Tag Archives: cloud computing

Betting on Legacy Distribtuion Strategy for Cloud Future

Throughout the 1990’s Michael Dell was the poster child for IT Channel disintermediation.  His ‘direct’ sales model took the industry by storm.  Leveraging logistical efficiency and a ‘no middle man’ mantra were hallmarks of Dell’s strategy.  Interestingly though, Dell has in recent years given the entire model a rethink.  Nowadays, Dell sells heavily through the channel.

Pioneering giants of cloud computing looked very much like 1990’s Dell in the early days.  And, just like Dell, companies like Rackspace and Google are starting to realize that the Channel plays an important role in the IT service supply chain and broader ecosystem – a horn I have been blowing for years.

The realization of the Channel’s importance to sustained market success creates a rather interesting opportunity for IT channel distribution.  Distribution represents large-scale buying power and market coverage to aggregate the MSP and VAR communities on behalf of vendors.  Leveraging scale efficiency to sell large volumes on thin margins and a better logistical framework than any of the manufacturers allowed distribution to create an important niche for itself during the client/server era of computing.

The emergence of the cloud era represents a fascinating paradox for distribution.  It is not a business delivered through supply chain EDI, warehouses and net 30-day terms.  The cloud is a virtual technology product of sorts.

Companies like Ingram Micro have been very vocal about the channel and the cloud revolution.  But to date I would consider the effort, shall we say, lacking inspiration.

Why?

Because like most big companies in our market that can sense the disruption and fear obsolescence, they revert to what they know.  In the case of IT distribution, what they know is Product Line Cards.  PLC’s basically amount to glossy placards that list the names, descriptions and manufacturers of products they sell.

In essence, early adopters in distribution, like Ingram, have lined up some heavy hitters and they are trying to promote those brands the way they would promote printers, computers and peripherals.    Sure, they put it all under a new division and they wrap some captive managed services in there.  But isn’t that really just a pretty dress on the bearded lady (no offence to ladies with beards intended)?

The line card strategy is fatally flawed because it misfires on what is a volume business model (cloud) with what is needed to exact a volume play (access to markets).

So if the handy line card plays won’t cut it, what exactly is needed to realize the riches for Distribution?   That is a complex question that won’t get answered here.  But I can share some thoughts based on what I know about cloud and the IT service market:

1)   Standardized Skills

The cloud is a nascent and immature world where skillful market execution is extremely hard to produce and the skills to do it are even harder to find. Cloud is missing the underlying foundation of training and certification (think A+, CCNA, MCSE type programs), which buttress efforts to make meaningful market penetration in the IT service business.   Until that happens distribution needs to KISS (Keep It Simple Stupid).   Distribution needs to cast as wide a net as possible without overwhelming the VAR community with scores of technologies for which training is embryonic at best.

2)   Technological Abstraction

Winning at the distribution layer in the supply chain means recognizing what you truly need in order to capture the foundation of a nascent market.   I’ve blogged about this subject before, but what it comes down to is making complex technology simpler to consume.  Giving me brochures for a bunch of cloud vendors is a useful visual, but that’s about it.  Show me how I can reduce vendor sprawl, universalize my customer SLA, and expand markets with as little capital and effort as possible.  That would really raise some eyebrows.

3)   Integration & Interoperability

The cloud is not about selling product silos to your customer base.  That is so 1995.  The cloud is about selling the bridge between legacy IT and the future of IT delivery.  In order to do that you must have tangible and meaningfully integrated solutions that solve real problems for the partners who sell them and the customers that buy them.  I liken the cloud today to what the Remote Monitoring and Management software vendors went through during the early MSP days.  Selling RM&M product is nowhere near as powerful for the VAR partner and meaningful to the customer as selling an IT management solution in an MSP fashion.

All of this makes the early adopters in distribution at risk of either being too early (the market may be ready for line card distribution five years from now) or too late (they are now pot committed just like in a good game of poker and can’t turn back).

