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The Cloud Year in Review – 2010

By January 5, 2011Article

Looking back at 2010, one can’t help but think that our industry has inflected…
What a year 2010 turned out to be for the technology industry! It doesn’t matter that we still don’t agree on just what cloud computing actually means, the fact remains we have accelerated at a blinding pace towards the industrialization of Information Technology and to the services and utility consumption model. The change is reverberating in every corner of the technology industry, impacting every layer of the technology stack, and disrupting everything from business models and channel relationships to established cultural norms.
The furious pace of innovation, colossal investments, and acquisitions sprees this year proves beyond any shadow of doubt that 2010 was the inflection point for the industry. Here is just a sampling of some proof points which took place and shaped the cloud market during 2010:

Acquisition Sprees:

  • CA spends $1 Billion in as many as six cloud-focused acquisitions including Cassatt, which makes software for operating data centers like cloud computing utilities; 3Tera, a platform for building and deploying cloud services; Oblicore, which offers service-level management applications; Nimsoft, which has a line of cloud application performance and monitoring tools; most recently 4Base Technologies, a cloud consulting and integration firm, and finally Arcot Systems Inc and authentication and fraud prevention company.
  • Salesforce buys Heroku for $212 Million, a hell of an exit for this small 2-year old startup with $13 million in funding. Salesforce is clearly making major moves to become a force to reckon with in the cloud platforms space. Etacts marked the fifth acquisition by Salesforce this year, others being Jigsaw, Sitemasher, Activa Live Chat.
  • IBM acquires CastIron systems, Dell acquires Boomi, Oracle acquires Sun, VMware acquires Springsource and a host of virtualization management tools from EMC, and the list goes on…


  • By joining hands, VMware and Salesforce have positioned themselves to compete directly with Microsoft Azure and to gain the mind-share of the Java-based enterprise development community, who until now, have been undecided about which direction to go with their PaaS platform choices.
    Based on our own research study “Leaders in the Cloud”, we believe that companies which have a strong hybrid model strategy will win in the cloud market. With seamless drag-and-drop Java application and deployment capabilities, VMForce makes it extremely easy and less expensive to integrate, upgrade and maintain such hybrid environments—a sure recipe for success in the enterprise cloud world.

Bidding Wars:

  • HP wins over Dell to acquire 3PAR for $2.35 billion

Microsoft bets the farm on cloud computing:

  • Microsoft CEO, Steve Ballmer, didn’t mince words when he is said that 28,000 people who work on software at Microsoft are working on cloud projects. Speaking at the University of Washington in Seattle earlier this year, he said cloud computing is a mainstream thing at Microsoft. We saw a slew of announcements this year including Azure finally going live followed by a flood of new features and enhancements towards the end of the year. We also saw the announcement of Office 365 and the move of the office products to the cloud.

Federal Government announces “Cloud-First” policy :

  • The federal government is adopting a “cloud-first” policy, marking the administration’s strongest statement yet in support of cloudcomputing as it looks to overhaul the way it buys information technology. Jeffrey Zients, the federal government’s first chief performance officer, announced in November that the Office of Management and Budget will now require federal agencies to default to cloud-based solutions “whenever a secure, reliable, cost-effective cloud option exists.” Federal CIO Kundra Vivek has vowed to reign in and streamline the government’s IT
    budget by at least by five percent a year through aggressive and pro-active actions such as cloud computing, virtualization and data center consolidation. And, as a result, enable agencies across the board to better streamline their own programs. Cloud computing is prominently featured in the fiscal year 2011 Budget document section on “Modernizing federal and national IT infrastructure to be efficient and effective” starting from page 323. Check it out at

SaaS products prove their scalability and enterprise readiness:

  • SuccessFactors closes the highest-scale enterprise IT deal with more than 2 million seats of its business-execution SaaS software.
    Salesforce is now up to 90,000 CRM customers, a majority of whom are now enterprise customers. We continue to see a stream of new on-demand products both from cloud upstarts as well as the incumbents. IBM, SAP, Microsoft, Oracle continue to announce new SaaS products as alternatives to their on-premise solutions.

SAP announces a rich suite of SaaS products for 2011 and beyond:

  • SAP is fast catching up with the on-demand world. They announced at the recent SAP influencer summit a slew of on-demand products that provide seamless integration with all SAP systems and easy integration with other heterogeneous systems with an open architectural approach. SAP announced during the summit that it will add a rich suite of products that address the pain points of large and small business. The SAP On Demand Suite includes the following:
    • Business By Design (ERP Suite)
    • Carbon Impact (sustainability analytics)
    • Sales On Demand
    • Sourcing On Demand
    • Business Intelligence On Demand
    • Streamworks (collaborative decision making)

We are today at the cusp of another major wave in the technology industry. It’s up to us to exploit this opportunity to create history. Like the big disruption from mainframes to client server and then to e-commerce, a moment like this comes but once in the economic history of the industry. It is time for a fundamental transformation, one in which what we can achieve is limitless if we think long term, think big and think global. It’s time to think outside the box, unshackle ourselves from the legacy mindsets, business models, and cultural norms.
Let’s make a fresh start in 2011. Let’s act and think in a different dimension than the past years. Let us make the right choices before someone else comes and grabs the opportunity. Are you ready for it?
Kamesh Pemmaraju heads cloud research at Sand Hill Group and helps companies—enterprises and technology vendors—accelerate their transition to the cloud. His “Leaders in the Cloud”
blog has been recognized in the top 50 bloggers on cloud computing and also in CloudTP’s best cloud computing blogs list. He welcomes your comments, opinions, and questions. Email Kamesh at and follow him on Twitter @kpemmaraju.

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