From Rain to Sunshine: Back from London and Headed to Miami, Las Vegas and Santa Clara
Posted on January 30, 2012 by Rob Bissett
Lots going on at 6fusion and it’s all good – last week, we were in London for Cloud Expo Europe and Cloud Camp London.
We previewed our new UC6 IaaS federation platform at Cloud Expo Europe and John Cowan spoke on Equinix’s “Home of Cloud” panel. The show was well attended – in fact they exceeded their expectations by a fair amount. Europe is very cloud focused right now. We heard a lot of feedback around the various options out there and several themes came to the forefront – data residency, and utility metering – both of which 6fusion is well equipped to provide. It will be exciting to follow up on these opportunities in the coming weeks.
I’ll be heading to IT Expo this week and speaking on the “Best Practices for Monetizing the Cloud” panel alongside Nancy Maluso of Sonus Networks and Jim McLaughlin of GENBAND. We are going to discuss the pitfalls resellers and service providers need to avoid and how to build a successful cloud offering. These panels are always interesting as everyone brings their own experience and insights.
After that – I am off to Las Vegas for VMWare Partner Exchange (booth #504). We’ll also be exhibiting at Cloud Connect Santa Clara (booth 910).
If you are attending any of these shows and want to meet up – ping me on Twitter (robbissett).
Cloud Brokerage and the Future of the IT Utility
Abstract: Cloud Brokerage is an emerging trend in the broader cloud computing industry. Opinions differ widely about what it means to be a broker and the significance brokers will have on the future of the industry as a whole. The reality is that the brokerage model signals the real potential to commoditize the compute utility, which will climax with the genesis of compute as a tradable commodity like soybeans, oil or minerals. In this four part series I will take a deep dive into the concept of cloud brokerage and connect the dots between the key trends and market demands that will shape a force few in the industry see coming and fewer still are prepared to accept.
Part I: The Analysts Weigh In
The National Institute of Standards and Technology (NIST) has established a working paper on the subject of cloud brokerage, signaling the importance of a movement that is taking shape inside the cloud computing industry as a whole.
The NIST working document describes the Cloud Brokerage success criteria as follows:
A cloud-user wishes to carry out an action on cloud-provider-1 using a federated interface, with no direct knowledge of cloud-provider-1 commands or interfaces. A cloud-management-broker offers the cloud-user a federated interface to multiple cloud-providers through a human user interface, an application programming interface or both. The cloud-user selects desired cloud-provider-1 resources, action and action parameters using the cloud-management-broker interface. The cloud-management-broker collects and marshals the selected action and parameters from the cloud-user‘s selection and issues the desired command to cloud-provider-1 using cloud-provider-1 native interface.
The idea of cloud brokerage warranted enough noise to be covered in detail within the analyst community in 2011. However, depending with whom you subscribe, cloud brokerage has very different meanings. While there has been definite progress on the behalf of the analyst community, I think the potential for what this model could mean for the cloud computing market goes much deeper.
To be clear, I believe the role of what I am calling the “infrastructure broker” will be the most significant movement in the computing industry since the advent of virtualization and cloud.
Before I get into the immense complexities of that statement, let’s take a look a few perspectives from key industry analysts:
Gartner:
According to Gartner research expert Benoit Lheureux, the role of the Cloud Service Broker (CSB) is to “aggregate and add value to cloud services by providing a single point of entry to different types of cloud services.” Gartner goes on to illustrate some key defining characteristics of a cloud broker. According to Gartner, a CSB is a CSB if they genuinely perform:
- Aggregation across VARS and IT Distributors
- Integration with Systems Integrators
- Customization for SI’s and Professional Services organizations
Gartner’s definition of Cloud Brokerage is by far the lightest among the analysts. If you believe Lheureux, Cloud Brokerage is really just the modernization of the IT channel.
451 Group:
451 generally consider the category of CSB a part of broader market called cloud on-ramps. In addition to providing some sort of provisioning technology, CSBs differ “in that they provide a value-added economic function, which matches workloads to the best execution venues.”
While I think 451 only provides cursory attention to cloud brokerage as a concept, the are at least more directionally correct in the sense that they see Brokerage providing a level of sophistication that is unique in the delivery of cloud services – namely the concept of ‘workload matching’.