Either way, the field of opportunity for distribution is still anyone’s game at this point.  There is a lot of market to be had for the company that steps up with the right model to truly leverage the power of the IT service channel.

6 Things I Think I Think for IaaS in 2011

I love this time of year because it is one of those rare occasions during the corporate and product development process where creative ideas and concepts designed to stimulate future success enter the entrepreneurial blood stream.  It is that rare moment where you have the benefit of an entire year of business fresh in your mind to build upon and an entire new year ahead of you to set new standards and push the envelope of success. 

For our company and for the industry, 2010 was a huge year.   We completed our Series A round of venture financing, relocated the company to the coveted North Carolina State University’s Centennial Campus and tripled the size of our team.  Meanwhile, the industry took meaningful steps toward maturity as mainstream private sector businesses and governments of all shapes and sizes began giving IaaS a very serious look.   If 2010 was the year of formal organization, 2011 will be the year of some serious and meaningful growth.  Not just for our company and our technology, but for the IaaS market as a whole.

In a post I wrote recently I did my best to explain some of the core characteristics that would be central to IaaS achieving mass adoption as the technology revolution marches forward.  While I think it’s very difficult for anyone to offer up accurate predictions for the year ahead of any fledgling market, there are some specific ‘themes’ that I think, as we look back a year from now, will have clearly emerged as bell weather trends in the industry.

To borrow a format from Peter King, one of my favorite sports writers, here are the six things (6 things, 6fusion, get it?) I think I think (for the cloud biz in 2011):

  1. Hybridization Will Prove Critical to Enterprise Adoption.  I’ve been to the edge and back and I have a few words of wisdom to share with my peers about the Enterprise cloud.  Unless what you are doing bridges a gap between what exists inside the four walls of the enterprise data center and what might safely and securely exist outside of those four walls you are just another GUI in the Red Ocean peddling the same wares we’ve seen for years.  Hybridization is something enterprise buyers will use to separate the crème from the crop in 2011.
  2. Regional Clouds Unite.  The arms race among regional managed hosting providers to beef up for cloud services was evident in 2010.  But the silo approach to building up IaaS on a regional basis will prove difficult if not impossible to compete on scale – and it won’t take long to figure this out.  In 2011 expect to see the concept of broad-based IaaS federation become a much more prominent theme as owners of regional facilities and compute partner to create scale and increase market size in the quest to truly monetize their resources and compete with the national players.
  3. The Ecosystem is Bigger Than the Organism.  The IaaS industry is beginning to realize that the creation and quantification of IaaS demand is much more important than the creation of supply.  Its one thing to have the capability to power or enable the creation of IaaS resources, but it is entirely another to drive revenue and margin to the cloud.   The emergence of business ecosystems will be a consistent theme for the coming year because partnering is the key to success in a nascent market.  In 2011 you will see more and more eyebrow-raising deals announced based on ‘synergistic’ partnerships – partnerships that drive mutual revenue and margin between companies that are bound by the common interest of leveraging, distributing and powering IaaS.
  4. It’s All About the Channel.  Building a global business tackling one end-user customer at a time doesn’t scale if your business is supposed to compete with the market pioneers.  In order to generate a serious outbound push to globalize IaaS the cost of business acquisition will be too high for almost every player.  In 2011 IaaS vendors will wake up to the fact that they need help in order to scale revenues and ultimately generate the ROI they are promising shareholders.  Queue the channel gold rush.
  5. Communities Will Emerge.  I subscribe to the notion that one day every business in every vertical will consume a form of public cloud – but we are not anywhere close to this reality.  Large scale IaaS operated by a trusted third party and made available to a select group of common-interested stakeholders is a concept that has legs.  Trust me on this one.  Building out community clouds will emerge in 2011 as one of, if not the most important, concepts to help accelerate IaaS adoption. 
  6. A Course Will Be Charted for an IaaS Futures Market.  If you don’t subscribe to the notion that the final destination for this ride is a commodity exchange for compute, stop and take a look around.  Spot markets emerged in 2010, much to the surprise of many industry pundits.  But spot markets, as novel as they are, do not a true market make.  The real money and the real opportunity are in futures trading.  There are forces at work on this as I type away, and although you won’t actually see compute on a major exchange in 2011, do expect to see this theme to creep it’s way into mainstream IaaS thinking.

