Force.com: A Platform Years in the Making

When asked about his vision for his CRM SaaS company in a 2005 interview with ZDNet, Marc Benioff stated that, “salesforce.com wants to be everything to medium- and large-size business, the core applications platform and customer portal, just as Windows, Solaris or Linux is an essential operating system layer.” This shows remarkable focus of vision given the strategic path (as discussed in my last post) that Salesforce.com has followed since then. Remember, this is a full two years before the launch of Force.com.

This vision has been the driving force for the firm’s investments and positioning efforts with regard to Force.com. Most recently, Salesforce.com’s addition of Database.com to its Force.com Cloud platform is clearly a means to reinforce the strategy for its emerging PaaS business by positioning Force.com in the enterprise application development market as a “one-stop-shop” for Enterprise-class app development. But how effective is this strategy?

A Platform in App’s Clothing

Because IT organizations often resist disruptive technologies, salesforce.com correctly recognized that in order to facilitate enterprise mass-market acceptance of Cloud Computing, it needed to deliver this new platform disguised as an application, effectively allowing end-users to adopt the Cloud directly at the department level – thereby bypassing IT. As a result, Salesforce.com initially introduced its new application delivery technology (SaaS) in the form of an on-demand application that addressed vital inefficiencies in a common mission-critical business process.

In this way, salesforce.com used its CRM Cloud application to help SaaS “cross the chasm,” enabling the firm to successfully penetrate the enterprise applications market by circumventing the standard IT procurement process. To facilitate the long-term strategy envisioned by Benioff, salesforce.com has shifted its focus to re-positioning Force.com as an all-purpose enterprise applications development platform. Going forward, this will allow the firm to cost effectively address the broader enterprise applications market while building economies critical to future profitability.

Selling the Long Tail

Salesforce.com’s Force.com platform also enables it to effectively compete in the enterprise development market by selling the long tail. Force.com offers a custom applications development platform to address the varying needs of diverse enterprise market segments, where mission-critical business processes do not lend themselves to horizontal applications, often requiring vertical or even proprietary systems.

As such, the firm’s launch of Database.com as a stand-alone enterprise database is a critical strategic maneuver to support the positioning of its platform as “complete.” This also supports an “ecosystem” analogy that many enterprise IT groups are used to in the Systems Software space, wherein enterprise systems are built from a multitude of components, as opposed to a single monolithic solution.

Systems Software Industry Impact

With a complete enterprise-ready solution, salesforce.com can decrease average TCO for systems software while simultaneously lowering buyer power. A firm that adopts the Force.com platform because of its comprehensiveness would then face higher switching costs due to the high level of product integration into its business functions. Also, an integrated Cloud-based solution elevates barriers to entry by increasing customer expectations; new players have to create more value or attack a niche market.

Long-Term Implications

Salesforce.com appears to be effectively executing its strategy in line with Benioff’s vision of being “everything” to Enterprise customers. By first focusing on delivering Cloud Computing in the form of a easy-to-adopt CRM application, the salesforce.com assured the rapid adoption and growth of Cloud Computing in enterprise segments. With the introduction and development of Force.com as an all-purpose PaaS, Benioff has worked to re-positioning the firm to meet increasingly more enterprise system software needs; this is especially true with the introduction of Database.com. As adoption of Cloud Platforms takes off, salesforce.com’s challenge over the next couple of years will be to continue to correctly anticipate and meet the needs of enterprise customers by further developing its PaaS offering. If the firm is able to do this effectively, it will be the principal beneficiary of explosive Cloud Computing growth anticipated over the next few years, which it largely helped to create.

Salesforce.com’s Strategic Path

My last couple of posts have focused on the evolution of the PaaS space, and specifically whether open-source or open standards would define the future of Cloud Platforms. I primarily used VMware’s new PaaS offering called Cloud Foundry, as a prime example of an open-source platform. It would thus be prudent at this point to take a more in-depth look at a Cloud Platform taking the open-standards path.

Background

Since its 1999 launch as an on-demand vendor of CRM systems, salesforce.com has established itself as the leading vendor in the software-as-a-service (SaaS) space, with about $1.55 billion in 2010 revenues from subscriptions to its cloud-based CRM system, as well as third-party apps sold through AppExchange – its online app store. Salesforce.com accounts for about 52% of the $3 billion on-demand CRM systems market, which currently makes up about 30% of the $10 billion total SaaS market. The following graphic shows an approximate breakdown of Cloud Computing market revenues in 2010.

