Gaining Altitude In The Cloud Archives - Page 5 Of 12

PaaS, IaaS and SaaS Providers…Moving Up and Down the Cloud Stack | Gaining Altitude in the Cloud

January 2, 2013

As the market for cloud services expands, the providers at each level of the stack are realizing various opportunities beyond their core solutions. They are also realizing that scale is absolutely critical for the success of cloud services. As a result, they’re starting to enter each others’ domain. Let’s take a look.

Platform-as-a-Service (PaaS) Providers

Large PaaS providers such as Microsoft and Google are moving down the stack to create Infrastructure-as-a-Service (IaaS) offerings. This may indicate not only that standalone PaaS is a difficult business to scale but also that IaaS is required to create a broader cloud footprint and higher degree of acceptance, as evidenced by Amazon’s runaway success with AWS. At the current stage of cloud adoption, PaaS may appear to be too futuristic, and many organizations may be unwilling to bet on it for the long term. Therefore, it makes sense for PaaS providers to offer IaaS solutions to their clients.

Most PaaS providers, and their respective platforms – think CloudBees, dotCloud, Salesforce.com’s Force.com and Heroku, Google Apps Engine, IBM SmartCloud Application Services, Iron Foundry Web Fabric, LongJump, Microsoft Windows Azure, Morphlabs, OutSystems, RedHat OpenShift, and VMware CloudFoundry – have preferred programming languages, e.g., .Net for Microsoft Windows Azure, Java for CloudBees, Python for Google Apps, and Ruby for EngineYards. These preferences bind clients to a specific platform offering, as they believe that a PaaS solution typically works best with its preferred or native language. However, to scale their business and appeal to a broader set of application developers, these providers are beginning to widely support multiple programming technologies.

Infrastructure-as-a-Service (IaaS) Providers

IaaS providers are desperately claiming agnosticism in running any application on their infrastructure. They believe as their offerings are pure infrastructure, developers are free to choose any programming mechanism and build applications. However, they also realize that the developer community finds value in a PaaS solution as it reduces their burden of handling various time consuming, nitty-gritty application development tasks. Therefore, many IaaS providers are moving up the stack and creating PaaS solutions on top of their infrastructure offerings, in partnership with leading cloud platform providers such as Iron Foundry or LongJump.

Indeed, many cloud infrastructure players are also partnering with cloud database companies and calling themselves PaaS providers. They are unable to decide whether they truly want to embrace the cloud or just rehash their existing offerings and cloud-wash them with marketing buzz. Regardless, their attempts are to at least make some noise around IaaS, SaaS, and PaaS and position themselves as “integrated” cloud providers.

Software-as-a-Service (SaaS) Providers

Large SaaS providers, such as Salesforce.com and NetSuite, have created their own versions of PaaS, and Workday partnered with Force.com to offer customers a platform on which to customize its solution. These moves not only allow extension of these companies’ basic offerings and integration with other applications; they are smart strategies to convert clients to their platforms. Therefore, these PaaS solutions end up being the “relationship builder” between a technology provider and the client.

Clearly, IaaS providers are realizing that cloud infrastructure is a low-profit, commoditized business and that they must move up the value chain. PaaS providers understand that they need to scale their offerings and that may require them to enter the IaaS market either organically or through partnerships. And SaaS players are already creating PaaS solutions to provide value added services.

The reality is…not all cloud service providers will be able to endure, and many will get consolidated or go belly up. The survivors, who aspire to be big, will be those that offer services across different cloud layers, either through in-house offerings or partnerships.

Why the Traditional Infrastructure Outsourcing Market Is about to Shrink Dramatically | Gaining Altitude in the Cloud

December 18, 2012

For those of us who are industry observers, it is not a secret that the traditional Infrastructure Outsourcing (IO) market has stopped growing and is currently contracting at a rate of 2 percent a year.

The secular trends driving this contraction are numerous and include client frustration with the contracting model, lack of flexibility, poor customer/provider alignment, and alternative sourcing options such as in-house, co-location and remote infrastructure management outsourcing (RIMO). All of these alternative options present increased flexibility and often more attractive economics.

However, the reason that this market deceleration and consequent contraction has been so slow is that once a client has entered into a significant IO contract it is very hard to move away from the model. It is possible to switch service providers but very difficult to rebuild in-house managed capacity. As a result, we note that the traditional IO market place is dominated by re-competes with few new logos entering the market.

