Implications of the Twitter Hack for the IT Channel
One of the biggest industry news stories in recent memory happened this past week when Twitter’s back office was ‘hacked’, causing an information leak of epic proportions. When the story broke many read in stunned amazement. What I found in most of the blogs and stories I read following TechCrunch publishing the confidential documents was just like an eye-witness account to a horrific train wreck. There were plenty of stories about the shock and horror of it all. But there were very few stories that got past that and began to deal with the real questions.
In my mind, here is a real question: What the *%@$ is Twitter doing using Gmail and Google Apps?!?!
The point of this whole sordid affair, in my opinion, is not that Twitter got hacked. Software systems get hacked every day. And no, it’s not that the Cloud failed, as many mainstream naysayers hinted. The cloud did not fail.
I could not believe Twitter, a company with billions on the line and a bull’s-eye painted on its chest, chose to trust their most sensitive trade secrets and corporate documentation in the hands of a software service for which Twitter management could only have had limited control. Nobody failed here except Twitter (or Twitter’s IT Management/Advisors).
The Twitter leak underscores the importance of maintaining 100% control over your customer’s information when making the decision to recommend a ‘cloud computing’ solution. It also shines different light on the same argument I made for IT Service Providers to avoid the trap of the Google Apps Reseller model. In that blog post, I wrote that if you chose to align with Google Apps, “You are giving up the control over the operation of your customer most important applications: Productivity and Email. Opening up your IT Service practice to Google is nothing short asking the fox to guard the henhouse.”
At the time I was writing from the perspective of protecting the information assets of the IT Service Provider. But the same argument holds true for the information assets of their customers. As a trusted advisor to your customer’s business you would never recommend they store sensitive information on a shared application system (i.e., a SaaS product you can’t control or make a party to your customer SLA). Never. Period. End of discussion. It’s not only Compliance 101, it is pure common sense. SaaS has its place in the new paradigm of cloud computing and 6fusion is a huge proponent of the multi-tenant architecture. But it doesn’t mean companies should ever disregard the principles and best practices of Risk Management.
I’m not out to slam GOOG in particular. It just seems platforms like Google Apps, or even Microsoft’s hosted Exchange and Office suite, are only geared for home consumers. I think this model has a long way to go before it is considered optimal for IT Service Professionals and their real-life business clients. It’s not about how big Google or Microsoft are or how much money they can plough into security. It is about control over the systems and data.
Let’s pause for a bit of Channel introspection: Imagine for a moment what would happen if YOU were the consultant or Managed Service Provider that recommended to the CEO of Twitter that he trust his company’s most sacred information on the Google platform, trying to shoehorn security best practices into what is, at best, a consumer price-driven product. Then imagine you got the call when the breach happened. Forget about why or how this happened. And don’t even think about pointing the finger at Google. The why or how is a moot point.
Whose precious reputation is really on the line in situations like this? Yours or Google’s?
Here’s the simple truth: After an incident like this, it would be nearly impossible to recover from the reputational damage to your IT Service operation. And Google? Well to Google, your IT Service practice would be but minor collateral damage incurred on route to their seemingly relentless quest to topple Microsoft.
The message behind the unfortunate events at Twitter are clear: IT Service Providers must trust in themselves, and their own ability to harness the cloud, in order to earn the trust of their customer, which makes aligning your cloud strategy with the Google Apps of the world a very questionable step.
How One Service Provider is Making Money from the Cloud
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As you may or may not be aware, 6fusion is a channel focused company. That means we work exclusively with IT service providers of one variety or another to make the transition from legacy service models to a service model rooted in cloud computing. Our core technology is an algorithm that creates a single unit of measurement for the computing resources you need to run practically any application. You can check out our site to find out more, as this post isn’t intended to be a product pitch. But I thought I would take a few minutes to let readers know a bit more behind the video we recently linked to our blog site (it’s the one on the top of the list) since we’ve received a few inquiries about it.
I posted the video because it celebrates one service providers complete transition to the world of utility or cloud computing. The video itself is an actual local TV ad they started running a while ago in their local market. It is really the culmination of a lot of collaboration and it really underscores how they are making money from the cloud.
When we met WestTel they were your typical regional IP Services Company. Their ‘bread and butter’ was voice and data network services. And like most small ISPs, they were concerned with the commoditization of their core business lines and the projected erosion of associated.