Ok, so with the predictions for themes and threads out of the way, I’ll conclude this post with the 6 things I’ll be watching closer than my wallet at a pick-pocket’s convention as 2011 progresses:

  1. Shifting Big Iron:  Companies like HP and IBM have yet to emerge with serious IaaS plays and if you read the tea leaves they won’t any time soon.  I’ll be watching to see if any of the whales in the pool make a splash in the IaaS business.
  2. Processor Plays:  Intel made huge moves in the cloud in 2011 and you don’t need your tarot cards out to see where they are going.  Anyone know what AMD is thinking these days?  I’ll be watching to see if this gentle giant makes any moves that can rival thier kool-aid-drinking-all-in-pot-committed competitor.
  3. Government Clouds:  The GSA announced a major IaaS initiative announcing a schedule of vendors that could be purchased from their schedule.  But will these IaaS vendors truly make any money this way?  I’m not so sure.  My personal opinion is that the money is at a different level of the Public Sector.  Can’t wait to see!
  4. Hypervisor Competition:  KVM is rocketing up the relevance chart.  No doubt.  I’ll be watching to see how VMware plans to keep it’s toe-hold on the hypervisor market as IaaS enablement begins to drive more and more purchasing decisions.
  5. Network Providers:  The accelerated adoption of cloud services will put a big piece of the pie squarely in the hands of the network operators.  I will be watching to see how Network operators jockey to position themselves.  I don’t think it is a foregone conclusion that operators will follow the lead of companies like BT and DT.
  6. Disclosure Watch:  As more and more private sector orgs make the move to the cloud, the greater the potential that something somewhere is going to go wrong.  I will be keeping a watchful eye on key disclosures and cloud failures which could dramatically stunt the industry’s pace of growth.

6fusion’s first webinar of our 2011 series called: “Make your 2011 New Year’s cloud Resolution Now”. I’ll be elaborating on some of these points and drilling down into how service providers can drive new business to kick the session off. Come join the discussion!

PR: Meridian Global Fund Services Moves to 6fusion iNode Network

New York, Hamilton Bermuda – December 13, 2010 – Meridian Global Fund Services Group, a leading fund administrator, is pleased to announce that it has implemented a managed hosting solution which moves their core IT infrastructure and data into a secure cloud environment.

Meridian has partnered with 6fusion, a leading cloud hosting provider who has developed a consumption-based billing model allowing hosted infrastructure to be billed as a utility through their solution partner network; and Ignition, an international IT managed services provider. 6fusion developed the managed hosting and consumption metering platform for Meridian while Ignition acted as the IT consultant in the set up process and will provide ongoing resources as needed.

“This initiative has significantly improved our scalability as a global fund administrator and has solidified our disaster recovery solution,” said Eric Smith, Senior Vice President of Information Technology at Meridian Global Fund Services. “We now have the capacity to manage our data needs and realize value from improved performance, improved reliability and lowered cost.”

”We are very excited about the strategic partnership with Meridian Global Fund Services,” said Rob Bissett, Vice President, Product Management at 6fusion. “Through 6fusion, Meridian is leveraging a distributed data network that provides  access to significant resources and the ability for virtual unlimited scalability and growth. Our utility metered model contributed to Meridian migrating to the cloud.” The 6fusion data centre is a state-of-the art secure facility with SAS 70 Certification.

“We look forward to supporting Meridian’s migration in Bermuda with a 24/7 help desk, quality assurance, managed services, and proactive network monitoring,” said Michael W. Branco, Senior Vice President, The Ignition Group of Technology Companies. ”Meridian has stepped ahead of its competitors by choosing a hosted infrastructure solution and managed IT services allowing them to concentrate on the core competencies of fund administration rather than managing their own day to day IT.” Ignition supports 5,000 plus users in 32 countries.

