For example, Salesforce.com, Microsoft CRM Live and a slew of other CRM cloud services are only one class of cloud applications begging for add-on services. Each of these has strengths and weaknesses and most are targeted at the core use cases specific to their horizontal solution space. Software product developers working in complimentary horizontal spaces, like Marketing Automation, or in verticals like Manufacturing, Professional Services, etc. are well positioned to tap into these enormous customer bases and offer their solution extensions if they can host them in a cloud of their own and integrate effectively.

At Technoligence right now we are working on a project that will use Azure to extend a CRM Live solution with a custom quoting and proposal generation engine. It looks something like this:

Similarly, some of the work our partners are doing with Marketing Automation could be implemented like this:

Why Azure?

So why do I think Azure is the right cloud platform to build these businesses on, as opposed to something like a hosted datacenter or clouds like Amazon EC2 or Google App Engine? Here are a few main reasons:

• Platform, Not Plumbing: Azure provides software developers a clean computing platform for implementing solutions without having to worry about the plumbing needed to get their solutions in place. The combination of Web Roles and Worker Roles provide a highly scalable container set for implementing workloads.

• AppFabric As The Bridge: A huge advantage that Azure has, especially as a compliment to many of the SaaS solution clouds, is the ability to deeply integrate into customer on-premise computing infrastructure through what Microsoft calls the AppFabric. This service bus allows cloud applications and on-premise platforms to easily and securely connect and interact.

• Codename "Dallas" Data Feeds: A very exciting component of the Azure platform that Microsoft is in the process of bringing online are the "Dallas" data APIs. Imagine having access to map, weather, traffic, AP news, financial data, etc. to draw on that a custom add-on solution can use to extend a core SaaS application. I think this is going to be a huge opportunity for complimentary services and mash-ups in the near future.

I’m compiling a list of add-on solutions that could be started today on SaaS platforms plus Azure. Let me know your ideas and I’ll write up a post listing the best.

First a definition of "cloud" in this context: There are various ways to virtualize platform layers in hosted internet services that can qualify as "cloud." You can virtualize the traditional infrastructure, the server hardware, and provide a virtual server environment hosted in an internet connected datacenter. Beyond that, you can move the level of abstraction up a layer and virtualize the application or solution platform as a service, and build custom solutions on it. While infrastructure virtualization is interesting, the development teams using it still need to configure or build the application platform plumbing. Greater value is provided by offering a cloud solution platform environment, as less plumbing needs to be implemented (even if it still does need to be considered.)

So what does Microsoft offer?

Windows Azure

Windows Azure is a complete set of custom application plumbing available as a cloud service. The core services are a layer above the idea of a virtual server, providing a scalable application platform for developers to build out custom solutions without having to worry (much) about platform configuration and scaling issues. Adjunct services of the platform provide SQL data services in the cloud as well as the ability to extend application integration to on-premise solutions.

While there is a cost to using application services like these, the benefits are often great and come in the form of reduced application plumbing complexity, faster time to market, better application/service scalability, etc.

However, Azure is merely a platform, similar to a .NET application server or a WebSphere server. It is up to application developers to build custom applications from the platform up. It’s on this point that CRMLive has something slightly different to offer.

Dynamics CRM Online and xRM

What Microsoft has provided with Dynamics CRM Online is a hosted version of their CRM solution. What has come along with that is the ability to customize the solution down to its roots, building completely new business applications, if desired, that may have no relation to CRM. Microsoft calls this customization xRM (where the "x" stands for whatever you want it to.)

In CRM Online the level of customization is slightly more constrained that in the on-premise installations of the product, but there are ways around that. Integrating additional application functionality from outside CRM Online (e.g. from a separate could based application service) can round out the customization possibilities. A custom engineering configuration and quoting system I’m working on now uses this approach.

xRM is great for entity relationship based custom business applications. Reporting, workflow, and business user customization are built into the platform. xRM doesn’t makes sense for a wide variety of custom services and solutions (where you would use something like Azure) but for the class of business solutions it does make sense for the benefits are huge. The strong business application framework is a whole additional layer of plumbing that is already done, allowing the architects and developers to focus directly on the business problem.

Microsoft seems to be downplaying the apparent strengths of the xRM solution approach from their initial marketing messages a year or two ago. I’d expect this is in an effort to not confuse their development platform messaging (which I may be doing right now.) However, I think the feasibility of xRM, especially in the cloud, is huge under the right circumstances.

Let me know if anyone needs more details and we can talk further on either of these or any other cloud computing  platforms.