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Thought Leaders in Cloud Computing: Ken Stephens, Senior Vice-President of Cloud Services, Xerox (Part 4)

Posted on Thursday, Feb 23rd 2012

Sramana Mitra: That’s where I think has been extremely successful.

Ken Stephens: Yes, but do you think is going to become a major player at the platform?

SM: Yes, I do.

KS: Do you? I hesitate on that. The Salesforce application is great, but in terms of the platform for others to develop on . . .  I know they’ve been somewhat successful, but I would not say they’re taking the industry by storm.

SM: But the whole platform as a service market has not taken the industry by storm.

KS: That’s true. But Greenplum’s out there.

SM: How big is Greenplum right now?

KS: I don’t know the answer to that.

SM: I’ll give you examples of why I think has done has some power. I spoke with a company – probably three, four years ago – a little company that was just starting out in the contract management software space. It was just starting out, and the principals of the company, the entrepreneurs, had a lot of deep domain knowledge in the contract management software space. But they did  a venture-funded startup, before this new company, called Apptus. In the previous company, they raised a huge amount of venture capital, and eventually the company didn’t work. If you have to give a return on investment on that much capital, especially when the market was rather slow – the IT market was very slow in the early to mid-2000s – that venture-funded company didn’t really work out. But Apptus built the same kind of capability but on top of Then they used’s App Exchange to market their solution. These guys are going gangbusters.

The reason that’s an interesting case study is because they could not have done what they were able to do without the framework. So, if you are trying to bring a new application to market today as an entrepreneur, and you go on top of’s or Azure’s or anybody else’s platform as a service backbone and use their ecosystem to market yourself, that is a powerful model.

KS: I agree, but there are examples of companies that have done the same thing on Google’s Apps engine as well as on Azure.

SM: That’s what I’m saying. It’s basically one of the platform as a service vendors that’s going to get your business if that’s the direction you want to go. Mostly, it’s not capital efficient to reinvent the wheel on the entire cloud stack. You want to ride on somebody’s platform and save the cost of that.

KS: That’s why I say that’s where the war’s going to be fought. Whoever wins in the platform space is going to get the apps developers. And whoever gets the apps developers is going to get a big chunk of the business.

SM: The entire downstream value chain is going to be going the same way in that the apps developers will be acquired by one company or another, and the scaling will happen within that company. I think where we are today is at the beginning of the platform as a service phenomenon.

KS: I agree. That’s the market that I’m watching closely because in the end – and I tend to lean toward Microsoft’s Azure, but they have a real issue there – that market is still very new and could go in a number of different ways.

SM: Yes, I think Azure can, as long as it’s not in the legacy accounts, as a basis for building new applications, I don’t see a problem with Azure as a platform as a service option.

KS: Agreed.

SM: I don’t think Microsoft has any conflict with its legacy customer base when it comes to developing applications on Azure. I do think Microsoft is going to get a large portion of that business.

KS: I don’t think it’s for new apps that I’m referring to, but the legacy apps that they’re going to want to port over. That’s where they have to look and ask if they want to port it to Azure or if they want to port over to a Google Apps engine? I think they’re all going to move to Azure.

SM: OK. I see where you’re going. You’re talking about the legacy apps that are sitting inside of enterprises and being forwarded over from legacy platforms to the cloud, basically, based on one of the platform as a service options. And you see that business going to Azure mostly?

KS: Yes. I’m not really a gambler, but if I were to bet, that’s where I would bet. But that’s not a sure thing.

This segment is part 4 in the series : Thought Leaders in Cloud Computing: Ken Stephens, Senior Vice-President of Cloud Services, Xerox
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