WestTel became a 6fusion Solution Partner, which gave them access to a world of utility computing infrastructure nodes. Basically, that means multiple data centers running enterprise hardware in tier III facilities on an elastic, pay on demand model in accordance with how the industry currently defines ‘cloud computing’. What made it possible for them to work with 6fusion was really that there wasn’t much risk. We asked for no software licensing fees, no hardware investments, no minimums and no long term commitments. I still remember the quizzical look on their VP of Sales & Marketing’s face when we met, as if to say “what’s the catch?!”
With limitless computing resources at their fingertips, WestTel got busy defining where they thought they could add true value to their customers overall experience while unlocking new vertical product growth strategies. If I would offer any lesson to other companies looking to the cloud I would point to WestTel as a shining example of how to do it. They resisted the temptation to “boil the ocean” with a plethora of products and services and try to become something they are not. They looked inward at what they do best and they built from there. The result was the blending of their new found capabilities with 6fusion and their strong, reliable network to create a foundation for WestTel Utility Computing Services. They determined the best value they could deliver would be to help businesses protect their data and applications using 6fusion technology and their own global networking reach. Very smart.
With a new vision on paper, they relied on 6fusion to make some key introductions to software vendors already operating on the 6fusion platform and that would fit the criteria they defined for their new service line and that customers were demanding. After working out the T’s and C’s with their vendors of choice they took some baby steps into the market to test out their theory. This is another valuable lesson. Go slow when launching new services. Don’t over accelerate. Allow for some bake-in time so that you can catch your breath and work out any kinks. Product development and service innovation is a huge risk for providers. But with a zero risk proposition we were able to afford them, they had nothing to lose and everything to gain.
Not every product development cycle makes it to market. In fact, most do not. I suppose this is one of the reasons why we wanted to share WestTel’s TV ad. It makes the entire 6fusion team proud to know WestTel was right about the market and what their customers wanted and that they didn’t have to be Verizon or British Telecom to get into the market. Taking their services to the level of confident product marketing is a big step and we applaud them for it. They aren’t yet ready to take on the world’ telecom giants, but that really isn’t the point. In a market brimming with hype and hope, WestTel is a great example of how one service provider is making money from the cloud.
Microsoft Azure Pricing Adds to Cloud Confusion
The long awaited Microsoft Azure pricnig model was announced recently. For a while I really thought Microsoft would use its fashionably late arrival to Cloud Computing to build upon the short comings of other vendors and maybe take advantage of the opportunity to establish a leadership position in Cloud Pricing. Alas, yesterday I discovered that Microsoft will instead add to the confusion when it comes to Cloud Pricing. Here is a snippet of what they announced:
Azure pricing is a disappointment on three counts:
- It isn’t true utility or consumption computing pricing because the customer will not end up paying for what they actually use. Compute and Storage hours are a mistake because it presumes the full consumption of compute unit for any part of 1 hour. The customer doesn’t realize it but they are paying for computing resources they aren’t necessarily going to use. This is the hidden margin for players like Microsoft and AWS. While the customer watches the left hand, the right hand is busy taking money right out of the customer’s pocket! This pricing model is the equivalent to the old salami banking scam. Take fractions of cents from a billion accounts and think nobody will notice.
- It will not support the migration from legacy operating models to cloud operating models. I’ve written about this phenomenon before, but it seems like the big cloud players are dramatically out of touch with the average customer. This pricing model means nothing to the customer but a bunch of numbers. How does this pricing model translate to what the average customer doe today in their enterprise?
- There is absolutely zero predictability. And if there is, it sure as heck isn’t simple enough. Can someone tell me what the cloud will cost me for 15 .Net applications I have built before I get an actual invoice from Microsoft? Hold on, let me call my MIT laureates and Actuarial PHd’s to do some predictive billing!
I will say that Microsoft, unlike a lot of other cloud platforms on the market has smartened up to the fact that they need to account for Storage Transactions. Storage transactions can be the silent killer of cloud computing infrastructure. The only problem of course is understanding what that means to my application. How the heck do I know how this translates to a real world operation?
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:
Stay tuned for more to come regarding the UC6 Profiler in the coming weeks!