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I had the opportunity to speak at the recent 2010 Channel Partners Conference in Washington D.C. this week. I participated in a panel discussion on cloud computing that brought together a group of people with diverse business backgrounds.
The conference, sponsored by Phone+ Magazine, is really focused on channel partners in the telecommunications industry. Basically these are agents selling data and voice services — anything from lines to handsets. I heard a different perspective on the “cloud” while attending this conference. Basically cloud computing = hosted VOIP. I guess that’s one way to look at it. Hosted VOIP could be looked at as a SaaS type of solution.
I also sat in on a presentation of Qwest’s new IaaS cloud computing offering. Since Qwest is our regional incumbent carrier I took special interest in their cloud strategy.
Finance & Commerce magazine published an article covering my recent keynote at the Cloud VISION 2009 event in Minneapolis. I think the article does a nice job of presenting both the benefits and risks of cloud computing. And the writer correctly articulated many of the characteristics of the new ReliaCloud platform my team is working on. I was pleased to see quotes from great local technologists such as George Reese and Tom Kieffer. Well done!
Everybody and their grandmother has heard about the Sidekick fiasco over the past month. Apparently the storage servers for the Sidekick mobile service had a bad day and Microsoft had trouble restoring customer data. The whole episode became a lead-in for a series of stories detailing potential disasters in the cloud. You see, if Sidekick has a bad week then maybe this whole cloud computing thingy is dangerous.
The media hyped up the notion that the Sidekick service represents cloud computing. Let me get this straight. So any online service that stores customer data is now considered cloud computing? This hype makes me want to drink heavily and find the keys to the nearest backhoe. Are interesting news articles such a rarity these days that journalists have resorted to this level of desperation? We stored customer data on the Internet a generation ago. It wasn’t cloud computing back then and it isn’t cloud computing now. So what is it? It’s (drum roll please…) just simply storing and accessing data via the Internet. Yeah, kind of boring isn’t it? I guess that level of banality doesn’t generate clicks and advertising dollars.
I was fortunate enough to be a keynote presenter at the Cloud VISION 2009 event in Minneapolis this past Wednesday. My presentation, “Getting Ready for the VISI Cloud”, was focused on the new ReliaCloud service platform — and specifically Cloud Servers, the first product to be launched on this new platform.
We had a couple hundred people attend the morning seminars. That’s a pretty amazing turnout on a cold and rainy October morning. It is obvious to me that cloud computing services have gained traction in the hearts and minds of IT people across the Twin Cities region.
Chris Howard from the Burton Group gave the first keynote speech. He focused on cloud computing from a very strategic standpoint — explaining how the cloud was reshaping IT within enterprises. I thought Chris gave one of the best cloud computing presentations I have heard in the past year. His presentation was clear and insightful. He skillfully blended cloud computing and socioeconomic trends. Well done Chris!
I’ve spent the past nine months working on ReliaCloud and I’m excited to see all the hard come together in a very solid service offering. Of course none of this would have been possible without a great team of application developers, system and network admins, and product managers. VISI has never launched a product with this level of automation, self-service capability, and scalability. It represents the evolution of our business and the way customers buy infrastructure.
You can check out a great synopsis of the event at the Minnov8 website. You can also find the presentations online at the VISI Blog. Here are YouTube videos of the presentations from the event: videos.
Thank you to the hundreds of people that attended the event. I really enjoyed talking with you and hearing your feedback. VISI is still accepting beta testers for the new ReliaCloud platform. The beta testing will start in early November — probably the second week of the month.
I bumped into an entertaining video today, shot at last year’s Web 2.0 Expo, where participants were asked to define cloud computing. The simple question of “What is Cloud Computing?” elicited a wide variety of responses. And those responses made one thing clear: the vast majority of Web 2.0 people have no real understanding of cloud computing. It was like asking people “What is Nuclear Power?” and listening to them tell you how it allows them to watch movies on their 65″ plasma.
I’m not sure exactly when cloud computing first became synonymous with the Internet. But I think the problem stems from a couple of things:
- People confuse terms such as the “cloud” with “cloud computing”.
- Cloud services are selling and companies are trying to recast their products to ride the adoption wave.
- Marketing people are driving cloud computing hype and the resulting definition distortion.
Pretty much all of us Internet techs used the term “cloud” back in the day. We used to whiteboard diagrams for customers showing them how their 56k frame-relay connection was tied into the cloud. We would draw multiple office locations connected to a cloud in the middle. The cloud was just shorthand for the Internet. It was nothing special.
Somehow the notion of accessing websites and data on the Internet morphed into a distorted definition of cloud computing in some people’s minds. I blame businesses and their marketing teams that are trying to cash in on cloud computing adoption. They have no real understanding or concern for the misguided messages they are sending.
I think the most interesting part of the video starts at 3:50. The gentleman at this point of the video relates that “cloud computing is being able to sleep at night knowing that your servers won’t go down. Being able to know that your operations person can go on vacation”. And that’s the problem in a nutshell: marketers and vendors making claims that cloud computing magically automates business operations, scales infinitely, never fails, and cures world hunger. Now you know why old school IT people roll their eyes when they hear about cloud computing.
