Tag Archives: wac

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: 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.

6fusion To Integrate UC6 Cloud Platform with ConnectWise PSA Business Operating System

Integration will help service providers manage their customer cloud systems more simply and easily by centralizing customer information and lower the cost of cloud systems support

Durham, North CarolinaNovember 3, 20106fusion, the leading provider of utility billed Infrastructure as a Service (IaaS) for the channel, today announced participation in the ConnectWise Developer Network program.  6fusion will deliver integration between the UC6 cloud platform and the ConnectWise PSA business operating system, offering service providers an integrated workflow and user experience.

The integration between UC6 and ConnectWise PSA will focus on providing integrated workflows and reducing duplication of effort and data by allowing service providers to import customer and user accounts from ConnectWise into the UC6 platform.  This will help service providers centralize their customer information, improve the process for keeping customer information up to date and reduce the duplication of effort.

“With the UC6/ConnectWise PSA integration, service providers can drive additional growth and profitability from the cloud by lowering operating costs and improving organizational scalability,” explained Rob Bissett, Vice President of Product Management for 6fusion.

Additionally, UC6 will export all workloads to ConnectWise as managed configurations, which will improve the service provider’s ability to offer their customers exceptional service as well as to include cloud workloads in ConnectWise reports.

“We are excited to be working with 6fusion to provide improved operational support for cloud-deployed workloads,” said Jeannine Edwards, Director of ConnectWise Community.  “We are committed to partnering with leading vendors to drive additional value to our community.“

To learn more, visit www.6fusion.com or stop by Booth #422 at the ConnectWise IT Nation 2010 event in Orlando, Florida, November 4-6, 2010.

Contact: John Cowan, 919-917-5150

PR: IaaS Leader 6fusion Launches Comprehensive Cloud Computing Platform for Data Center Operators and IT Service Providers

June 7, 2010 — 6fusion today announced the launch of UC6 3.0 beta for data center operators and IT service providers. The new release includes a number of important new features, including:

– Building, controlling and maintaining cloud workloads running on 6fusion’s iNode Network or privately within the customer’s own data center
– Integration of the light weight 
UC6 Profiler agent, released in 2009, into the UC6 Console dashboard, giving service providers the capability to perform deep pre-migration analysis
– Capability for data center operators and customers to launch new 6fusion Infrastructure Nodes anywhere in the world from a centralized NOC
– Instantly ‘unplug’ workloads from the cloud and redirect them elsewhere
– True metered utility powered by 6fusion’s patent-pending Workload Allocation Cube algorithm
– Integrated granular charge back capability for enterprise resource segments
– A rich set of integrationg capabilities to allow external programs to take advantage of the highly modular design of UC6.

UC6 is a software platform that converts virtualized servers, network and storage into a billable utility and makes the utility computing resources accessible to external users. 6fusion federates independent third party data centers, which comprises its iNode Network. The iNode Network is used by IT Service Providers and Independent Software Vendors to deploy cloud based solutions on behalf of their customers, paying only for the compute resources consumed. 6fusion is the only 100% channel-only focused IaaS enabler in the market.

UC6 can also be deployed inside a private enterprise by 6fusion Solution Partners, which 6fusion has been quietly doing for the past several months. “The ability to create a single interface for Enterprise customers to deploy workloads internally or externally onto the iNode Network is in very high demand in the cloud industry,” said 6fusion co-founder and CTO Delano Seymour, the principal architect behind UC6. “Using UC6 3.0, customers can deploy workloads to either their own private data center or one of our multi-tenant data center partners in a matter of minutes,” he added.

UC6 3.0 was also designed to be hypervisor independent, a key feature for the future of IaaS. “There is a lot of debate going on right now over the viability of virtualization vendors offering full cloud management solutions, but our customers don’t want to be locked in to one vendor,” said 6fusion co-founder and CEO John Cowan. “UC6 3.0 architecture will allow the customer to use their choice of hypervisor without compromising the richness and functionality of the cloud or getting locked in,” he said.

The new 6fusion platform also features the UC6 Profiler, which was introduced to the market a year ago. Since launching the free tool, customers and partners have been using it to analyze the potential cost of moving to the cloud before conducting any actual migration. “Profiler allows our partners to gain valuable insight into the cost performance of customer applications they are thinking about migrating to the 6fusion iNode Network,” said 6fusion Director of Partner Development Doug Steele. “With our new release, the Profiler agent can be deployed directly from the UC6 Console,” he added.

Data residency control and self-service provisioning were considered high on 6fusion’s priority list for UC6 3.0. “When we started our company customers gravitated to us because we could assure them control over where their data sits,” Steele explained. “Now, customers in one geography can ensure that some data remain local and other data can be processed in a completely different geography, without ever having to leave 6fusion’s console to accomplish the task,” he added.

UC6 3.0 usage is based on 6fusion’s patent-pending algorithm, called the Workload Allocation Cube (WAC). The WAC algorithm dynamically blends the critical compute resources required to operate practically every x86 based software application, yielding a single unit of measurement. “The Workload Allocation Cube is the most granular unit of measurement for cloud infrastructure on the market,” said Mr. Seymour. “Our customers have been using the WAC for over three years to meter cloud infrastructure because of our unique ability to simplify the cloud consumption experience,” he added.

UC6 3.0 is first being made available for existing partners and customers, followed by a general public release scheduled for later in the year. For more information about 6fusion UC6 3.0 or other 6fusion related technologies, email info(at)6fusion(dot)com or visithttp://www.6fusion.com

Enterprise Customer Uses 6fusion Profiler to Drive Cloud Strategy

I’ve been off the radar in recent weeks as things around 6fusion have been busy, but few weeks ago we blogged about the Profiler application we’ve been working on. I’ve just come up for a bit of air on the project but while I was in the thick of things we unearthed an interesting sample of real life, multi-faceted, cloud impact. I thought it was worth sharing and my IT Director friend at the company I’m about to tell you about said it was ok to share a tidbit with the world (Special thanks, S.).

