Ten years ago, the cloud was this mysterious entity that existed in the ether and supposedly held important data. Skepticism abounded. Today, we see a different cloud – one that has been proven to be reliable, functionally adequate and complex enough to handle even the most complicated organizational structure. The adoption of the cloud is growing and this transition will undoubtedly have an affect on enterprise software.

One area in particular that stands out is enterprise software application strategy. In the days of on-premise software, companies traditionally standardized their applications around a single vendor. In other words, they got everything in Oracle or SAP. However, with the cloud, this method is becoming less relevant.

My company, Software Advice, focuses on CRM reviews and comparisons, but we also keep an eye on the rest of the enterprise software industry. Here are some things we think companies should keep in mind when developing an application strategy in the cloud.

1. Is best-of-breed the best choice?
Traditional thinking has been that the integrated suite always wins. However, cloud vendors have come onto the scene and shaken things up. New best-of-breed functionality has been developed by cloud vendors, and those the legacy on-premise guys have tried to keep up, the majority of application innovations seem to be coming from best-of-breed SaaS vendors. Because of this, companies are beginning to see the value in buying the best standalone products that meet their business goals, as opposed to going for the suite. This is not true for every application, of course, but for those that are most important to your company, such as a sales force automation (SFA) system, best-of-breed is becoming the top choice.

2. Does the cloud API trump middleware?
Cloud API’s (application programming interfaces) are gaining in notoriety due to their promise of easier integration and customization. In the past, many companies have relied on middleware, which serves to connect two systems so that they can essentially “talk” to one another. The buzz around API’s has created this idea of off-the-shelf integration when it comes to cloud apps. It is true that technology has advanced and improved API’s, but let’s not sugarcoat anything. Integration between two complex systems such as enterprise resource planning (ERP) and customer relationship management (CRM) is not going to happen off the shelf. The need for middleware still exists in the cloud, and many vendors are actually creating SaaS-based middleware systems to meet that need. Some vendors have even adopted this technology into their stack so that it is already a part of the system when the end user makes the purchase.

3. Keeping up with the Enterprise
The media loves to take a hot topic and run with it. Because of this, there is a false notion that cloud domination is on the horizon. Yes, there is a lot of development happening in the cloud, but the majority of the enterprise software industry is still controlled by on-premise legacy vendors. Part of the reason for this is a cultural barrier. Companies are used to doing things a certain way and they are not in a hurry to change. They have a sense of security with their systems, and whether or not that security is real or imagined, the mindset exists and will be difficult to overcome. However, this technological progress also exists. In today’s world, things move at a fast pace, and there are no signs that anything is slowing down. If companies wish to remain relevant in the future, they will need to develop a scalable application strategy that will allow them to keep up with the market. The best thing to keep in mind is: What are your business goals? What applications strategy is going to help you meet those and stay competitive in this real-time, mobile economy?

Analyst Michael Fauscette sums it up pretty well: “[Your strategy is] not based on what the cool technology is. It’s based on what you need to get your job done effectively and compete in a global environment. If you don’t have that figured out, you’re out of a job.”

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