advance.

SM: I think on that front the big opportunity I see is all of these technologies. Yesterday I was talking to a company called Marketo; you may know it and be using it. They provide lead nurturing technology, and this technology is in the cloud. The company is growing very well and in four years they already have a $30 million revenue run rate. The company charges a thousand dollars a month for an annual subscription per user. I would love to use Marketo for our One million by One Million initiative, but a thousand dollars a month is real money. I would hesitate to spend that money, but if some entrepreneurs look at that and architect the same system and bring it down to $10 a month or $20 a month, I would buy that solution.

SJ: Or if the Gates Foundation or the Ford Foundation or somebody decides to step that up, it could be very exciting; it is going to drive entrepreneurs or help economies.

SM: I think it will happen as part of the natural course of things. Do you know there is a company called Zoho? I don’t know if you have seen them, they have done this with CRM. They have come up with a very low-cost CRM, and they basically went to one tenth of the price point, and they are offering CRM and at that price. The way they do that is they have a large operation in Chennai with more than a thousand people, and they just have eight people in Silicon Valley. I think, especially given the kind of entrepreneurial energy that is bubbling in India and in other emerging markets, these kind of opportunities are really driving down the cost of technology are very interesting entrepreneurial opportunities.

SJ: I agree, and I think there are some things we haven’t even seen. Nobody would have expected that online advertising would have driven Google to where it is. I think we will see ideas emerge around the cloud that we haven’t seen yet that will change the math.

This segment is part 7 in the series : Thought Leaders In Cloud Computing: Steven John, Strategic CIO Of Workday
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