What is Happening?  Hewlett Packard has been on a very bumpy road to market position recovery, and is quite rightly emphasizing Cloud IT as the primary vehicle for that journey. But its latest major announcement has Saugatuck concerned that the company may be traveling in a direction likely to be unsafe, or at least extremely challenging, on that very bumpy road.

HP made a series of announcements and updates regarding its overall Cloud IT positioning and portfolio this week at its annual Discover user event in Las Vegas. These included several updates for its HP Cloud IaaS and associated HP software-defined network (SDN) offerings, including the ability to use corporate VPNs to link private clouds and the HP Cloud.

Progress Software, long known and respected for software solutions development, has rolled out  a new PaaS capability based on their recent acquisition of Rollbase, Inc., a privately held independent software vendor based in Saratoga, CA. Progress® Pacific™ will facilitate Cloud and mobile applications development with integrated access to data from disparate SaaS, relational database, Big Data, social, CRM and ERP systems.

One highly attractive feature of Progress® Pacific™ is its agnostic stance regarding source and target platforms and offers ISVs and other Cloud developers wide choice of data sources, deployment environments and business logic tools. Progress Software will release Progress® Pacific™ in the third quarter and touts the following key advantages:

What is Happening?  This week, Cloud CRM and platform provider Salesforce announced its intended acquisition of marketing data integration services provider ExactTarget, in a $2.5 billion deal that includes buying outstanding publicly-traded ExactTarget shares for $33.75 each.

Like IBM’s acquisition this week of SoftLayer, Salesforce’s acquisition of ExactTarget builds on an existing business and technology portfolio, and also extends the vendor’s commitment beyond what it has been best known for, while expanding opportunities for growth into adjoining markets.

On Tuesday 4 June, IBM and SoftLayer (a vendor of Cloud infrastructure offerings) announced a definitive agreement under which IBM will acquire SoftLayer. In the consequent conference call for industry analysts, IBM stated its intention to merge SoftLayer into Global Technology Services (the part of IBM that delivers SmartCloud and traditional hosting offerings) while maintaining the SoftLayer brand for the foreseeable future. It also announced the creation of a new Cloud Services division within Global Technology Services. IBM declared plans to begin migrating their own Cloud Platforms, Business Software, and Business Solutions to host on the newly enhanced SmartCloud as soon as the acquisition officially closes.

Saugatuck views these announcements as positive steps for IBM toward enhancing and managing its  SmartCloud offerings – and to give it better positioning and leverage for increasing its overall Cloud services market share. Here are the basics that we’re sharing with clients:

A major wave of transition to the Cloud is currently underway, the benefits of offering Cloud solutions having been validated over the past few years. The first wave of ISV Cloud transitions was uneven in results with some notorious failures and other expensive lessons learned, partly due to the immaturity of platform offerings, partly due to a general lack of appreciation for the complexity of the transition from a business point of view. Today’s Cloud platforms are far superior in enabling ISV Cloud transitions and their ongoing operations. Nevertheless, those significant business challenges do remain for pure play startups as well as established on-premises ISVs transitioning, primarily in these seven areas:

• Executive/Financial (See 1192STR, Overcoming Cloud Transition Challenges: Executive / Financial Best Practices, 19Mar2013)
• Technology (See 1224STR, Overcoming Cloud Transition Challenges-Technology Best Practices, 4Jun2013
• Operations
• Sales and Marketing
• Partnering and Alliances
• Organization
• Culture

Meanwhile, the Boundary-free Enterprise™ and its enabling master architecture have introduced additional capability and complexity and synergy – Collaboration, Social, Mobile, Analytics – as well as integration between Cloud and on-premises data assets. In this series of Strategic Perspectives, we consider not only the challenges of the initial ISV transition to the Cloud, but also the additional challenges that await Cloud ISVs as the terms of competition in the Cloud continue to evolve.