Before I get into some of the details of this post, let me give you a little snapshot of the Enterprise operation we’ve been working with:

  • Location: Caribbean/Latin America
  • Industry: Financial Services
  • Data Centers Operated: One internal/One co-lo
  • Main Challenges: The client faced infrastructure budget restrictions, which stresses application time to production cycles. In addition, the customer needed to reduce the cost of protecting mission critical systems without compromising their established RPOs and RTOs. Most importantly, certain data and applications could not be operated in North America for compliance/regulatory reasons.

Like many IT leaders today, the IT Director of this company was looking to the cloud to potentially address their business requirements.

Using 6fusion’s Profiler technology currently in controlled beta, the customer was able to determine a projected cloud computing cost application by application across their enterprise. Here is a snapshot of their live data output:

What we find intriguing about the report capabilities we’ve enabled is that we are helping the customer cross the cloud chasm by using dollars and cents as the vessel. We believe the price to value ratio trumps even the most innovative of technologies in almost every purchasing decision. So it stands to reason that if you can’t tell a customer ‘what it costs’, you are pretty much just selling to yourself.

Cloud computing is no different.

Newly armed with valuable information about the cost of running their EXISTING production applications in active and passive states in the cloud, the IT Director could make confident business decisions that not only met his technical objectives, but also the objectives in his counterparts in the Finance Dept.

An interesting observation about integrating 6fusion into the enterprise is that our technology helps to blur the line between public and private cloud infrastructure. By turning the client’s own infrastructure into a self-contained cloud (or private cloud) using the same algorithm that powers our public cloud offering, we can effectively create a permanent economic bridge between the two environments (and like a real bridge, it can support free-flowing two-way traffic).

So here is how this individual client is using this economic bridge to drive cloud migration priorities for their organization: They identified a set of workloads they urgently need infrastructure to perform vital test and dev processes. Inexpensively and safely, they can operate those workloads in cost-reduced resources located in the U.S. Next, they identified two mission critical systems – Exchange and SQL – that they can duplicate leveraging the public cloud infrastructure located in the Caribbean/Latin America region. This is critical for the customer because things like email and databases must remain in certain jurisdictions only (excluding the U.S).  This issue transcends many enterprise cloud deployment scenarios and the subject has is getting a lot of coverage lately.

The end result for the client:

  • They achieve public cloud leverage at a financial pace they can handle out of the gate and in the future
  • They effectively doubled their data center footprint to include utility resources located in the U.S and Caribbean/Latin America regions
  • Because of the ability to cloud profile, they can make periodic future cloud migration decisions in lock step with the constraints put on by the Finance Dept
  • With a cloud profile, they know cloud costs well before they spend time and resources tapping into and testing a public cloud
  • They maintained data residency integrity – a crucial show stopper for any cloud consideration in the past
  • They have a public cloud infrastructure that runs both their web oriented apps as well as their line-of-business apps, eliminating the need for cloud-silos.

The future for this client, like many others we’ve begun to collaborate with in recent months, is rooted now in cloud efficiency. Here are some of the questions 6fusion and its partners will help address for IT operations:

  • How can I make my current production applications scale more efficiently so that I can reduce my cloud costs prior to migration?
  • How far can I push the public / private cloud integration envelope?
  • Using the cloud like a pure utility, what workloads can I power down during off peak to shrink my cost footprint?
  • How do my applications in cloud perform against category benchmarks from 6fusion’s ecosystem?

UC6 Profiler is in beta. If you’ve got an interesting set of business circumstances and a serious need to contain or reduce your or your customer’s IT Ops costs, give us a holler.

Application Profiling: The Key to Customer Cloud Migration

For the past several months the team at 6fusion has been working directly with a select group of customers using a prototype software tool called the UC6 Profiler.  The UC6 Profiler is an agent we created that uses our patent-pending algorithm for measuring utility computing consumption.  The UC6 Profiler meters live client applications running in their own offices or data centers, recording resource usage as though the applications were all running within 6fusion’s federated cloud infrastructure. The report output paints a clear cost picture, application by application, giving the customer an unprecedented set of data to guide and support their decision to migrate any or all applications to the cloud.   We’ve provided an example of the output report here.  It’s early stages yet for this, so the info is pretty raw. We’ll ‘gloss it up’ when it goes into production later in the year.

In our experience, the number one customer question about the cloud is “what does it cost.”  Like others in the field, we see the ability to profile consumption and report running costs to be one of the missing links to cloud computing adoption.  As you can see in the sample report provided, this customer can identify that the application called “CUSTMAIL01” would cost the ‘most’ to run in the cloud.  Conversely, the application called “CUSTAAC001” would cost the least.

Going beyond the customer implications, the UC6 Profiler could also be the missing link for the IT Service Provider community to truly take the reins of the cloud and leverage it to build significant new revenue opportunities.  But the implications don’t stop there.  Profiling can play a huge role for ISVs looking to plan and price SaaS offerings.  I’ll elaborate on this in another blog post.  We’ll focus on moving one mountain at a time!

Here are a few other tidbits we can share with you for now:

  • The Profiler agents will work with both virtualized an non virtualized applications
  • Users can profile web applications or traditional client/server applications
  • There are no significant O/S limitations
  • The Profiler will be a completely free download for registered 6fusion partners.

Stay tuned for more to come regarding the UC6 Profiler in the coming weeks!