Strategic Shift Towards PaaS

In the last ten years, salesforce.com has made numerous strategic maneuvers to extend its reach into the enterprise applications development market. Since 2009, salesforce.com has been increasingly moving down the “Cloud development stack” by shifting its strategic focus on its Force.com Cloud Platform. A series of recent improvements and additions to Force.com have signaled a commitment to addressing some of the key barriers to PaaS adoption among large enterprises, specifically by concentrating on security and compliance, on-premise integration and, most significantly, open standards.

Commitment to Open Standards

The launch of Database.com, “the world’s first enterprise database built for the Cloud,” is the next critical step in salesforce.com’s long-term strategy to create an “enterprise-ready” PaaS by assembling a Cloud Platform made up of enterprise grade services based on open standards.

Without Database.com, salesforce.com cannot fully meet the needs of enterprise developers that need to build the kind of robust enterprise apps required by the business. With it, salesforce.com is signaling to the market a stalwart commitment to building an open standards enterprise Cloud Platform. This effectively positions Force.com to disrupt Systems Software vendors such as Oracle and SAP by more closely meeting the technical and business requirements of their established customer base – enterprise IT groups and CIOs.

The Future of PaaS: Open-Source or Open-Standards? (Part 2)

Some Couderati have enthusiastically proclaimed that the introduction of VMware’s Cloud Foundry open-source PaaS spells the wholesale disruption of the Cloud Platform space, ushering in the era of open-source in the Cloud. In The Future of PaaS (Part 1), I examined the monetization challenges VMware will likely face with Cloud Foundry given that users will be able to host it anywhere (EC2 or any hypervisor). Based on this analysis, it did not seem likely Cloud Platform leaders such as Force.com or Microsoft Azure would be rushing to adopt an open-source model any time soon.

However, market transformation is typically driven not on the supply side by competitors, but on the demand side by customers; users begin to adopt a new technology because it is cheaper and simpler than the existing market standard, yet meets their needs and delivers a significant buyer surplus (think PCs disrupting mini-computers). In this post, I will examine the ability of Cloud Foundry to continue to innovate and deliver value, as well as how enterprise needs with regard to Cloud services are likely to evolve.

PaaS Innovation

Although there are numerous examples of open-source communities achieving great feats in crowd-sourced software development – just look at Linux – these innovations tend to take the form of new features and bug fixes (i.e. improvements to existing technology), rather than radical innovations of core technology. Core technology innovation requires a focus on solving a specific business problem (think Microsoft SharePoint), thereby creating a platform that can then be utilize across various applications. On the other hand, open-source communities focus on improving the project code, but developers may driven by different goals, and thus pulling in different directions. Though there are exceptions, development is often driven by immediate needs rather than long-term vision.

As an example, let’s take Force.com; unlike Amazon, salesforce.com has positioned its PaaS as a higher-end, more differentiated offering. To support this positioning, salesforce.com has continually added value to the platform by introducing innovative features such as Chatter (built in social collaboration) and SiteForce (website builder). These types of innovations require long-term focus, vision, significant and sustained R&D investment and large-scale integrated development efforts.

PaaS Economics

In my last post, PaaS Market Economies, I examined the economics driving value creation in the PaaS space, and the feedback loop created by economies of scope and scale. Firms with proprietary platforms have a strong incentive to heavily invest in R&D in order to continually add value to their offering. However, with an open-source software development model, vendors do not enjoy the same incentives or economies. Instead a loose community of developers is relied upon to consistently create value on par with a proprietary platform. Thus, I see this model as incentivizing project-based incremental improvements to the core product. This due to the fact that the value created by an open-source platform development community can only be captured by vendors (SIs and VARs) through consulting services.

Furthermore, the value created can heavily outweigh the relatively small cost. If we revisit the Chatter example, by having automatic social integration, Force.com enables better collaboration among users, and thus improved efficiency; this innovation alone can create significant value for an enterprise customer, outweighing the relatively small cost per seat. This will become increasingly true as competition intensifies, the rate innovation accelerates and prices fall. Taken together, this leads me to believe that demand side Cloud economics do not bode well for open-source Cloud Platforms.

