Enterprises are increasingly turning toward cloud deployment models (including SaaS, PaaS, IaaS, etc.), attracted by promises of fast deployment, lower upfront costs, and greater elasticity in pricing and consumption models. This trend has been further fueled by resource constraints (capital and people); cloud solution maturity (sophisticated functionality, customization, and integration); and “empowered” workers (seeking DIY technologies to drive business results). However, the growing use of cloud technologies creates new challenges and questions in areas like TCO, security, support, and vendor management.

Enter cloud sourcing. Cloud sourcing typically refers to a model where third parties play a broker and consulting role in helping firms leverage the cloud strategically across business applications.

Cloud sourcing provides alternatives to traditional outsourcing, packaged application implementation, and application development. Cloud sourcing spans applications, utilities, and services. Cloud sourcing strategies include both the use of cloud applications such as salesforce.com and Workday to deliver business applications as well as the sourcing of complete managed processes via cloud applications plus associated services, such as offerings from Capgemini and Wipro.

Forrester will be part of an upcoming panel at Global Sourcing Forum in New York City on October 13 that discusses key elements of and considerations for cloud sourcing, including:

• How strategic sourcing decisions can include cloud-based solutions.
• What SaaS, Paas, IaaS, and BPO mean in the cloud context.
• Practical lessons and best practices for adopting cloud solutions.
• Challenges with cloud sourcing and how to overcome them.
• Emerging providers and solutions for cloud sourcing.

Marc Benioff, CEO of salesforce.com, gave a typically energetic performance at London’s Royal Festival Hall yesterday, both in the main-stage keynote and the private lunch for press and analysts. In addition to some humorous digs at Oracle, SAP, and pretty much any company that wants to run its own data center, Benioff described his vision for enterprise applications in the world of social computing, which he calls Cloud 2. Key to this vision is salesforce.com’s own Chatter application, which is . . .  er, well actually it's not really clear what it is. Various spokespeople described it as an internal Facebook, a collaboration engine, Twitter but secure, but to me it still seems to be a user interface in search of an application.

The demonstration reminded me forcibly of the scene in Bruce Almighty in which Morgan Freeman lets Jim Carrey hear all the prayers being made at that instant by the citizens of Chicago. The user gets a stream of tweets, discussion threads, notifications, and alerts from feeder applications, messages from colleagues to each other, general questions, etc. My question, which no-one could answer adequately was “how is this different from email?” The features they cite — filtering, highlighting, threading, categorizing, etc. — are all in Outlook if you care to use them.

The main difference, apart from the fashionable user interface with the sender’s photo next to each message, is the switch from emailers deciding who they want to read their message, to readers deciding whose chats they want to see. Benioff’s description of his own Chatter feed puts him as the omniscient Bruce, watching every sales process, customer service problem resolution, product design collaboration, and invoice approval throughout his organization.

Business users often view IT SVM as a bottleneck to getting new technologies that will make them more personally and professionally productive and that also will help ensure their firm’s competitiveness. Affordable mobile technologies like smartphones (Research In Motion’s BlackBerry, Apple’s iPhone, and Google’ Android are the most popular operating systems), cellular data air cards, network-connected PCs and tablets, etc. make it a lot easier (and hence more tempting than ever) to bypass IT’s seemingly archaic and slow-moving sourcing practices.

As a result, employees are increasingly bringing their own technology into the workplace. Forrester calls this trend “tech populism,” and it’s quickly gaining momentum. It might be a personal laptop sitting on the desk next to the corporate PC, or a personal smartphone that’s loaded up with self-purchased applications and freeware, either or both connecting to the employer’s guest WiFi Internet connection.

Additionally, more and more, traveling employees are leaving their business laptop at the office or at home -- relying instead either on their smartphone for simple email access during one- or two-day trips, complemented by personal thumbdrive memory sticks onto which reference and presentation documents have been downloaded and will be viewed (and possibly manipulated or transferred between multiple noncorporate devices) using a hotel, public kiosk, customer, colleague, or partner’s PC. So much for IT’s security policy enforcement! If a file or document can be downloaded onto a personal external drive, what happens to it afterward is at the discretion of the employee –- who after all usually is just trying to be more productive while taking better advantage of easier-to-use hardware and software tools than those provided by the company.

We’ve all heard software reps blame “revenue recognition” and “Sarbanes-Oxley” as an excuse for not giving an extra discount or contractual concession. IT sourcing professionals may now hear “GSA Rules” and the “False Claims Act” cited as similar justification: “We didn’t give that concession to the government, so we can’t give it to you.” Could that be the worrying unintended consequence of the Justice Department’s action against Oracle: http:/searchoracle.techtarget.com/news/2240019712/US-government-sues-Oracle-for-tens-of-millions-of-dollars?

I can’t comment on the details of the Oracle case, but I’m sure it is complex and two-sided. For instance, I’ve helped clients negotiate reasonable compromises with Oracle to handle special circumstances that won’t apply to many other organizations. These may have involved an extra discretionary discount, if Oracle didn’t have a programmatic way to handle the exception. I wouldn’t expect to get the same concession or discount for another client to whom those special circumstances didn’t apply. For example, this report describes one issue that is particularly important to public sector agencies, but whose impact varies widely: Do Your Software Contracts Permit External Use?