February 22, 2012   //  By: Christoph Zeidler   //  Ray Wang on the Forces of Change

SAP.info: Cloud often still means SaaS, on demand solutions. What is your general definition of cloud and what’s the reality behind it?

Ray Wang: Well, there are a couple of ways to define cloud. In the U.S. there is a NIST definition for cloud, but I’d like to break it up into just a couple components. Let’s think about who owns the software. Typically in the cloud you have to figure out, do you own the software, does the vendor own the software? Traditionally, if the vendor owns the software, you’re in a software-as-a-service solution. If it’s being hosted, you own the software or you could choose to have the software hosted by the provider. The second is, how do I pay for the software? And do I pay for the software as in a subscription model? Or I could pay upfront, all on premise. And so the payment model in SaaS typically is a subscription model.

When you think about updates of that software, whether you can control the update or whether the vendor controls the update, that doesn’t define whether it’s SaaS or not. That’s just an option. But more importantly the question is whether everybody is on the same version. Because if everybody is on the same version or has access to the same version, that means they are truly in the cloud, because it’s a one-to-many delivery model.

And then I think the last definition about SaaS that people tend to forget about, or in cloud, is really about where information resides and where the code resides. If all the code and the data reside in the same place, that’s your traditional SaaS model. It’s possible to have virtualization and multi-instance, where everybody runs the same software, yet the data reside in a different location. And typically people are focusing on that as a reason not to go to multi-tenancy. There are different reasons for each one of these. One isn’t better than the other, but multi-tenancy is the most cost-effective delivery model.

SAP.info: Where are the “big players” headed in terms of innovation?  

Ray Wang: There is a lot of cool stuff coming out of Microsoft, and I think it’s going to all happen in the next 24 months. A lot of the innovation coming from Microsoft stems from the work on Windows 8. And Windows 8 has what they call a metro-style UI. And the metro UI is like all those boxes that you see with things that pop up into them. And that is driving not only the paradigm for touch user experience, it is also driving the paradigm for data visualization and it’s also driving the paradigm for how they see the intersection between business and consumer.

SAP.info: What does that mean for SAP?

Ray Wang: Well, for SAP it is in an interesting scenario. It cannot become too dependent on Java, because Oracle owns it, and it cannot become too dependent on Microsoft, because .NET is the same problem. And so you have to take an agnostic point of view. And for SAP long-term, playing the role of Switzerland is important. But it can benefit from a lot of the Microsoft technologies that are there, because at this point in time Microsoft is no longer seen as the evil empire. So what we actually now see is that Microsoft is seen as … I mean it’s just the standard. So, coming out of that, the Windows 8 technology, the ability to use Kinect for motion UI, there are some other interesting innovations that are happening with Link and Skype, the stuff they are doing with the cloud, which will in the future enable one way of getting to subscription billing. And the marketplace that everybody is building, I think that’s where the innovation showcases are happening.

SAP.info: Is there one last thought that’s important for you?

Ray Wang: I think the role of the user groups is going to continue to play a big role for SAP. SAP is making that shift and transition to the new world, and in this phase it really requires embracing a social business perspective. User groups are the community behind that social business.


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