The Future of PaaS

In spite of the suggestive title, I don’t pretend to know what the future of enterprise computing in the Cloud looks like. Nonetheless, there are trends suggestive of what the PaaS landscape make look like in a few years. Here are few:

Application Mobility: Rather than having access to the source code for it’s own sake, CIOs will be looking for application mobility. As Ellen Rubin of CloudSwitch argues in 2010 is the Year of the Federated Cloud, to see widespread enterprise adoption of the cloud, IT groups need to be able to build applications across different infrastructures and clouds, be it public or private. Enterprise users need the ability to move all or part (think storage) of an application between public clouds, or even into a private data centers. This may be for various reasons, including economical (end of product lifecycle), compliance (new regulations) or performance (latency and availability).

Open-Standards: The proliferation of consistent open-standards with regard to how applications are built, hosted, and managed in the Cloud, will enable enterprises to assemble IT solutions based on business needs rather than service availability. Currently, most platforms use many closed standards (server platforms, operating system versions, network settings, APIs, storage options), which means that any project built on them is essentially a one-off exercise. Until open-standards are wide-spread, Cloud Platforms will continue to be ancillary to the overall IT systems strategy for many large enterprises with existing infrastructures. To the end, several Cloud vendors such as Cloudswitch, SnapLogic and Virtela are pioneering various flavors of cloud federation; their services act as a middle layer between Clouds and the data center to essentially bridge the gap. This allows enterprise users to focus on application requirements and business needs when building apps, rather than worrying about divergent standards.

Data Integration: Real business value delivered by enterprise systems lies in the data, not the application. Solutions that deliver timely information that improves business agility, decreases time-to-market or provides crucial customer insights can create a significant competitive advantage for a firm. To achieve this, enterprises much be able to share and have access to information across systems and devices. For this reason, tight data integration across clouds and data centers will become an vital aspect of the evolution of PaaS. As such, data integration vendors such as Informatica are beginning to positioning themselves as critical components of the PaaS ecosystem.

Conclusions

Ultimately, the evolution of the PaaS market will be driven by business needs, and never by software licensing models. What IT departments need is to be able to develop applications with precisely the price-point, scalability, availability, performance, SLA and compliance level they need for a given use case.

In the long run, I think this will lead to a sort of “SOA in the Cloud,” with enterprise users being able to use virtually any available Cloud service with ease to assemble applications that fit the precise requirements of the business without having to worry about divergent standards, data integration or private vs. public. Cloud vendors that can innovate to meet the evolving needs of businesses will flourish and those that cannot will perish, regardless of whether they are open-source or proprietary.

PaaS Market Economies

Before I post part 2 of Future of PaaS: Open-Source or Open Standards? (click here for part 1), I want to touch on the economics of the PaaS market. In other words, I want to explore how value is created, delivered and captured by PaaS vendors, and what kind of incumbent advantages (scope and scale) govern competition and profitability in this space. What follows is a brief overview of PaaS market economies (along with the info-graphic above); this should help illuminate the Future of PaaS, part 2.

Network Effects

Although Cloud Platforms do not offer a direct network effect (think Windows or Facebook, where value is created as the number of users grows), there are significant economies of scope and scale that positively impact PaaS vendor cost drivers as the installed user base grows.

R&D investment in the platform lead to core technology innovations and better vendor responsiveness, since vendors are able to more quickly and efficiently introduce innovations in response to changing customer needs. In turn, the resulting product improvements and differentiated features lead to increased adoption of platforms, with new customers signing on, improved retention and existing customers adding seats.

Infrastructure Costs

Increased scale leads to a decrease in average fixed infrastructure costs, including power, labor, security and reliability, creating supply side economies of scale. This also leads to better resource utilization due to a decrease in variability, as different usage patterns that vary by times-of-day, seasons and industries are diversified away; these economies of scope lead to further decrease in average fixed costs.

The PaaS economies described above result in a larger fixed cost contribution per seat as scale increases. The end-result of this feedback loop (see above) is that PaaS vendors have additional free cash flow to re-invest in R&D to further build scale and efficiency, and in turn develop a competitive advantage due to an improved value/cost profile. This virtuous cycle fueled by economies of scope and scale can greatly accelerate pace at which a PaaS vendor is able to innovate, thus creating significant barriers to entry and potentially leading to consolidation among competitors.

