Digital Transformation

The Obvious Future of Cloud-Based Automation

by | July 14, 2015

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The Obvious Future of Cloud-Based Automation

The next time a friend asks you “what is a packaged application”, why not offer an honest answer? “A packaged application is spaghetti code with tens of thousands of configurations written over the last 20 years in a patchwork of patches.”

It is not easy to take 20 year old code that is continually patched with backward compatibility and take it to the 21st century. Even Disney would struggle with that.

The Magic of ERP!

The Magic of ERP!

The Moment I Knew Something Was Wrong

In the year 2000, it hit me. Open source became a powerful force in the world of operating systems and commercial applications. It struck me as amazing the speed in which the open source projects were evolving. For the first time in history, incredible applications were being developed at the speed of light.

The key to open source’s success lies in its inherent “instant adaptability” – to business and community needs and with very little fuss. No committees, no endless meetings with little to show for.

The Engine of Our Economy
Look at today’s most successful open source software – Android, Linux, Ubuntu, Mozilla, MySQL, Apache and WordPress.

All of these projects adapt to changes quickly and are easy to upgrade.

Now let’s compare open source to enterprise business applications. The gap is astounding. Enterprise applications struggle to be agile and are slow to change. With all due respect to your favorite open source projects, business applications play a vital role in the global economic engine. You just can’t compare Mozilla’s impact on GDP to that of enterprise applications.

Enterprise applications are the engine of our economy and we absolutely need to treat them as such. How can we allow Linux to improve faster than business apps?

Even on the GUI level, only now in 2015 are we seeing the first steps of ERP going towards HTML 5. For every $100 that ERP invests in software costs, only a miniscule $1 goes to user experience. Apple and Google would never get away with this.

Automation is No Longer a Buffet Option
There are things that we can improve, things that we can fix and some things (like old luggage or a flip-top phone) that just need to be replaced. When Panaya was founded in 2006, we looked at the customer portfolio of SAP, Oracle and other ERP vendors and immediately realized that we cannot fix or rebuild these applications to be ready for the 21st century.

We can use technology such as simulation of a system’s logic behavior, a simulation of code in order to improve the ability of the customer to be responsive to the business demands.

The second tier of automation that we at Panaya and other automation companies added is to how the next generation of packaged applications will look like and build a foundation for lifecycle automation based on what we have learned over the last decade.

We proved our thesis with over 1,500 customers and thanks to our recent “Infosys exit”. Infosys isn’t alone – I think that other IT service companies aspire to be innovators. They are all on the hunt for the next generation automation services.

Automation is no longer an option. In 2015, automation is a standard, not a luxury.

Your competitors will be using cloud-based application automation. Are you?

Enterprise’s Surprises
When companies like Salesforce and Workday launched their packaged applications delivered over the cloud, they definitely fixed some of the fundamental problems – things like multi-tenancy, the Pareto principle (20% of the features that we use 80% of the time). They and others built solid, scalable applications.

But then, they started to penetrate the large enterprise. Suddenly, the ALM (application lifecycle management) that the vendors provided became very naïve for the needs of the large customers.

Why? They were built according to the requirements of small shops. When you go to a “mom and pop shop” and assess and build the requirements of your packaged application, most of what they need are standard and are also needed by large enterprise organizations.

When you move up in the customer hierarchy to larger customers, they still need the same features. But something else comes up:

• Large enterprises cannot afford downtime.
• Large enterprises need a systematic way of deploying changes.
• Large enterprises need to understand the impact of upcoming changes.
• Large enterprises have never-ending integration requirements – from within their organization and to other enterprises.

Mom and pop shops aren’t as connected to other organizations and they aren’t inundated by regulatory requirements. If a small shop is down for a few hours, you won’t read about it in the Wall Street Journal.

For the SMB’s, about 95% of their needs are functionality related and 5% are management and lifecycle related. No outside interfaces, no regulation and no criticality in the stock market.

For large enterprise, you need a totally different approach. You cannot port your SMB applications to enterprise, nor your enterprise applications to the mega-caps.

The Future of Application Automation
I believe that in the future, ISV’s (independent software vendors) will focus on building applications solely for enterprise and SMB’s.

There will be other cloud-based automated ALM and for cloud-based packaged applications for the enterprise and mega-caps.

Automation is going to follow ERP to the cloud. Read that last sentence again – it’s huge. Panaya and other future automation and acceleration startups are going to revolutionize lifecycle management for enterprise and mega-caps in ways that I couldn’t have dreamed of when I co-founded Panaya.

The Tip of the Mega-Cap Iceberg
Remember author Arthur C. Clarke’s (2001: A Space Odyssey) famous quote about technology? “Any sufficiently advanced technology is indistinguishable from magic”.

The need for more automation is coming from enterprise and the mega-caps. As much as Panaya is doing, there is a huge need for even more ERP automation, acceleration and change startups. We’ve only hit the tip of the iceberg.


Mega-caps want – and need – to change in order to grow. They’re held back by their own size. Automation is the only way forward. Mega-cap automation is not a “grassroots movement” – domain knowledge comes from within and not from SMB’s.

Enterprise and mega-caps are starting their journey to agility and we have a lot of work to do!

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