Cloud Enablers

We had a brief discussion at one of the meetings recently. One member asked what VMware's relationship to Cloud Computing is. I think there was some agreement that virtualization is an enabler of CC, but we didn't get to the crux of how it is one. I've seen some discussions which put Cloud Computing at the intersection of a number of technological advances, but it seems to me that there are three technologies that get the nod as economic enablers of CC. Without these three, the financial numbers don't work out for putative CC providers, and therefore, for the industry.

Virtualization is certainly one economic enabler, allowing a single server to hold multiple instances of an application, and thereby drive utilization, multitenancy, and rapid re-provisioning in the datacenter.

A second economic enabler is SaaS. This allows centralized management of applications, reduces the cost and complexity of upgrades and release management, and allows new generations of end user devices to have access to heretofore inaccessible computing resources and functionalities.

Finally, there is the hardware component - blade computers. As blades became mainstream, datacenters were able to scale horizontally, but without the space, power, and cooling concerns that plagued large datacenters in the era of "server racks". Now, the same footprint in a datacenter can accomodate 4-16 times the number of compute engines, (each a potential virtualization platform) and each with an acquisition cost that averages 1/4 to 1/3 of the typical cost of a rack-based server of the previous generation.

With these three technologies in place, the idea of offering on-demand computing became economically viable as a business model. The financial value proposition to the end user could be realized at a substantial profit to the supplier.

Of course there are many more technologies that were needed, and continue to be needed, but these are enhancers, in my view, not necessarily enablers. Storage virtualization, management paradigms, security, secure multitenancy, etc. are all critical technologies, but they allow differentiation, value creation, and cost optimization. While their impact is partly economic, they enhance, not enable the business model.

Your comments welcome.

Jim

Chatter!!

Chatter is a new way for people to communicate in the company. It is considered Salesforce.com’s collaboration cloud. It allows an individual the opportunity to follow anyone in the company on any project. Everything is in one place, Chatter has the same collaboration features on Facebook or Twitter combined with the sharing and security rules of Salesforce. One of the coolest things about Chatter is the filters, you can follow just your team or you can follow your largest account, it is your call. Twitter is also integrated into this tool, when relevant accounts or topics get mentioned on Twitter it goes into the Chatter feed. Preview and comment on a newly posted project plan directly in the feed. It also allows you to follow back end applications such as HR. Custom apps that are developed on the force.com platform will update automatically to a live feed that filters into Chatter. You can follow everything that goes on inside of the company making sure no one is left out of the loop. With the force.com platform, you can track any data you want, such as orders, discounts, references, competitors... anything. This CRM app reflects your business in a real time feed which, allows developers using force.com to build a social app with just a few mouse clicks. Of course Chatter works with your iPhone and Blacberry. Real time insights that lead to better decisions that is what Chatter stands for!!

Interview with David Skyberg

On 3-30-2010 I talked with David Skyberg an alum of the CSIX Cloud Computing SIG. He is a technical product manager for Ping Identity. His job is to seek out what the market needs and where the market is going. He then delivers his ideas to the engineers that create the product for Ping Identity customers. Ping Idenity has over 125 SaaS customers and Federated Identity is his business. Federated Identity, in a non technical description, allows you to make a reservation for a flight and that same check in (Identity scan) would allow you to make a reservation for a hotel, allowing you to surf the internet with one ID scan. What Dave loves most about the position Ping Identity has in the Cloud is that it makes it viable and accessible. He mentioned to look out for SAML claims based integration of authorization and authentication of Federated Identity. He also mentioned claims based authentication by Microsoft leveraging WCF and WIF smart clients Integration with AZURE. One thing he expects to change is the adoption or migration away from OPENID. A big thanks to David Skyberg for making room in his busy schedule to participate in a short interview, CSIX Cloud Computing SIG wishes him the best at Ping Identity.

Cloud as Disruptive Technology

In 2008, Gartner identified Cloud Computing as one of top 10 most disruptive innovations through 2012. http://www.gartner.com/it/page.jsp?id=681107. In 2010, the prediction seems reasonable, and it may be possible at this point to suggest some of the winners and losers that may be created by the increasing adoption of Cloud Computing. While there is still a lot of water upstream of the bridge, let's consider a few examples:

Clear winners: Storage companies. The demand for storage, both in internal and external clouds continues to grow at a breakneck pace. Companies that supply storage arrays, and the software to provision, manage and protect the data they contain, should thrive in the Cloud.

SaaS Providers. As one of the enabling technologies in the Cloud, the companies who have mastered this approach will reap the benefits as demand for both custom and standardizes apps grows.

Managed Service Providers: Many former VARS are morphing into this type of service provider, and the value proposition for the SMB is real and compelling. A major shakeout is probably in the offing, but there will be a number of clear winners.

This is just a start - Virtualization providers, networking providers, and green technologies are also likely beneficiaries of the Cloud. What do you thnk?

Probable Losers: White Box Suppliers: The predominant paradigm has moved to virtualized blades for datacenter and cloud supplier. The concentration of demand - focused in larger datacenters and in the cloud suppliers themselves will likely move demand to the largest players in this market - the clone wars may be over.