PR: New Kids on Campus – 6fusion Partners with NC State University

Raleigh, NC – November 11, 2010 – 6fusion, a company that has developed a system to take control of third party computing resources and create a single utility to meet the needs of the IT Service channel, is the latest company to become a partner on NC State University’s Centennial Campus.

The company is occupying space in the Venture IV building on the research park and technology campus.

“We are delighted to have 6fusion on campus,” said Dennis Kekas, associate vice chancellor of the Centennial Partnership office. “With its background in cloud computing and our research in that area, we think they are an ideal partner going forward.”

6fusion has developed an algorithm that radically simplifies the metering, consumption and billing of compute resources, called the Workload Allocation Cube (WAC). The company also has developed a platform called UC6, which provides a single pane-of-glass user interface for customers to dynamically provision cloud workloads internal or external to their organization.

“We spent a considerable amount of time with the team at Centennial Campus after we completed our relocation to the Research Triangle,” said John Cowan, CEO of 6fusion. “Centennial Campus is not only an exciting, intellectually stimulating place to locate an entrepreneurial venture – it’s also a unique venue that allows us to partner on research and development facilities in a campus atmosphere that is more than just office space.”

6fusion makes iNode computing power available exclusively through IT service providers, independent software vendors and managed service providers. The company uses iNodes to build and launch ‘cloud’ based services to its user communities and customers worldwide. The company bridges the gap between supply and demand of utility computing resources with the company’s software technology called UC6. UC6 is a single console that handles all of the metering and billing of the “infrastructure” and deployment and control of customer “applications.”

In addition to the corporate relocation, 6fusion has also partnered with NC State’s Institute for Next Generation IT Systems (ITng) to develop collaborative research initiatives. ITng is also located on Centennial Campus.

“ITng is a perfect fit for 6fusion’s long term R&D program,” said 6fusion co-founder and CTO Delano Seymour.

PR: 6fusion Launches Utility Computing Node in Canada

Global utility computing enabler 6fusion has partnered with e-ternity Business Continuity Consultants Inc. (e-ternity), to deliver its innovative cloud computing platform and cloud ecosystem for the first time in Canada. 6fusion provide s IT Service Providers (ITSP), Independent Software Vendors and enterprise customers with the ability to access computing resources on-demand in order to “cloud-enable” software applications. The 6fusion ecosystem includes data centers in Canada, the United States, and the Caribbean, and boasts numerous cloud enabled applications that ITSP and enterprise customers can access today. e-ternity, is a Mississauga, Ontario based organization with deep expertise in Business Continuity and Disaster Recovery that provides technology and cloud based solutions that guarantee business continuance to customers in Canada.

6fusion’s software platform, called UC6, takes control of virtualized hardware in the data center and converts it into a compute utility. UC6 leverages 6fusion’s unique, patent-pending algorithm called a Workload Allocation Cube (WAC), which creates a single unit of measurement for metering and billing computing consumption for any software application running on any hardware platform. “The WAC succeeds where other utility computing, cloud computing and managed hosting systems fail.” said 6fusion CTO Delano Seymour. “Paying for compute resources using the WAC is like paying for electricity by the kilowatt hour,” he added. “You have a simple consumption metric and you only pay for what you actually use.”

Under the terms of the partnership, e-ternity will provide the technology infrastructure layer and associated management to support the 6fusion infrastructure node. “The 6fusion offering represents an enormous opportunity for customers in Canada in 2010 and beyond,” said Michael Aaron, e-ternity’s Managing Director of Sales. “We are bringing together some of the most advanced cloud computing technology and respected IT service faculties in the region in order to create a truly unique offering, one that we personally intend to utilize for our rapidly growing business continuity/disaster recovery service,” he added.