The Future of PaaS: Open-Source or Open-Standards? (Part I)

The last few months have been a heady time for the Cloud Platform space, with the introduction and strategic realignment of several high-profile PaaS offerings: DotCloud launched a Beta version of its product, Saleforce.com swept up the Heroku Rails platform and introduced Database.com, Amazon Web Service launched its much anticipated Elastic Beanstock PaaS and followed up with RDS (AWS’s answer to Database.com). Eager observers of the Cloud space have not been disappointed.

VMware’s Cloud Foundry: PaaS Market Disruption Already?

April brings us VMware’s daring ventur into PaaS with its Cloud Foundry open-source Cloud Platform. With its acquisition of SpringSource open-source Java framework, many wondered how WMware would put it use (besides licensing it to Salesforce.com). With this recent announcement, some seem to believe VMware has thrown down PaaS gauntlet. I’m not so sure. What is certain is that it raises a number of questions: how will VMware monetize their offering? What impact will this have on the burgeoning PaaS market? And how this will affect leading PaaS vendors? However, there is an overarching question here: will the future of Cloud Platforms be about open-source or open standards?

In a recent post entitled VMWare Disrupts PaaS Space with Cloud Foundry – An Analysis, Krishnan Subramanian of CloudAve argues that VMware’s launch of Cloud Foundry open-source platform is a move that will completely disrupt the PaaS space and give VMware the upper hand. I disagree with this assessment on numerous levels, which I will attempt to addressed in this two-part post.

Monetization

With Cloud Foundry, VMware faces a challenge that all open-source vendors encounter: how do you monetize the value created by their offering, while effectively scaling the business? One avenue to monetization is providing hosting services, which is precisely what VMware will be doing from the outset. However, since Cloud Foundry can be hosted on any IaaS (such as EC2), infrastructure is essentially a commodity with very thin margins; if VMware charges a premium for hosting, enterprises can simply pick up and move. So unless VMware is able to have a lower cost structure on their cloud infrastructure than Amazon (fat chance), this isn’t the ticket.

Professional service, on the other hand, have always been the bread and butter of open source companies. Still, as firms such as RedHat have learned, this model can be difficult to scale. Unlike software licenses, the marginal costs for professional services (i.e. consultant salaries, travel, etc.) are non-negligible. Thus, generating the kind of contribution to the bottom line that VMware is used to will require servicing a great many customers. Additionally, a successful platform will draw numerous 3rd party vendors; the competition will put downward pressure on service contract fees and shrink VMware slice of the pie.

Thus, on the supply side, it appears unlikely that Cloud Foundry represents a new paradigm for PaaS vendors. I don’t predict the likes of Force.com or Azure open-sourcing their platforms any time soon.

Next time…

But what about enterprise developers? Will Cloud Foundry see the kind of strong adoption that Mr. Subramanian predicts? Stay tuned…

Cloud Platforms and the Chasm

Discontinuous Technology Diffusion

Given the disruptive nature of the Cloud, it’s useful to think about Cloud technologies within the context of the technology adoption lifecycle. This framework can help marketers visualize diffusion patterns as new discontinuous products and services move from the early market to mass market adoption. With this in mind, we can see that various technologies in the Cloud space are in different stages of the adoption lifecycle. Virtualization is approaching maturity given its wide adoption among large enterprises and, given the ubiquity of on-demand CRM and sales force automation apps, Cloud Applications have seemingly conquered the Early Majority market in large enterprises.

As we move further down the curve, we can see that IaaS is not far behind. If we use AWS as a proxy for Cloud Infrastructure adoption (this is plausible given its with huge market-share in public cloud infrastructure), IaaS appears to be gaining acceptance with Early Majority adopters. Still, it has a ways to go until it is an acceptable alternative to on-premise infrastructure for most enterprises. It’s also important to note that IaaS adoption adoption is in large part driven by overall adoption of Cloud services; use of AWS will eventually shift away from the simple provisioning of individual servers to being used as the foundation for large Cloud app deployments.

Cloud Platforms and the Chasm

Cloud platforms still in a relatively early stage of adoption. Thanks to Geoffrey Moore, most people are well familiar with the concept of the “crossing the chasm” in discontinuous technology adoption. In 2010,  PaaS gained limited traction among Visionaries, and later Early Adopters. The first to adopt PaaS were entrepreneurs with fledgling start ups that had both economic and philosophical incentives to adopt, limitations be damned. In general, the market saw a limited number of companies begin to adopt PaaS, either becuase they lacked existing infrastructure investments or sought a source of competitive advantage.

