SAP Needs To Acquire SaaS Portfolio

SAP, one of the largest companies in the enterprise resource planning (ERP) market, recently reported strong results – its eighth straight quarter of double-digit growth – while its rival Oracle recently reported disappointing results. In December SAP announced plans to acquire SaaS talent management vendor SuccessFactors for $3.4 billion. After Oracle’s $1.5 billion acquisition of SaaS vendor RightNow, SAP seems to be getting serious about its cloud strategy. Let’s take a closer look.

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Thought Leaders in Cloud Computing: Steve Garrou, VP of Global Solutions Management, Savvis (Part 6)

Sramana Mitra: As far as your own infrastructure is concerned, you’re heavily into this hosting and colocation business. What is going on on the side of the hardware vendors or the infrastructure vendors, so to speak, that you buy from? What are they providing for you? Is this a topic that you can discuss at all?

Steve Garrou: I can discuss the commercial models we have with our hardware partners. Technical specs, not so much. >>>

Thought Leaders in Cloud Computing: Steve Garrou, VP of Global Solutions Management, Savvis (Part 5)

Sramana Mitra: Interesting. That still doesn’t solve the issue of these rogue applications being brought into the enterprise. Is there anything on your radar that’s trying to address that issue?

Steve Garrou: Of rogue applications being used within the enterprise?

SM: Yes. For example, there are thousands of SaaS applications today. Say somebody decides, OK, I’m going to use a social media analytics tool from XYZ, a little company that has not been validated by purchasing or anything. I just want to use it. The dangerous thing is right now, there is a lot of data that flows through these applications that could be critical data. >>>

Thought Leaders in Cloud Computing: Steve Garrou, VP of Global Solutions Management, Savvis (Part 4)

Sramana Mitra: If you were an entrepreneur designing a solution, how would design it?

Steve Garrou: I definitely want to pick up on your point on Salesforce and the like. I think you’re right. The groundswell, and the quickest route to market, is definitely focusing on the business unit or a specific problem within a company and solving that problem. That is the quickest way. I wonder if an entrepreneur isn’t wildly successful like Salesforce.com is, it may be difficult to scale. There are opportunities to bridge the gap; if there’s a way to bridge the gap between the IT organization and the line of business with a solution, I would focus there. I think IT organizations are ripe for that type of solution, whether it’s on the software side, on the infrastructure side, or the data side. I think they’re looking for ways to be proactive and meet those needs. But finding an application or service that meets the line of business need and at the same time be able to link it back into the corporate mothership is an ideal place to focus. >>>

Thought Leaders in Cloud Computing: Steve Garrou, VP of Global Solutions Management, Savvis (Part 3)

Sramana Mitra: Let me pick up on a few things you said and drill down on those. You were talking about “back to the future” as in we went to this client–server model, a more distributed model, and now we’re going back to a centralized, hosted solution that is accessed by [thin] clients, and in some cases, rich clients, all over the world.

Steve Garrou: Yes, that’s definitely part of it, the technology of “back to the future.” And we see the pendulum swinging back and forth from client server to thin client and then back to distributed [and] decentralized. We actually see that. >>>

Thought Leaders in Cloud Computing: Steve Garrou, VP of Global Solutions Management, Savvis (Part 2)

Sramana Mitra: What are the major trends you see in cloud computing today that are affecting your world?

Steve Garrou: We’re finding that cloud is driving a lot of strategic conversations, almost as much as the technical ones. What we’re seeing with our clients – I mentioned I was in Asia – this is in Singapore, with a client that is looking at going completely toward cloud or as-a-service delivered capabilities for their infrastructure. There were a number of points in what they told us. First is this notion of consumer IT so that end users, much like those of us on the phone, are interested in taking advantage of the types of data and applications we get on our mobile phones and tablets and being able to use those devices, that data, and those types of applications inside the enterprises, not just in their personal lives. We see that driving a lot of these types of decisions. >>>

Dropbox IPO Also Coming Soon?

According to a recent IDC report, Worldwide Enterprise Storage for Public and Private Cloud 2011-2015 Forecast: Enabling Public Cloud Service Providers and Private Clouds, cloud computing will drive IT spending over the next five years. Overall spending by public cloud service providers on storage hardware, software, and professional services is projected to grow annually at 23.6% from 2010-2015. During the same period, enterprise spending on storage for the private cloud is projected to grow at CAGR of 28.9%. Together, both the public and private cloud storage segments are expected to account for $22.6 billion in spending worldwide. But it is not only the enterprises that use cloud storage services. Many individuals and smaller groups are also reaping the benefits of being able to store data on the cloud.

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Thought Leaders in Cloud Computing: Steve Garrou, VP of Global Solutions Management, Savvis (Part 1)

Since making its initial public offering in February 2000, Savvis has experienced significant growth, not only organically but also through acquisition. When the company decided to expand its operations in 2005 from network services to global IT services, a name change went along with it, and Savvis Communications became Savvis, Inc. In 2007 and 2008, the company opened offices in Singapore and London, respectively. In 2011, Savvis, Inc. and CenturyLink merged to create one of the leading global managed hosting and colocation providers.

SramanaMitra: Hi, Steve. Let’s set a bit of context both about your personal background and about Savvis. >>>