The tech behemoths Amazon, Microsoft & Google are established players in one of the battes that will change the future of customers view and investments of computing. This is an area with a potential hundred billion dollars plus that can be secured for the vendors – a lucrative space that each one wants to corner : the cloud. For a quick recap of the dollars under consideration - read here. Cloud lets business tap on demand the processing, storage and software over the web. Tall, powerful and cool servers with gargantuan memory onboard installed inside enterprises now are gradually giving way to tap on need model –use when needed and shut them down in other times. The vast data centers and governance brought in by these tech behemoths make them ideal partners for business to tap such services on a need to have basis – whenever and wherever required.

Amazon is by far the well-established leader here with a revenue that far exceeds the combined revenue of all competitors put together. Amazon partly achieved this by bringing a single-minded focus to this space to scale up and win and it paid back handsomely. Amazon’s first-mover advantage coupled with slow reactions from competition has now made Amazon an almost insurmountable lead in business in this space. That’s the focus and attention of the next two players. Microsoft has been pushing Azure extensively last 2-3 years and clocking impressive success. The lesser known of the trio in this space – Google is now flexing its muscle and is now focused on striking it big here. Google is recognized primarily as the early proponent of cloud computing – after all, Google built huge date centers in its early days and ran services like search, gmail and maps , available around the world and with unthinkable scale in action. Alongside, developers build other applications on top resulting in an expanding google universe. Google has the strong reputation of running scalable, secure services and recognized as one delivering successfully for a long time. By being late and remaining indifferent to this space, Google lost out on big time opportunities that were out there and Amazon happily grabbed these. Now, Google wants to get back aggressively and be counted as large player in this space and is increasing its investments, market messaging and outreach efforts. Last week the company hosted an event to talk about their upcoming plans around the Google cloud platform and talk loudly about some notable success that they have notched thus far. I listened to the webcast and followed the announcements keenly to see how Google is planning to move things here and I heard good actionable things.

Google’s overall messaging shows that the momentum in the business continues and the focus to scale this platform with enterprise as a key segment to focus on for adoption. Google positioning is getting better to take a sizable chunk of business in the ever growing public cloud space over the next few years. The overall market is projected to have 50% of the enterprise workloads moved into overtime. Google paraded customers/customer stories – the likes of Spotify, Coca-Cola, Disney etc. as proof of successful adoption of their services.

The emphasis on a move forward basis is positioned around:

A. Machine learning as a cornerstone of their approach and hence drive the attendant benefits for customers.

B. Monetization/Commercialization of native security tools used within Google to make these available to customers.

C. Make ease of deployment and migration more easy.

In terms of upcoming innovation, consistent with its focus on enterprise adoption, Google talked about the lofty vision of No-ops goal for enterprises. This will be an ideal demonstration of the power of cloud computing and if Google and others are able to make it happen everywhere, it’s a true sign of the changed paradigm here.Another important facet of the evolution of the cloud revolved around the extreme emphasis on machine learning and the Google cloud platform’s leverage of this. A new product called Tensorflow has been open sourced by Google and it is their core belief that embracing machine learning will become a non-negotiable for innovative startups focused on scaling globally and offering sophisticated services.Add into the mix cloud monitoring tools working across clouds – enterprises can hardly resist massive cloud adoption with these. And in order to keep helping enterprises adopt and scale faster, Google wants to focus on the three important aspects of cloud computing – data centers, security and containers.

I drilled into these a little more to find what could be differentiated in offering such services and what I could recollect from the conference webcast included the following, which Google finds as the drivers for increasing enterprise adoption of their services.

1. Better value: GCP can cost up to 50% less than competitors. Google provides automatic discounts as customers consume higher volumes. And GCP also offers custom machine types (i.e., cores or gigabytes), which helps save customers versus static instance types from other vendors that often lead to overprovisioning.

2. Accelarate innovation: Google’s approach here is to allow customers to run applications with no additional operations staff needed. For example, Google showcases Snapchat here - grew from zero to 100mn users without hiring an operations team (just two people).

3. Risk Management : Google shall be focused on providing best-in-class security for customer’s data and digital assets, protect privacy and help in conforming to compliance and regulatory needs.

4. Open Source adoption –leading to better management by customers for products like Kubernotes( focused on managing data containers).

I got the feeling that the GCP was comparable to Amazon’s fabled AWS services for the purpose of enterprise adoption. While the engineering and under the hoods battle is one part of the equation, the real determinant of success and also ran lay in shaping market forces – GTM, Solutions, Partnerships, support and ease of doing business – an area that Google will have to heavily focus on. With Google’s stated plans to triple their data center regions and with some good early demonstrated success, the market should begin to warm up for Google.Enterprise success depends not just on what’s available from a service provider – determination of what and how to move to cloud, transforming IT landscape, flipping over the governance model and change management – all these have a say in the eventual success of any cloud initiative. With substantial progress and focus on this space with the tech giants competing aggressively for their pie in this fast growing space, the competition expands the market, services get more sophisticated and yet mature fast and the industry improves and courtesy of Moore’s effect, the customers get superior services at a lower cost. It’s a win-win situation for all.