However, over the last half of 2010, the PaaS market’s throttled revenue growth and slow adoption rate suggested Cloud Platforms were at some stage of the chasm. Again, as predicted by Moore’s framework, successful PaaS vendors began to “cross the chasm” by focusing on niche segments with a compelling reason to buy. One such segment consisted of ISVs seeking to reposition themselves as Cloud service vendors, but lacked the resources and capabilities to build an in-house stack. These vendors found their salvation in platforms such as Force.com and Azure; by building on the Force.com platform, ISVs such as CA Technologies and 20/20 Companies were able to focus on what they do best – developing vertical applications. By conquering niche segments, PaaS vendors were able to further develop their technology, better understand market needs, assemble complete solutions and begin to gain wider market acceptance, thereby setting themselves up for mass-market adoption.

Beyond the Chasm

Many in the Clouderati, and even Gartner, predicted last year that 2011 would be the “year of PaaS.” Now it appears that several of the largest players believe this as well – enough to make significant strategic maneuvers to position themselves in the Cloud Platform market. Microsoft, AWS, Force.com, VMware and smaller platforms such as DotCloud and EngineYard have each made significant investments in this space in the form of acquisitions and new features to gain market-share once PaaS switches to hyper-growth. Unlike the SaaS space, competition in the PaaS space at this point is still largely collaborative, focused on growing the overall pie rather than carving it up. This reflects a recognition of the tremendous potential for PaaS to be, as Krishnan Subramanian of CloudAve argues, the future of cloud services. More importantly, as I argued in a pervious post on Industry Disruption, PaaS has the potential of transforming the $201B Systems Software industry, with leading PaaS vendors reaping the benefits. In a later post I will discuss how leading Cloud Platforms are being positioned and what the future of PaaS may look like…

Opportunities, Threats and Mobility Barriers

Discontinuous technological shifts over the past decade have created numerous opportunities and threats, as well as mobility barriers for each of the three strategic groups discussed in my earlier post entitled Industry Structure and Strategic Groups (Cloud Databases, Cloud Platforms and Traditional System Software). Most notably, for a number of years consumers have enjoyed the cost and productivity benefits of emerging Internet technologies such as Web 2.0, social networking, web-based computing and storage, and mobile apps outside the office. However, enterprise applications provided by enterprise IT groups have significantly lagged behind. This technological misalignment is fueling an expectations shift with regard to enterprise technology; CIO’s are feeling increasing pressure to provide the same services in the workplace as are enjoyed by employees when they go home.

Cloud Databases

Cloud database vendors have directly benefited from the demand for mobile and Web 2.0 technologies. Numerous start-ups are building mobile apps and data-rich websites requiring the use of a relational database, but cannot afford the large fixed-costs associated with on-premise infrastructure. However, due to latency issues, Cloud databases have limited use for on-premise business application deployments. Consequently, DaaS has largely been adopted by SMBs, particularly start-ups building Web properties or mobile applications, where latency is often not an issue as many websites are already hosted in the Cloud, or the application logic is located on the device (i.e. an iPhone). This technological limitation may serve as a mobility barrier for pure-play Cloud database vendors that want to make inroads into the enterprise applications development market.

Cloud Platform

Cloud platform vendors have an enormous opportunity to benefit from this industry shift as CIO’s seek solutions to accommodate the growing demand for modernized IT services, while still providing the enterprise features, system integration, security and reliability that stakeholders demand. Likewise, ISV’s serving vertical enterprise markets are also beginning to feel pressure to deliver more flexible on-demand business applications to their customers. Unlike Cloud applications, PaaS enables both of these groups to build custom applications from the ground up that are integrated, scalable and reliable.

Traditional System Software

Traditional software publishers face a significant threat resulting from shifting needs with regard to enterprise applications. There are substantial mobility threats due to specialized resources and capabilities, as well as technology and cost structures that served them well in traditional Systems Software sales, but may make it difficult to shift to a subscription-based model. Additionally, vendors such as Oracle have exhibited concerns about on-demand offerings cannibalizing their traditional revenue streams. Nevertheless, some vendors – mainly Microsoft with the Azure Cloud platform – have made significant investments in building out their Cloud-based offerings, signaling a move towards the Cloud Platform strategic group. Those vendors that are able to successfully adopt a Cloud-based model have a significant opportunity to leverage existing relationships, reputations and brand equity in the enterprise space to stake out leadership positions.

