We used to talk about the dot-com boom, now Dell's doing a dot-cloud Boomi. The purchase of Boomi is smart, and puts Dell in a strong position in the cloud integration space, and in particular the cloud data integration space which I think is key to the business benefits of cloud. In fact I said just yesterday that the real business innovation with cloud will come from the information and data management - see Cloud Review Board - 5 governance responsibilities. But amongst all the analysis I don't see mention of 2 hidden gems which will emerge from this acquisition - one from Boomi and one from Dell.
First I'll review the general proposition, and why it's an important move for Dell, and then the gems.
You've got Dell Dude!
Those dudes who were buying Dell when Dell was the innovator in the PC market are the same dudes who are buying SaaS and "shadow IT" today. It's the outlyers, the edges of the business, the people who need to get things done faster than the IT processes can effectively support. What David Linthicum calls sneaking around IT to get to the cloud.
After these credit-card apps get going - and they usually do get going quite fast and effectively - they begin to come up against two challenges, and they are both to do with data:
- Challenge #1 - how do we get data from/into our other systems (be they other SaaS or corporate on-premise); and,
- Challenge #2 - gosh, how do we get our data? Meaning get it back, recover it, migrate it, disaster-proof it - treat it like a corporate asset and not another spreadsheet lost in the wilderness?
In fact, if these various "edge" credit-card apps initiatives are successful then there will come, over time, a compelling reason to want to have their data integrated and synchronized into a corporate view. Now that's going to be difficult if the corporate IT folk have been left out of the conversation, or ignored, to this point! A key to Boomi's success is in keeping it simple, and Dell will have to maintain that nimbleness and simplicity, plus call the nimble of those in the channel (see below) to satisfy the "you've got SaaS sister" market at the corporate edge.
That's where Boomi steps in. In simple terms Boomi is a SaaS version of Cast Iron, recently purchased by IBM. What seems to have attracted IBM to Cast Iron is that one version of their software sat on an appliance, which aligns perfectly with IBM's "private cloud" sales strategy, while Boomi sits all the cloud itself (Cast Iron did offer their Cloud2 as a SaaS offering, not sure if IBM continues to do so). As Dell says, pointedly, Boomi:
"...takes the cost and complexity out of integrating applications by allowing easy transfer of data between cloud-based and on-premise applications with no appliances, no software and no coding required."
Taylor Buley in Forbes gave a good explanation:
Forrester analyst Stefan Ried recently described Boomi as a "robust third-party PaaS connector," which means, basically, that it's software that helps software play nice with other software. Specifically, it's a data glue that sticks together "on-premise" software from companies like Oracle and SAP and "off-premise" software like financial software hosted by NetSuite or contact management hosted by Salesforce.com.
Jeff Kaplan ponders that Boomi may have sold because it was growing so successfully and needed a big investment to reach the next step. They had to take a decision - find the money or find a buyer. He also points out that Dell's previous SaaS acquisitions - Everdream, SilverBack Technologies and MessageOne - haven't excelled under their new owner. Presumably Dell's learnt from that.
I think Dell's move on Boomi is a very smart one. It will certainly have companies like Informatica and Pervasive looking over their shoulder, as two of the few well established players in the cloud data integration market left (other smaller players include Hubspan, SnapLogic and a babe in the woods Cazoomi).
The purchase by Dell does surprise me, not that they weren't on the lookout. But I would have thought that it would be much more strategic for a cloud provider like Amazon, or Google, or Rackspace, or even Microsoft or even a CSC to have jumped in first. Those companies have to rise to the challenge of managing and integrating cloud-based applications with existing applications and databases, particularly the first three.
Boomi's hidden pot of gold - the channel
One of the strong assets, and perhaps an undervalued one, is its channel partners. There's endless controversy in the SaaS world as to whether SaaS providers actually need channel partners. After all if the purchase is simply and done directly from the vendor's website what role or value-add can channel partners offer?
Boomi has a strong channel program, and relies on channel partners to add new services and applications to its core offer. In fact it is a platform upon which channel partners can not only build their own software apps, to offer to clients globally, but of course they also offer implementation and project expertise to Boomi clients. Partners like WDCi in Australia have established strong businesses as a Boomi partner, for instance. To be sure, this channel strategy is the exception not the rule in the SaaS world and a definite asset for Boomi/Dell.
Dell's Perot Systems will also be able to take advantage of Boomi in the same way the channel partners do - by building on apps, and providing services and implementation.
Dell offers the Boomi channel - social media
Let's hope that Dell can continue to grow and motivate this particular specialist channel. Although it started life as a non-channel business, it now has a successful channel and even more of note it has strong social media credentials and activities in support of the channel. Here again, this is probably an under-rated or even overlooked part of this transaction.
Dell's expertise in social media will leverage Boomi's activities many times over, and will add a of value to the transaction. This will include in support activities, in partner education and training, in collaboration and problem solving, in innovation and idea generation (IdeaStorm), and last but not least in customer engagement and sales generation. All areas where Dell can deploy it's social media skills to Boomi.
Dell has a lot of cred in social media, more so than HP. IBM probably has a bigger investment in social media, but it's not so visible or at this stage potentially added as much business value as Dell's. Boomi's principals are active bloggers with valuable content, and Dell will be able to repurpose that many times over through different social media channels.
Dell as a cloud player?
All up, it's part of a new path which Dell is mapping out for itself. I must admit I have trouble getting my head to accept Dell as a serious cloud player, with even some of the press still calling it a "PC box maker" when publishing this acquisition announcement. But that's something I'm going to have to overcome.
Well done to the Boomi boys!
What do you think of Dell's cloud ambitions?
How would you best leverage Boomi if you were Dell?
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