I have used Concur system for several years and had seen it evolve over time. Earlier this quarter, when I saw this announcement about Concur, Uber and AirBnb coming together, I knew that they are aiming big, given Concur’s active partnership with the likes of United, Marriott, IHG and Avis. There is definite meat behind the claim that “Concur has developed an open platform to connect the corporate travel ecosystem, such as airlines, hotels and car rental companies in new and innovative ways”. After all big things like industry disruption happens through convergence of forces and in the software and services industry could mean that either a platform or ecosystem interplay bringing in differentiated experience or results. And that Concur was looking for a buyer was there in the air for a while.

SAP buying Concur is a decent positive decision in my opinion. As someone who travels a lot on business, I can tell you nothing endears this class of users than an enterprise class application working with the smooth and suave ways of working with consumer applications. The number of people waiting for such application could run into huge numbers. The scope and reach of this application does not stop with the current outline that we see but can expand horizontally to cover many more things, with substantial scope for innovation and the ecosystem expansion. The target industry is seeing growth in multiple dimensions - players like Uber expanding internationally and the likes of airbnb seeing manifold increase in transactions routed through Concur,indicates which direction things can move -only up.

Look at the SAP enterprise cloud footprint- Success factors from HR angle, and along with Ariba on the supply side and their huge user base leveraging core budgeting and finance apps- SAP is building a rich portfolio. Plus, there’s a HANA angle to this.

- I think HANA powers the analytics for Concur, or else this can happen soon.

- The HANA approach that’s already pushed heavily with SuccessFactors and Ariba will add the non transactional part of Concur - its safe to expect that ConcurInsights will be an early target to move to HANA completely.

- Concur messaging embracing HANA would be an interesting possibility as well.

- At present, Concur has integration interfaces with various platforms -Netsuite, Salesforce, etc including SAP systems.It can be expected that Concur connectors for HANA Cloud Integration , a predictable path simialr to the standardized connectors for SuccessFactors, already in place, gets repeated.

- Concur has some wannabe solutions that could be replaced by larger Ariba network solution in the spend management space and together could become part of the business network solution for enterprises.

-The Concur App Store is impressive and has an impressive array of partner applications. That early vision of building such a tight ecosystem with big and small payers, am sure got Concur’s founders rich returns today, Its not easy as a small niche player to go and sell to large enterprise and consumer players to be part of an ecosystem driven by them.

- With millions of users, now leveraging Concur’s platform , their data analysis on travel and entertainment provides unique insights - such as ancillary expenses are more than main expenses. The range and depth of insights could be a powerful data set that could become a service and a reference benchmark as well.

- The combined power of 50 million cloud users coupled with API strategies that they can be exploited would mean that the platform can substantially expand and begin to create a new robust ecosystem of its own - much more powerful at one level than the traditional SAP core app user base.

While it’s clear that buying Concur may not add to SAP profits immediately while pushing its topline by 700 million USD ,they key to note is that this is cloud stream based revenue and typically would grow substantially faster and is more sticky and predictable. The range of services that can be extended to make user experience more rich, relevant and engaging is enhanced substantially helping launch and release of new features and functions more effective, helping in the process to earn more returns from the customers. This also expands on the impact of SAP Ariba acquisition as the value of the transaction handles increases to 600 billion annually, a very high number by any standard. This is a major fillip for SAP’s foray into digital business, an agenda being pursued for last several years, starting with Ariba. Let’s look at this form another lens - the enterprise software industry is undergoing such a massive change - the speed of the change and the range of the change in the business models are truly mind boggling.

The tech ecosystem is itself changing fast. The rapid convergence of forces make it more potent and the traditional boundaries and model of operation - centralized system to a more open and partnership based ecosystem makes building digital business systems more attractive commercially and more scalable in its reach. While the traditional challenges of integrating Concur teams and solutions will definitely exist, SAP is now wiser having digested the likes of Ariba in the past. 8+ billion dollars for acquiring a company at 10x projected sales is not small money, by any standards. Concur is also the owner of TripIt, a travel management tool that has widespread use. TripIt has been independently run post the acquisition by Concur, and is said to have grown rapidly ever since. The current SAP users or Concur users may not see any immediate benefit of this acquisition, given the evolved services that Concur and SAP have. SAP has made some bold moves to become a player in the cloud space. The greater opportunity for SAP lay in reimagining the complete ecosystem that it has built over the last 15 + years to help in redefining their positioning as the leading enterprise cloud player. Indeed, this is an interesting journey ahead.