Nevertheless, this stable market may be about to change in a big way. To understand why, we only need to look at the nature of the workloads that are running in these IO environments. Over the course of the last year, we have taken a close look at these workloads and have determined that between 40-50 percent of the workloads currently hosted via these contracts do not have the security requirements or the mission criticality that prevents them from being migrated to less expensive cloud environments. We estimate that savings can approach 20-40 percent, depending on the workload distribution and the volumes involved, particularly when these workloads are migrated to a pay-as-you-go environment such as those available from public cloud platforms such as Amazon or Rackspace.

To better understand the viability of this happening, let’s look at the use case of Application Test and Development. Test and Development environments are not subject to the same performance, security or compliance requirements of production workloads. They are, in fact, excellent candidates to be operated in less expensive but more flexible environments. There is little reason for customers to look at these workloads in the same light as production workloads or for the same cost and delivery constructs to be applied.

When you dig further into existing IO contracts you find that many of these customers are operating well above their contracted minimum volumes thus allowing them to shift these workloads without fear of having to renegotiate contracts or pay early termination fees. When you consider that test and development alone often take up 25-35 percent of the capacity in the traditional IO environment it becomes clear that it is only a matter of time before customers move to shift these workloads and move from these low-hanging fruit to other workloads that exhibit similar favorable characteristics.

We have researched what conditions are necessary to allow a traditional IO client to move down this path. It appears that three key conditions need to be met.

A vision or understanding by the customer that savings are possible, large and attainable.
Orchestration tools that allow the client to organize, manage and coordinate. These tools have recently come on the market with several strong case studies to demonstrate their success. What makes the business case compelling is that it is entirely possible for customers to “test” the cloud model by moving incremental workloads without investing in such tools though a larger scale of transformation would require such investments.
The willingness to invest the time and money to implement the program.

Given the strong ROI resulting from these initiatives it is likely that many if not all ITO customers will explore this option. Already, more than half of enterprise customers are actively migrating or considering migration of development and testing environments to the cloud, next only to email/collaboration and disaster recovery/archiving.

With significant portions of IO workloads vulnerable to this emerging threat it’s only logical to conclude that we will see this market contract sharply in the next few years.

Cloud and Outsourcing, an Alliance for a Newer Evolution | Gaining Altitude in the Cloud

November 27, 2012

Originally published on Global Services

In most cases, leveraging cloud delivery models, be it in application, infrastructure, or platforms, implies being served end-to-end by an external vendor unlike the typical “do-it-yourself” products. Therefore, in a way, the cloud is driving the IT consumption towards an “external vendor” model, which is also a type of outsourcing.

Most of the discussions around cloud’s impact on outsourcing services take a monolithic view of the industry. The focus is to take an extreme position, such as “outsourcing is dead”, or perform a very broad analysis based on the evolving role of CIOs, changing demand in enterprise IT, cloud eating into traditional sourcing, etc. This makes for good reading but is not necessarily a thoughtful analysis of the real impact. The need of the hour is to drill down into each type of global sourcing service and analyze the impact of cloud delivery models.

To analyze the impact of cloud delivery models on globally-sourced services, one needs to understand both of these in the right context. For IT outsourcing and the impact of cloud, there is a need to differentiate between the type of services delivered such as application development, application implementation, application maintenance, “keep the lights on” infrastructure services, service-level driven managed services, and transformational services. Cloud delivery models will have a spectrum and not a binary impact on this market. Different services, providers, business models, and investments will see different opportunities and challenges.

One major “non-technology” challenge from cloud models is the shifting of budgets from a typical IT department to businesses. Everest Group and Cloud Connect Enterprise Cloud Adoption Survey indicate an increasing role for business users in deciding IT spending. As outsourcing providers have access generally to IT and procurement departments, they will witness significant challenges to penetrate the business side of a buyer in accessing “business IT” budget. Moreover, enterprise IT shops that have so far not outsourced, may directly leverage a cloud service, reducing the potential role of an outsourcing provider. To pre-empt this, the provider may need to offer integrated cloud and outsourcing services.

The relevance of cloud models should also be seen from newer or existing investments the buyers make in enterprise IT. For transforming the existing investments (e.g., ERP, CRM, other business applications, and infrastructure) to the cloud, it is difficult to believe that typical global sourcing buyers will prefer any other vendor over the enterprise-class providers. For example, if they have to transform ERP platforms to a cloud infrastructure, they would generally prefer a renowned enterprise class ERP and cloud service provider over a pure-play cloud hosting provider.

