The first cloud front - TRANSITION
The first cloud front has been driven from the top by compelling applications that enable on-demand and distributed access to traditional applications in the enterprise and by consumer social and mobile usage. Companies like Salesforce, and Workday or Facebook and Dropbox have met the first wave of users needs.
In just a few short years since we started the Future of Cloud Computing as a program to benchmark the industry, SaaS adoption has more than quintupled from just 11% adoption to 74%. Furthermore, our 4th annual survey shows 49% of respondents use cloud to fuel revenue-generating or product-development activities. Cloud has become integral to 45% of businesses who say that they already, or plan to, run their company from the cloud.
This first front has also been ignited by the availability of computing as a utility-like service and adopted at the grass roots by developers and forward-thinking entrepreneurs who are literally hatching their businesses in the cloud and developing cloud-native applications.
Alongside these applications, more and more cloud services are also being developed, with the rise of restful APIs to over 11,000 today, that deliver rich functionality accessible as a service. Everything from communication, location and payment services are now commonplace.
The second cloud front - TRANSFORMATION
The second cloud front will be an order of magnitude bigger as these cloud services are combined in previously unimagined ways to deliver entirely new applications and services, such as Uber which uses geolocation to find both users and the nearest cars, analytics to price on demand, communication to broker and connect and finally payment services to close the transaction. This and other applications like it are only possible in the cloud.
In the enterprise these applications will literally transform, and in some cases, disrupt entire industries.
We see it in the North Bridge portfolio where design and manufacturing lie open to this as CAD/CAM moves into the cloud and 3D printing becomes available on-demand. Companies like Onshape, Proto Labs (NASDAQ:PRLB) and MarkForged are emerging to make it possible for simultaneous design and collaboration from the convenience of an iPad, yet with the computational power of the cloud for modeling and distributed collaboration across the globe to test and validate for manufacturing. Only in the cloud.
We call this 3iD - the third industrial revolution - and it has the potential to be both disruptive and transformative as it democratizes the product lifecycle and empowers the maker movement predicted by Chris Anderson in his 2012 book, “Makers, The New Industrial Revolution.”
And consistent with our ongoing thesis of "Everything as a Service", and "Outservicing," it's clear that as more and more capabilities become availabe on demand from the cloud as a service, companies will look to "Outservices" (outsource to cloud services) everything that is not their core competency. It has already happened with HR, which is rarely a core competence in business, where players large and small from LinkedIn to Zenefits are transforming everything from recuriting to benefits into best-of-breed, outsourced services.
Our original thesis of Everything-as-a-Service from several years back and Outservicing will be themes driving the Future of Cloud Computing for years to come. And we look forward to our ongoing program of research, analysis and dialogue with the industry to enable the next generation of entrepreneurs to shape it. A big thank you to the 72 Collaborators that made this possible in 2014.
To see the survey in its entirety see below. If you see a particular slide or topic of interest, you can tweet individual slides, by clicking on the banner on the upper right hand corner of each page.
CALL TO ACTION
Please join us for a second phase of the survey to explore the hot companies and issues in SaaS during the Fall 2014.