The promise of cloud computing is cheap, easily accessible, generally reliable, elastic computing power when you need it. Cloud computing does not ensure that your applications are designed properly, that your systems lack security holes, or that your staff know how to manage your online business. Cloud computing provides you with raw power but you have to know what to do with it.
Google’s Gmail service crashed earlier this morning impacting users around the world. It sounds like people were able to access their Gmail accounts through traditional mailbox protocols like POP and IMAP, but not via the web.
The sheer fact that this is national news just underscores the scale of Gmail and other global email services. I actually think that Gmail is pretty reliable for a free (or very cheap) email service. In my experience it has better uptime than most enterprise-class Microsoft Exchange email service providers.
I wrote about Qwest’s new initiative to kill off local ISPs a number of months ago. I’m starting to hear more real world complaints from our DSL customers caught in the crossfire.
Here’s the typical story. Customer signs up for 7Mbps DSL services from ISP. Six months later the customer receives a letter from Qwest saying something-to-the-effect of “we accidently allocated too much bandwidth to your area”. The customer is given the option to either cut back their internet access to a much slower 1.5Mbps connection or sign up for Qwest’s shiny new ADSL2+ service with more bandwidth than they are getting now. Hmmm, gee. Tough decision.
I just happened to stumble upon a technical explanation for some of Qwest’s gerrymandering. Apparently their ADSL2+ technology is causing some crosstalk issues with legacy DSL customers. I’m sure Qwest’s marketing department sees this as a terribly unfortunate situation.
The traditional local ISPs are dying and the quality service they offered is dying along with them.
Google apparently runs its datacenters hotter than most companies achieving millions in cost savings. Industry standard datacenter temperature ranges were recently adjusted upward to between 68 and 77 degrees Fahrenheit (20 to 25 degress Celsius). I’ve oftentimes had polite disagreements with customers that tour my datacenters and balk at the 70-72 degree average temperature reading. Most people don’t realize that datacenter operators have gradually been raising acceptable temperature limits over the past decade. And it’s with good reason: that 5 degree temperature difference could mean as much as 20% energy savings.
I sat down with fellow Minnesota entrepreneur and Internet strategist Steve Borsch this week to talk about my company VISI. He wrote a very nice summarization of our conversation on the increasingly popular Minnov8 blog. Thanks Steve!
I was browsing Minnov8 one of the many interesting local tech blogs today and came across an linked article predicting the collapse of the SaaS industry. The interviewee in the article was Harry Debes, chief executive of Lawson Software — a local Twin Cities company that “done good”.
I’ve never met Mr. Debes but I have to believe he is a pretty smart fellow with a bio full of laudable deeds. But I believe some of his analysis in this article was off the mark.
First, he compares the SaaS phenomenon to earlier technology efforts:
This on-demand, SaaS phenomenon is something I’ve lived through three times in my career now. The first time, it was called ’service bureaux’. The second time, it was ‘application service providers’, and now it’s called ‘SaaS’. But it’s pretty much the same thing, and my prediction is that it’ll go the same way as the other two have gone: nowhere.
The problem with this comparison is that back in those days a fast Internet connection was 56k and companies like Google and YouTube didn’t exist. Some of the basic concepts supporting SaaS existed ten and twenty years ago. But we didn’t have the technology infrastructure to support it. Now we do.
An industry has to have more than just one poster child to overhaul the system. One day Salesforce.com (CRM) will not deliver its growth projections, and its stock price will tumble in a big hurry. Then, the rest of the [SaaS] industry will collapse.
Five years ago there were a handful of SaaS companies. Today there are well over 1000. You will have a hard time getting funded in the Valley if you are a software company without a SaaS play. You can add one more company to the growing SaaS list — and it’s a biggie — Microsoft. Okay, they call their version “software+service” but let’s call it even.
But, as we did the maths, we realized we could get killed. It was going to take us seven to 10 years before we made any money. That’s nonsense. So we reversed our plans. I’m very glad that happened because now we can sell the software in both models. We wouldn’t have to wait 10 years to make a profit.
Lawson created a product that was designed and marketed for specific types of enterprise environments. You have an internal cost structure you have to maintain in order to support your product and be profitable. No problem. But why did you think that same cost structure would align with the SaaS-world? It’s obvious that smaller, more nimble SaaS companies can establish profitability in less than 10 years. Your challenge is that you need to think “smaller” like your friends at SAP, Salesforce.com, and Microsoft. Your go-to-market strategy needs retinkering.
When the sunk costs have been fully depreciated, customers effectively run the software for free, thereafter. Whereas, if they went to Salesforce.com, it’d cost them a million a year because they’re paying for ongoing licensing and maintenance.
Mr. Debes would have us believe that companies don’t pay for annual software maintenance agreements (usually 15-20%), software updates, custom code development, testing and staging environments, production environments, and IT staff to maintain the application environment. SaaS allows companies to effectively share those costs because the code, infrastructure and people are all provided by the SaaS provider.
I talk to small, medium, and large companies every week that are looking to outsource parts of their infrastructure. I know at least one service provider that manages Lawson deployments for companies in their datacenter. That’s a hop-and-a-skip away from SaaS in my book. I’m not trying to say that SaaS is the answer to all our problems. Larger enterprises, some of whom are probably Lawson customers, will certainly have to tread carefully into SaaS. SaaS definitely has potential and to ignore it is a risky bet.