Enterprise Cloud: Is Corporate IT Finally Getting Serious? | Gaining Altitude in the Cloud

November 14, 2012

One of the better indicators that corporate IT groups are starting to get serious about cloud is their growing interest in solutions that help them aggregate and manage multiple cloud services. Some call these solutions cloud services brokerage and management, and others term them cloud orchestration. While the market hasn’t yet converged on a common set of capabilities or definition, the broad category typically includes the following:

Service catalogs – “App Store”- like models that provide users access to internal IaaS and PaaS services and in some cases third-party SaaS apps and infrastructure services as well
Service provisioning – capabilities that support end-user requests, provisioning, and deployment of cloud services
Service integration – data integration services across multiple cloud services, including “cloud-to-cloud” and “cloud-to-ground” models
Chargeback and billing – consumption-based metering and billing of cloud services to internal users, including private services and aggregation of public cloud services spend
Service management – monitoring and management across multiple cloud services, including performance, capacity planning, workload management, and identity management
Sourcing – contracting and sourcing of cloud services across multiple platforms and providers

These solutions are being offered by a wide variety of players, including not only traditional enterprise systems management vendors – which in some cases are just repackaging SOA offerings – but also global systems integrators (SIs) and focused startups.

What’s important about this phenomenon?

First, corporate IT’s interest in these capabilities is, in a way, an implicit acknowledgement that:

Cloud services will be adopted in scale across enterprises
Multiple large scale services will need to be orchestrated and managed
Orchestrating these services will be hard and will require external third party solutions

This is a far different conversation than corporate IT was having a year ago at this time, which was primarily around what pilot or proof of concept to launch.

Second, interest in cloud orchestration is being “pulled” by corporate IT, rather than “pushed” by the business. A premise we recently heard is that business’ role in driving adoption of cloud is no different than it was in the packaged software era. Packaged software required servers, storage, and networks, all of which required IT management and support. This provided IT with long-term job security and the opportunity to “empire build.” As a result, corporate IT aggressively supported packaged software rollouts and implementations.

The difference in the cloud era is corporate IT’s attitude. To date, it largely perceived the cloud as a threat. But now, IT is discovering it can potentially regain a measure of relevance and control by adopting a service provider mindset, and service catalogs / chargeback models combined with private and public cloud services.

Is corporate IT finally finding a path to building its empire in the cloud? Are you or your IT group considering, or embarking upon, a cloud orchestration initiative? What thoughts and experiences do you have to share with your peers?

Why Next Gen CIOs Are Actively Promoting “Shadow IT” | Gaining Altitude in the Cloud

October 9, 2012

The conventional thinking about business-led adoption of cloud services in the enterprise goes something like this:

Frustrated by a non-responsive IT organization, business users become attracted to the innovation, speed, and flexibility offered by cloud vendors and solutions
Fearing loss of control, corporate IT puts the brakes on deployments and projects of which they become aware
Undaunted, business users “swipe the credit card and go” to the cloud anyway, around and outside of normal IT procurement processes
CIOs and IT executives are shocked to learn that cloud adoption is going on behind their backs

And while many enterprise IT departments frequently spew the terms “rogue IT,” “shadow IT,” and “end-running IT” at this phenomenon, progressive CIOs are actually encouraging this behavior as a way to gain leverage and scale with a limited IT budget.

CIOs have a finite set of time and resources to accomplish what is asked of their IT organizations. Many enterprises facing significant cost pressures and budget constraints must focus almost exclusively on supporting, maintaining, and enhancing core, mission critical systems. Think trading platforms for capital markets firms, or claims processing for insurance companies. IT can support only so many new projects requested by the business, and every CIO needs to draw the line somewhere on the project list.

For projects that fall below corporate IT’s project cut line, the cloud is a win-win proposition. Business stakeholders can go ahead and acquire from a third party the capabilities they are seeking. IT ends up with a happier internal customer. And the organization overall can effectively attain greater scale from its IT budget and headcount by pushing the business to cloud providers.

As one CIO recently commented to us, “I actually want our business users to go to the cloud. I want them to ask cloud vendors the right questions, and, of course, I want to make sure they’re not doing anything that touches our mission critical apps. But other than that, I’m happy for them to go out to get what they need.” Of course, one of the keys here is the right questions, such as those focused on critical topics including security, data ownership, integration, availability, disaster recovery/business continuity, etc.

There’s no doubt that many CIOs are surprised internal developers are using Amazon Web Services (AWS), or that marketing is building its own custom apps on salesforce.com. The more unanticipated but understandable fact is that many of them are actually relieved to have this extra weight lifted off their heavily-burdened shoulders.

Larry Ellison Bets on Oracle’s Organic Route to the Cloud, But How Are Buyers Evaluating the Cloud Capabilities of Their Service Providers? | Gaining Altitude in the Cloud

October 5, 2012

Last year when I wrote a blog on how AT&T was betting on its network legacy to win in the cloud, I dropped a hint as to how cloud was turning out to be a melting pot for service providers with disparate legacies.