Industry Disruption and Competitive Dynamics

Industry Disruption

Until recently, Cloud computing technology has undershot the performance needs of large enterprises, primarily appealing to the SMB market. However, as Cloud vendors continue to push the boundaries of their technology’s enterprise-readiness by focusing on key value drivers for enterprises, Cloud platforms are beginning to disrupt firms in the Traditional Systems Software strategic group by creating a credible threat of substitution. Furthermore, the performance needs of enterprises appear to be growing at a faster pace than the capabilities of traditional software publishing firms, further contributing to conditions that would support substantial disruption of large Systems Software firms currently holding majority market share in the enterprise development market.

Eventually, Cloud platforms will begin to indirectly disrupt the traditional Systems Hardware industry, which includes infrastructure such as servers used for custom enterprise application development and on-premise hosting and storage. This is because PaaS solutions include an abstracted Infrastructure-as-a-Service (IaaS) layer hosted and managed by the Cloud platform provider, negating the need for on premise infrastructure beyond networking equipment to access the Internet and client devices to interact with Cloud applications.

Competitive Dynamics

Pure-play DaaS vendors offer on-demand access to relational databases as a service, with high reliability, scalability, and low TCO. However these vendors lack the resources and capabilities to deliver the performance, security, and vendor reputation required by large enterprises customers. As a result, these vendors primarily serve the SMB market. On the other hand, vendors offering robust Cloud platforms increasingly provide integration with on premise IT, customizability, security and reliability that approach what is currently offered by traditional Systems Software vendors. Existing Cloud platforms including Microsoft’s Azure and salesforce.com’s Force.com have thus far largely met the needs of the small and medium-sized business, but are increasingly making inroads into the enterprise application development market. Lastly, traditional Systems Software vendors currently meet and exceed the performance needs of both SMBs and many large enterprises, but lack the scalability, ease and speed of implementation, low up-front investment, and mobile and social integration that enterprises increasingly demand.

Industry Structure and Strategic Groups

Before diving into the competitive dynamics, I think its useful to discuss industry structure and competitors. The Systems Software industry is comprised of three key strategic groups:

• Cloud Databases: Vendors in the Cloud databases (aka Database-as-a-Service or DaaS) strategic group provide on-demand relational database software, available on a pay-as-you-go basis, based on a multi-tenant and elastic architecture. This enables users to employ a relational database without having to purchase any software or servers, or manage the configuration.
• Cloud Platforms: Vendors in the Cloud platforms (aka Platform-as-a-Service or PaaS) strategic group provide complete on-demand development environments and tools, including an abstracted Cloud infrastructure layer and Cloud database, enabling enterprise IT groups and ISV’s to develop, test, and deliver custom on-demand business applications without investing in traditional Systems Software or infrastructure. Some Cloud platforms, such as Microsoft Azure, also offer a stand-alone relational Cloud database, putting them in direct competition with pure-play DaaS firms.
• Traditional Systems Software: Vendors in the traditional Systems Software strategic groups provide programming languages, relational database software, Integrated Development Environments (IDEs), private Cloud environments, middleware, and other tools enabling ISVs and enterprise IT groups to develop, test, host and manage custom on-premise business applications.

The way in which each of the strategic groups compete is defined by the idiosyncratic set of value and cost drivers as summarized by the following table:

In the next post, I will focus on how Cloud Platforms are disrupting traditional system software competitors…

New Blog: Cloud Platforms

With my MBA behind me and time on my hands, I’ve started this blog devoted to cloud computing. In my humble opinion, most of the transformative action over the next few years will take place in the PaaS space; new cloud platforms will continue to disrupt the tradition systems software industry and bring about new paradigms for how enterprises can leverage technology. With this in mind, this blog will focus on (but will not be limited to) analysis of the Cloud Platform space.

With this in mind, I’ll start off with a definition of the industry being disrupted: System Software

The $201B Systems Software industry serves enterprise application development markets via direct sales and channel partners such as VARs, system integrators and OEM resellers. In concert, industry products and services enable buyers, including enterprises IT groups and Independent Software Vendors (ISVs), to manage the entire software development life-cycle, from building and testing, to deploying and delivering, on-premise and Cloud-based business applications.

The industry ecosystem includes suppliers of industry inputs such as hardware manufacturers; channel partners such as VARs and system integrators; substitutes such as open source and Cloud software; and compliments such as servers and PCs. Industry suppliers also supply firms selling substitutes and complementary products.