What is Happening?  This week, Saugatuck research executives found themselves participating in three, simultaneous industry events shaping the world of Cloud IT and business: SAP Sapphire in Orlando, ServiceNow's Knowledge12 conference in New Orleans and IBM's Cloud Innovation Forum in Chicago.

The net takeaway from all three events, including dozens of discussions with provider and customer leaders, is that the religious wars and mystery about what Cloud is all about is clearly gone. The critical questions for providers and user enterprises have shifted from “What is it” and “Why should we?” to “When should we?” to “How do we?”

In fact, Saugatuck sees the next two to three years filled with extremely intense efforts by providers and users to develop and refine best practices regarding Cloud solution and provider selection, from core IT (IaaS/PaaS/SaaS) to social, mobile and analytics; along with best practices for integration of all this into, within, and between enterprise business operations.

For providers and user enterprises alike, Cloud is no longer about “What,” “Why,” or “When.” Cloud now is about “How.” And that’s changing providers’ go-to-market, along with buyer/user requirements for IT and provider value.

Why is it Happening? There are two things to look at here. First, why do we take this position?

On one hand, we can clearly see all of the traditional Master Brand IT providers have moved their business strategies and models, fairly rapidly, from Cloud engagement to Cloud-enabled to Cloud-centric. Most (if not all) truly get it. As can be seen in some of our most recent Lens360 blog posts, however, few traditional Master Brands “get it” the way that SAP does, especially when it comes to going “all in” on Cloud. For SAP’s core business strategy to work, Cloud IT and business have to be at least as important and widely used as we think it will be. If buyers and users give up on Cloud, SAP loses and loses big.

Almost every traditional IT Master Brand has made similar types of strategic announcements over the past few years, including Microsoft’s Steve Ballmer “We’re all in” pronouncement that helped crystallize traditional IT provider Cloud positioning (“Microsoft “All-in” Memo Coalesces Cloud IT Reality for Master Brands”). But frankly, we have been deeply involved in the Cloud technology and business strategies of all traditional IT Master Brands for several years, and we have not previously seen one making the size and breadth of bet that SAP is making on Cloud – especially now as it begins to aggressively target its large-enterprise accounts, not just SMBs. As we note in our Lens360 blog posts this week: SAP’s future is not about some generic or me-too strategy with the word “Cloud” in it. SAP is more “all-in” on Cloud than any other legacy IT provider at this point; company leadership has bet the future on widespread, common, and de facto business use of Cloud in all aspects, from core systems of record to lite mobile interactions. If SAP is to succeed, Cloud must be the core business IT worldwide.

As a more broadly-positioned IT Master Brand, IBM has the resources and business units to profit from a more organized and coalesced Cloud strategy without the need to go “all in” to the same extent as SAP. The Cloud Innovation Forum in Chicago this week highlights how IBM is quickly, but methodically, integrating more Cloud into its several operating units over time, keeping pace with customer and partner demand and abilities. IBM’s pace may be different, but the importance of Cloud-driven technology and business change is felt just as much by IBM leadership as it is by SAP leadership – or for that matter, by Microsoft leadership. Different business models require different, but no less bold or critical, strategies and approaches.

Meanwhile, non-traditional providers such as ServiceNow continue to indicate just how much Cloud-based IT-as-a-service has altered enterprise buyer/user conceptions and expectations of IT, and therefore the value of Cloud to the enterprise, especially the increasing importance of what customers want and how they want to use it. And they see fewer and fewer reasons to keep IT within traditional IT boundaries (“Boundary-free Enterprise™: Empowered by the New Master Architecture”).

As noted in Mike West’s latest Saugatuck blog postcustomers have driven, and continue to drive, the expansion of the ServiceNow platform beyond the IT domain. ServiceNow has numerous examples of customers creating business solutions in shared services such as HR, Facilities and GRC, and also in line-of-business (LOB) functions such as insurance claims, services requests, scheduling, resource provisioning and other business functions. We see similar Cloud-based IT+process services from hundreds of Cloud-native providers as well as from practically all traditional IT providers, including the afore-mentioned SAP, IBM and Microsoft. Hundreds of providers with thousands of offerings being implemented and used by tens of thousands of customers indicate that we have certainly moved from the “What” and “Why” into the “How.”

For an extended version of this Research Alert, visit Sautaguck Technology.

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