In fact, all broad categories of service providers approached cloud in their own unique way. On one end of the spectrum were new-age service providers like Amazon Web Services, (AWS), which pushed ahead with its public cloud concept. On the other end, some traditional service providers simply brushed aside the hysteria associated with cloud. In that vein, quotes such as the following ensured that cloud got media coverage even outside technology space, inciting (ironically) even wider interest on this topic.

2008: Oracle’s Larry Ellison on cloud – “When is this idiocy going to stop?”

2010: HCL’s Vineet Nayar on cloud – “Cloud is Bullsh*t”

On Wednesday, when Larry Ellison explained that Oracle’s cloud strategy is focused internally on developing cloud solutions (and deviating from its usual acquisition strategy), the debate came full circle, demonstrating that service providers have indeed moved beyond rhetoric on cloud.

Cloud-based strategies (go-to-market, solutions, pricing models, IP, etc.) are in place and buyers are increasingly engaging service providers on cloud. For example, per service provider responses to a recent Everest Group survey, cloud-based services now constitute five to 15 percent of the scope of infrastructure deals being signed.

As a result, the time is now ripe to shift the discussion from cloud providers to cloud services buyers. As enterprises contemplate moving a larger share of their IT spend to the cloud, their efforts invariably focus on the following two considerations:

Evaluating the opportunity cost (total cost of ownership, or TCO) of cloud adoption
Evaluating the cloud capabilities of service providers

While TCO evaluation models are still maturing and are currently situation dependent, provider capabilities and standards have matured enough for buyers to benefit from research data.

Going back to my earlier comment on service providers with disparate legacies…following is how Everest Group’s IT outsourcing team depicts a sampling of the melting pot of cloud service providers:

IT buyers’ incremental approach to cloud adoption has led service providers to reinforce their legacies, and develop and/or acquire cloud solutions around them. Most of the cloud deals we have analyzed were existing service agreements wherein a cloud service component was introduced either as a value-add from the service provider or per a specific request from the buyer. Hence, as the above picture illustrates, all service providers are now in earnest trying to carve out their own niches in the cloud services market – through solutions, partnerships, technology, or asset ownership.

Based on our interactions with a wide range of buyers, it is clear that cloud will increasingly constitute up a major portion of large enterprise deals in the next five years. The following illustration summarizes those discussions:

Everest Group has embarked on an initiative to help buyers answer the above questions in order to assist them in achieving their overall sourcing goals.

Watch this space for more details on this new area of research.

5 Things We Learned At Cloud Connect | Gaining Altitude in the Cloud

September 26, 2012

Even though email, smart phones and iPads are great virtual communications devices, nothing beats the value you can gain from face-to-face time with your peers and other industry thought leaders. If you weren’t fortunate enough to attend the Cloud Connect conference in Chicago earlier this month, we’ve captured some of the highlights of and insights from the discussions during the Organizational Readiness track (which we were privileged to lead) for you:

Change management comes to the fore – executive sponsorship and early successes are keys success factors for driving cloud-enabled transformation. While “top-down” CIO-driven programs are helpful in shifting culture and mindset, “bottom-up” adoption and innovation is also required to demonstrate the value of cloud models to skeptics. In many cases, new cloud initiatives need to be incubated and protected from the enterprise to provide freedom for experimentation. This kernel of wisdom was a result of our very interactive session with Matt O’Keefe (Morningstar), Keith Shinn (Fidelity) and Dave Roberts (ServiceMesh) about the hard choices in enterprise cloud adoption. Watch Dave in this video for tips on ensuring a successful cloud deployment in.
“Shadow IT” isn’t a dirty phrase – corporate IT needs to focus its limited resources and time on the objectives and initiatives that are deemed to be highest priority. In many organizations this means focusing only on applications and infrastructure considered to be “mission-critical.” As an unfortunate result, many projects requested by the business fail to make the cut. Thus, it’s understandable if the business decides to “end-run” IT and go to the cloud. The cloud can give enterprises additional scale with limited IT budget and go deeper in the project stack. In fact, in many cases CIOs actually encourage their business counterparts to go to external cloud service providers. The key to success, however, according to Bates Turpen (formerly InterContinental Hotels Group) and David Falck (salesforce.com), is that IT leaders , help internal customers self-provision without losing control and help business users ask the “right” questions of potential cloud vendors.
Culture changes within IT – not only is cloud reshaping the relationship between business and IT, it’s also starting to restructure the IT organization itself. The dev ops revolution is shifting IT from a CIO-driven model to a developer-driven decision-making model around infrastructure. Developers are making their own frontline choices around platforms and service providers that are then being aggregated up by managers, a distinct break from legacy models where platforms and infrastructure are mandated by the CIO. Also, as user experience becomes an integral part of a product, CIOs need to encourage their developers to think like a user and empower them to build a product from beginning to end. Watch Lauren Cooney (Cisco) talk more about the dev ops movement.
Different clouds for different folks – common enterprise concerns around cloud continue to center around security, compliance, performance and vendor lock-in. We asked the experts on our “Current Thinking in Addressing Persistent Cloud Challenges” panel, Paul Burns (Neovise) and Troy Angrignon (Cloudscaling), how to best address these questions. Their answer was : “It depends” (which is a much better answer than the vendor community could deliver just a few years ago). Options across public and private, and enterprise virtualization and elastic infrastructure clouds, provide new answers to these issues for both legacy and new applications, but also must be carefully evaluated.
Adoption is about innovation – in conjunction with the Chicago conference, we conducted a joint survey with Cloud Connect on enterprise cloud adoption patterns. While most service providers think enterprises are migrating to the cloud for total cost of ownership (TCO) reasons, agility, innovation and flexibility are actually the drivers. Thus, there’s a glaringly apparent disconnect between vendors that are focused on selling next generation infrastructure to IT, and businesses that want cloud platforms to drive top line revenue. Download the complimentary survey results.