The Infrastructure Node will be housed in a fully redundant Tier III data center. The facility provides guaranteed service levels, scalability, and is specifically designed to mitigate the risk of service disruption. The data center is also PCI DSS, SAS70 and CICA 5970 (Type II) audited, ensuring the highest operating levels within the industry.

The 6fusion model enables organizations to access its suite of cloud enabled applications or to move internal applications from in-house IT environment to the ‘cloud’, and access these applications over the internet or private networks in a pure utility pay-as-you-go model. “e-ternity is a highly regarded organization run by proven winners. We are excited to be working with their team to bring new cloud services to the Canadian marketplace,” said Doug Steele, 6fusion’s Director of Partner Development.

Greg Onoprijenko, e-ternity’s Managing Director of Business Strategy, is bullish about the market potential in Canada. According to Onoprijenko, “the attraction to store, access, and process information in the ‘cloud’ is very appealing to many businesses for different reasons, but the one question that persists is whether the cloud is ‘enterprise ready’?’. Clients looking at the 6fusion e-ternity partnership will rest assured that the answer to the question is yes.

Customers and service providers eager to test drive the new cloud platform are invited to visit http://www.6fusion.com or email info(at)6fusion(dot)com or info(at)e-ternity(dot)ca.

Cisco ROI Tool Doesn’t Really Help the IaaS Shopper

So Cisco just released it new flashy ROI calculator for cloud service providers looking to buy kit and get into the game. Check it out here:  http://www.cisco.com/assets/sol/sp/iaas/flash/roi_calculator/index.html

While the movement to create easy to use tools to help simplify purchasing decisions should be applauded, Cisco’s online tool doesn’t really help the customer out. Here’s why:

  • Comparing Cisco with other vendors just multiplied the volume of evaluation work necessary to actually make a decision – this of course goes against the assumption by Cisco that anyone would even entertain another vendor!
  • There is no way to bench mark ROI performance per compute resource and drill down into bloated cost centers.
  • There is no way to address customers that use IaaS in anomalistic usage patterns. What happens to my ROI if I have a handful of I/O hogs that drown out others?
  • The tool makes the assumption that IaaS must be delivered the way Cisco sees it, which removes most of the wiggle room to create customized services

The Cisco tool highlights the problem when big iron vendors operate in a vacuum, which only underscores why raw material supply in the cloud business must be abstracted entirely from service delivery. I don’t doubt that Cisco has a great infrastructure product set – but what would truly be useful is a system that allows the buyer to really compare apples to apples and make a purchase decision on true ROI analysis.

ConnectWise Outage a Cautionary Tale for Channel

For folks living in the IT Channel world it was impossible to miss the headline-grabbing news about the big ConnectWise cloud failure late last month.  I have only very limited knowledge of the outage itself from a handful of upset customers and unfortunately the various pundits and reporters that covered the story painted very sketchy details at best.  Having said that, what really matters is that a significant number of IT Service Providers lost access to their mission critical operations application for an extended period.   For the uninitiated, ConnectWise provides an integrated service management, CRM and billing platform for IT service providers.  For the IT Service Providers that use ConnectWise, the business of IT service can’t function without it.  It’s a very important business process automation tool for the operation of a managed service practice.

As I sat back and watched the carnage and horrors unfold for ConnectWise my first thoughts were thoughts of sympathy.  As a company whose services are depended upon for mission critical functions this kind of thing is your worst nightmare.  There is a misconception out there that because something is running in a cloud environment that it is impervious to failure.  I have no idea where this crap originates, but it is exactly that. Crap.  Maybe it’s the marketing rhetoric.  Maybe the hype-cycle is to blame.  I don’t really know.  But what I do know is that outages DO happen, even to the best of us.  So ConnectWise, if you are reading this post – don’t sweat it.  This too shall pass.

Having made that point, the ConnectWise outage does represent a cautionary tale for any Channel service provider:  If you depend on your software vendor to make decisions about hardware infrastructure with zero transparency, you should be comfortable getting whatever you get. Good or bad.  Up or down.  It’s that simple.

