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Wednesday, December 26, 2012

How the Cloud Changes Software Consulting

Moving to the cloud isn't just changing the way businesses work by adding more collaboration. It changes the consulting businesses that actually sell most of the software used by business.

In Wednesday's New York Times I have an article about efforts by Google and Microsoft to sell companies online document creation and collaboration services. Google has struggled for years at this, but now appears to be making headway. One benchmark of its success is that it has doubled the number of resellers it had from a year ago, to 6,000.

Potentially more interesting, for where the market, and the workplace itself, are going are companies that are betting their future strictly on the cloud. These companies, among them Appirio, and Cloud Sherpas, are selling different means of using software as much as they are cost savings.

“This is very diffe rent from using an on-premise piece of software,” said David Northington, the chief executive of Cloud Sherpas, which is based in Atlanta, Ga. His business, which also involves installing and customizing systems for Salesforce.com, is about “software to be developed and deployed quickly,” he said, “we can focus on user adoption and innovation.”

Software can be deployed and updated faster in cloud systems because of the central control. If you make changes to a calendar function, for example, or patch a potential security flaw, it can show up on everyone's machines the next time they log in.

You can also change the way that other programmers and consultants approach work. Appirio, based in New York, is attempting to build a crowdsourced method of writing custom business software applications. Called CloudSpokes , it involves companies submitting “challenges” in exchange for cash rewards. Programmers from aro und the world can compete to write the best software, possibly winning jobs as well as money.

“Companies pay for the top one or two submissions, but they get to look at multiple versions of the work,” said Narinder Singh, co-founder and chief strategy officer at Appirio. His company often gets a commission for managing the work, and can more easily spot talent around the globe. “You aren't paying for labor before you have a sense of the person's skills,” he said. The system also works for designers, he said. Much the way Cloud Sherpas sells Salesforce as well as Google, Appirio is increasingly selling more software from Workday, another cloud-based software company.

The new approaches to consulting underline how much collaboration figures in cloud technology. Google is gaining traction partly because its products have better features; even more important, traditional enterprises have come to accept cloud-based systems, and workers are used to communicatin g constantly, thanks in part to the habits of “sharing” information over Facebook and Twitter.

This is probably gratifying for Google, but it also means Microsoft won't just be competing with Google based on price, one of its toughest challenges. Collaborative features will start to matter more in winning deals.

To be sure, Google and Microsoft have attracted a few notable resellers for online software as well. Government contracts to install Google systems have been awarded to Unisys, SAIC, and Computer Sciences Corporation, among others. Microsoft's offering has been installed by companies including Accenture, which also offers Google products, and Dell's Federal consulting arm. I.B.M. sells directly an online version of its Lotus messaging system, and contractors like Lockheed Martin and Harris IT are reselling VMware's collaboration product, Zimbra.

Sometimes even these established consultan ts are stressing collaboration. In a recent press release, Unisys said it would save the federal General Services Administration about $17 million through Google. The things it cites, however, aren't the lower cost of the software, but things like energy savings and the benefits of remote collaboration over expensive travel.