The Rush to the Cloud?
As I was boarding my flight today at London Heathrow, I was reading the FT and the story regarding IBM and Salesforce.com making large acquisitions of cloud companies. IBM apparently paid $2bn for SoftLayer of Dallas, TX while Salesforce.com paid $2.5bn for ExactTarget of Mn. The valuations were estimated at between five and nine times annual revenues. The article discusses how the rush to the cloud is reshaping the IT industry.
A couple of years ago, CommodityPoint published its report on Alternative Delivery Mechanisms for CTRM software which also focused on CTRM in the cloud. It was an interesting report identifying a dichotomy between mostly smaller trading businesses that said they would consider cloud-based CTRM solutions and larger entities that said they would not. Of course, Aspect Enterprise has continued to promote its cloud-based TRM solution while other vendors have been willing to consider non traditional delivery mechanisms if asked by the user. Discussions yesterday with Gavin Lavelle, CEO of Brady PLC (a video interview is being finalized as I write) also remarked on the uptake of SaaS-based solutions as Brady have gone from zero clients to double figures taking up a cloud-based option in just the last two years.
To me it seems as if there is still heavy resistance in some quarters to cloud-based deployment of CTRM solutions but their acceptance is also growing. Recurring revenues are also sought after by the vendors and SaaS can provide them with exactly that. We do expect to see more uptake of SaaS deployment in the near future but we still see plenty of room for traditional licensing too…..
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