In the technology world, it is literally a cloud burst. OK, OK, enough of cloud related puns. All I am trying to say is, the word cloud is everywhere. Praises have been sung about the quick time to get on the cloud (typically a few weeks, for the uninitiated), elastic nature of the cloud (grow as much you want, shrink when you need less) and pay-per-use model. Cloud is talked of as the ultimate solution an enterprise has been waiting for, but is it that? Is it really as elastic as it is proclaimed to be?
I have two examples to share here. First one is with Salesforce, the very first successful cloud CRM offering. While negotiating with them for the pay-per-use model, it becomes quickly clear that there is no pay-per-use model but more of a yearly per member fee model that is on offer. Theoretically if I want to hire sales people for a short time sales campaign, I do not want to buy yearly licenses. Salesforce does not offer me a solution. They do work out monthly cost with the customers but then simply multiply it by 12 and give you the quote for yearly fees! So the elastic part is really a year long stretch.
Second example is the TCS cloud that is announced today. Touted as ‘nano of IT’ it has a lock-in period of 3 years. They have mentioned that you can walk out at any time but while buying the service, you have to commit to it for 3 years. This means a signing fee for 3 years, I’m sure. So this is even a longer stretch of elasticity.
I’ve no experience with Ramco ERP cloud. They are saying they have 50 customers and are expecting 70 more to join. I’m presuming that they too are charging yearly fee, payable on monthly basis. Does anyone have more details?
Market forces are at play and consumers are wise. Drawing similarity with phone call charges, which are now charged as per seconds of talk time, I’m sure the consumers will move closer to what they need, sooner than later.
As of today, the cloud offering available to the consumers does not seem elastic to me.
Cutting edge 