This is the problem I have had with the whole SaaS phenomenon since it started to really heat up a few years ago.  Hardware infrastructure is REALLY important to the sustainability of your hosted software.  I don’t care whether your application is used by the CIA, NASA or both.  If you operate that application from inferior infrastructure or after-thought laden infrastructure designs, you are asking for big trouble.

When we ran our MSP practice in the pre-6fusion days we adopted a policy whereby if we could not see into the hardware design and build specs behind a hosted app, it was a show-stopper to doing business with that vendor.  This policy served us extremely well not because we never had any problems our outages.  But rather, when there was an issue we had complete control and understanding of the issue.  This is CRITICAL in managing any IT, internal or external.  What you avoid when you have transparency and control is the type of bedlam that ensued when ConnectWise failed.   Imagine 100 plus IT service providers with hundreds of end user clients all sitting in the dark with NO IDEA what was really happening.  As a cloud service enabler, I shudder at the thought.

This might sound like obvious advice, but the seduction of cheap SaaS pricing is a powerful lure even for the most stringent of service providers.   The market is rife with SaaS peddlers boasting ‘infinite scalability and zero downtime’ as a marketing ploy and that is BAD for everyone in the cloud business in general.   So whether you are an IT Service Provider or an ISV, here are few key pointers if you are considering either running mission critical back office or web applications that use a form of cloud computing infrastructure (or someone’s boxes co-located somewhere):

1)      Ask the vendor to disclose exactly where your data is being stored

2)      Request copies of the service providers’ SAS70 audit summaries to confirm process controls at the data center

  1. If there are no SAS70 reports available, request guest access to the data center to see for yourself

3)      Ask for an asset audit report to affirm hardware configurations and designs

4)      Ask for a detailed outage report for the past 12 month history of the service.

5)      Get your lawyer to vet the SLA and limitation of liability clauses in the contract.

  1. If no SLA is provided, you shouldn’t be talking to that vendor!!
  2. Not all L of L clauses are created equal.  Make sure the L of L doesn’t complete gut the SLA.
  3. Make sure the service provider INCLUDES data center network considerations as part of that SLA

If your ‘spidey sense’ is tingling when exploring any one of these points with your prospective SaaS vendor, use your instincts.  Back away!!

I think the lack of control over cloud infrastructure in typical SaaS models also highlights yet again a point I made in a blog post last June about the role of the Channel in cloud computing and the importance of why cloud vendors like 6fusion have a clear demarcation point at the infrastructure level.  I’ll spare you having to go back to sift through that soap-box-like post.  Here is what I wrote then:

We resisted the temptation to become an apps vendor because we are not the ones that should be deciding what apps to run and where to run them. We simply provide the cloud infrastructure and tools to help you build what YOUR customers want and need to integrate with how they run their businesses today.”

I can tell you ConnectWise customers that run that software on our cloud infrastructure certainly have never experienced the type of outage that ConnectWise suffered (present company included!).  But that is not the point.  The point is transparency and control between software and hardware infrastructure, which is, in my humble opinion, too valuable a component to give up when you go with a multi-tenant software solution (SaaS) for mission critical apps (that hasn’t been thoroughly vetted).  I can’t speak for other IaaS types in the market, but 6fusion shares the hardware design specs, security measures and governance documentation with IT service provider and ISV clients and they have a very clearly documented SLA.   Since we wouldn’t subscribe to anything less we think it’s important that our customers don’t either.

But what is even more important is that users have control over their cloud workloads, from creation to resource allocation to a common reboot.  Control means that standard troubleshooting protocols apply and insight into software and hardware failures can be identified and managed more effectively.  I think as cloud becomes more ‘mainstream’ this type of ‘cloud control’ will become requisite for all service providers in the space.  But until then it is up to IT Service Providers and ISVs to do their risk homework when deciding whether or not SaaS is an acceptable risk model for their customers, and their own, internal operations.