Traditional hardware distributors: These players have adapted to changing conditions over many tech cycles and will need to do so again. Professional services and online software need to occupy their offerings.

System admins: One of the mantras of virtualization and SaaS is the reduced need for administrative resources. Going forward, there will be lower demand for the traditional sysadmin, although other skillsets may provide career options.

This is just a first look - please add your ideas.

A Snapshot of the Internet Marketing Industry

After attending SMX (Search Marketing Expo) West, it inspired me to delve further into the Internet Marketing Industry and this is what I have so far. In 2008 the Internet Marketing Industry was valued at $23.4 billion, according to engineworks.com. It is clear that the industry is growing and Google is proof of that. Larry Page and Sergey Brin share the number 11 spot on the Forbes 400 richest Americans list. Google AdWords brings in 97% of Google’s revenue, according to organicspam.com. Let’s take a closer look into their PPC madness. Google AdWords is a text based advertising strategy that is easily integrated into site search results, mobile webpages, feeds, videos, online games, and TV inventory. It has also found its way into social gaming sites such as Zynga, Playfish, and grab.com.

What does this mean? This gives companies the ability to target their advertising to the places customers live on the web, pretty exciting stuff. http://bit.ly/thegoogleeconomy According to this blog post Google has the clear majority of market share at 81%. As long as Google has 81% of the market they can taylor their Google AdWords revenue based on how much they promised they were going to report to Wall Street.

Yahoo! converted their company Overature to Yahoo! Search Marketing (SM), which as of right now doesn’t stand a chance to Google. Now for my thought, since I am not using these techniques or in the Industry for that matter, I see Google being the clear winner. Google Adwords is very well known and it is easy to start an account.

Marketing and the Cloud – II Using Social Media

Using social media as a marketing tool is growing rapidly in virtually all segments of the market today. Marketing teams dream of coming up with a strategy to engage large numbers of potential customers with compelling messaging – the YouTube video that “goes viral”; the Twitter superstar who attracts an instant following; or a Facebook page that creates “fan-demonium”. If you are looking for the magic formula here, please move on to the next post. However, I do think that there are three principles that are emerging, that, not surprisingly, echo some of the key learning from internet marketing, and even from good old-fashioned direct marketing, and that make success more likely.

First, let’s be clear. Social media marketing is not “free”, nor is it “easy”. The basic tenets of marketing still apply. Know your audience. Know what you want to say to them. Know what you want your audience to do next. And know what you want to do next. That said, here are three things to consider.

1) Content is king. What you say is important. If what you say is important to your audience, they will follow along. If it looks like a commercial, they will skip it. So, it is critical to create interesting, relevant, and timely content. The goal is to get potential customers to hear your message.

2) Follow-through is the name of the game. Most marketing teams know what to do with someone who responds to an ad, offer, or invitation. Social media contacts are no less important. Deciding how to reinforce the messages that attract fans and followers is one thing. But keeping the interest of the fans and followers is a time-intensive and thought-intensive process. Let them drift away at your peril.

3) Fans and followers don’t just happen. And, they are not permanent. From a business perspective, they follow because there’s something of value for them. Attracting them takes time, as does finding the right content to keep them around. Once you start the process, the worst thing you can do is let it get stale.

As always, comments are welcome, encouraged, solicited, and hoped for.

Shedding Light on the Cloud Phenomenon

The last few years in the technology sector have been in a perfect storm based on a weak economy, high unemployment and Cloud Computing. That’s right, Cloud Computing! Many business leaders concerned with the bottom line have been looking at the various aspects of Cloud Computing as a way to reduce headcount and therefore fattening the bottom line.

Cloud Computing in its various forms like Software as a Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) can reduce costs normally associated with setting up a company’s technology infrastructure base. The key area the business executives immediately draw attention too is the reduction or elimination of IT personnel and the associated savings saved by not investing in servers.
It is true, putting key services in the cloud can have an impact on head count but you will pay subscription fees for every service you sign up for. We’ll come back to subscription fees shortly. An area most companies forget to address as they move more services to the cloud or bring on additional staff is in the actual technology infrastructure needed to get everyone out to the cloud provider(s)! That’s right, we’re talking bandwidth, switching and routing. Go cheap on equipment and bandwidth you choke productivity and create problems you hadn’t expected.

Back to the cost savings by reducing headcount, licenses are less expensive than personnel but there is a breakeven point and it’s not the typical support person salary vs. licensed seats. The breakeven point will occur when your business needs to make a change and the current subscription/Service Level Agreement does not cover changes you want/need to make to your business. This becomes very evident when you have several different SaaS applications from different venders and you need to move data and/or expand a key application or add something else to your cloud infrastructure.

Cloud based computing can save dollars via headcount but has associated costs to purchase, maintain, expand and change and access. Understand that the cloud computing arena is still very young and still changing. In my opinion the market has not seen major fallout from merger and acquisition and the usual consolidation that has traditionally occurred in the technology sector.

So what does all this cloud stuff mean to the business owner or CEO? It means you can reduce or eliminate headcount but you will still have operational expenses that will need to be adjusted over time. The cloud is a good thing but seek out an expert if you don’t have one on site to help you navigate through the fiction so you don’t get rained on under your cloud.

By Ted Franklin