If you attended Cloud Connect, our readers would enjoy hearing what you took away from the conference sessions, as well as your concerns, issues and successes on cloud adoption within your enterprise, so feel free to share away!

Video: Lauren Cooney Explains Why Your Dev Team Just Became the CIO at Cloud Connect Chicago | Gaining Altitude in the Cloud

September 24, 2012

Lauren Cooney, Senior Director, Software Market & Developer Strategy at Cisco, explains the new cloud computing world order. The consumerization of IT is changing the CIO’s perspectives, and user experience is ascending as a top priority. Lauren talks about empowering the developers and create a better product and better user experience.

Follow Lauren on Twitter @lcooney.

Lauren was a speaker in the New World Order: Your Dev Team Just Became the CIO session — part of the Organizational Readiness track at Cloud Connect Chicago, which Everest Group’s Scott Bils chaired. For more Organizational Readiness resources, visit www.everestgrp.com/ccevent.

Video: Dave Roberts Talks about Enterprise Cloud Adoption at Cloud Connect Chicago 2012 | Gaining Altitude in the Cloud

September 21, 2012

Dave Roberts, SVP of Strategy and Evangelism at Service Mesh, talks about balancing an open and closed cloud infrastructure and provides tips on ensuring your cloud project succeed.

Follow Dave on Twitter @sandhillstrat.

Dave was a speaker in the Hard Choices in Enterprise Cloud Adoption session – part of the Organizational Readiness track at Cloud Connect Chicago, which Everest Group’s Scott Bils chaired. For more Organizational Readiness resources, visit www.everestgrp.com/ccevent.

Picture This: a 360° Visual Depiction of Current Cloud Adoption Trends | Gaining Altitude in the Cloud

September 5, 2012

Download the Enterprise Cloud Adoption Survey Results

We wrote in a blog last week about the top messages that emerged from the extensive enterprise cloud adoption survey we conducted earlier this year in partnership with Cloud Connect. To ensure we’ve “got the backs” of our readers who tend to be right-brained and thus more attuned to images and visual thinking, the following shows the key findings we reaped from the responses of the 346 buyers, providers and advisors who participated in the survey.

Enterprise Cloud Adoption Infographic — Click to expand

As you see:

Cloud adoption is expanding beyond “low hanging fruit” like email and custom applications to include disaster recovery, storage and archiving, and business intelligence and analytics to support Big Data initiatives
Buyers’ opinion of the Cloud is extremely positive, with highest satisfaction in ability to create flexible infrastructure, and they have exceptionally high expectations of future benefits
Enterprises are increasingly viewing Cloud as an enabler of top line growth, i.e., to reduce time to market for applications, solutions and products, yet providers continue to sell with a cost reduction value proposition

To gain more insights on these and other key findings, you can download the survey summary report, and/or join me at the Cloud Connect Chicago conference on September 12, when I’ll be discussing the survey results in detail. Use code EVERESTGRP to receive 25% off conference passes or claim a free expo pass. For now, up and away on the Cloud!

Announcing our inaugural conference: Everest Group Engage, The Pragmatic Edge: Designing Your Future. Learn more.

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