Forrester:
I think Forrester has done the best job among the research outfits when it comes to taking a seriously deep look at the CSB market definition. Forrester sees the CSB
playing a pivotal role in the future of the entire industry. Analyst Stefan Reid’s taxonomy picture does a fantastic job of identifying the interaction of different players.
According to Forrester, “the simple broker model gains value only by comparing similar cloud provider options and using dynamic provisioning based on the actual spot prices of these resources.” This sounds similar to 451 and Gartner in direction and tone.
But Forrester goes on to elaborate on what they see the as the evolution of the brokerage model. “The full broker [model] goes far beyond [the simple broker]. It uses “cloud bursting” to provide IT users with higher value for a lower price.” Cloud Bursting, Forrester explains, “is the dynamic relocation of workloads from private environments to cloud providers and vice versa.” I’ll admit a slight sigh when I hear the cloud ‘bursting’ term (again), but I think Forrester has a great grasp on the technical role of the broker.
Gartner sees brokering as little more than modern distribution. 451 sees the concept as something they instinctually must cover but the details are hazy. Forrester has obviously put the most thought into their analysis. But the consistent underlying theme within these analysts is that brokerage insinuates a model whereby vendors inserting themselves and their technology between supplier and consumer to provide a layer of transactional value.
The debate and discussion goes much deeper than this and the potential for the cloud broker is much more profound.
In Part II of this post we will take a closer look at the role of the intermediary and who is likely to take up this position in the market.
6 things I think I think for IaaS in 2012
By John Cowan, Co-Founder and CEO of 6fusion
Time sure goes by in a flash, doesn’t it? Its that time of year again. Time for the requisite prognostication for the year ahead in the IaaS business!
Most pundits seem to think their slate gets cleaned at this time of year and they get to make a new set of blanket assessments for the year ahead. I don’t think it works quite like that. The 6 things I think I thought (or is it I thought I think??) for 2011 are still largely what I believe today, but some things have set a more or less aggressive course. Other things I was admittedly a bit premature about.
With that in mind, as I try to offer some insight into the year ahead I’ll do so with a bit of a redux to my 2011 post with updated thoughts and insight.
- 2011 Prediction: 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.
2012 Perspective: Hybridization WAS key in 2011 and I’m doubling down in 2012. If you’ve paid attention to the consolidation in the industry, you’d best do the same. The big boys are snapping up anything that smells like bridging the enterprise to the multi-tenant host. Look for this trend to intensify.
- 2011 Prediction: 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.
2012 Perspective: I’ve spoken with some pretty big names in the business and scale is an issue with their regional plays in the market. The challenge in 2011 for federation was the degree of difficulty associated with interoperability. There was much progress on this front in 2011 but I think before broad based federation goes from concept to reality there needs to be more plumbing. 2012 will be the year real interoperability tracks are laid as a foundation for scalable cloud federation.
- 2011 Prediction: 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.
2012 Perspective: VMware unveiled its plans to stitch together Vcloud operators at its big VMworld shindig, but this wasn’t the only giant making big bets on the cloud ecosystem concept. Equinix, one of the world’s largest data center operators, hatched is master plan for a ‘Marketplace’ of Platform Equinix Partners and Synnex, one of the most powerful IT Distributors in North America took a huge step with its Cloudsolv application and services portal. Watch what these three companies do in 2012 to drive ecosystem growth.
- It’s All About the Channel. Building a global business 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.
I am still a firm believer in the channel and I’m still banking my company’s future on it. However, the Channel failed to capitalize on the cloud opportunity in 2011 the way I thought it would. Don’t get me wrong, the needle definitely moved. But the cloud operators and the broader channel are still separated by an expertise gulf that is limiting how much cloud money flows via the intermediary. The investment from the IaaS providers continues to be there. Find me one IaaS services or software provider that doesn’t showcase a channel program today. 2012 will see the gulf shrink and the channel heat up because Distribution will hit its stride and carry with it more evidence of the gold rush I saw last year.
- 2011 Prediction: 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.
2012 Update: By the middle of the 2nd quarter I was beginning to worry about this prediction? Was I going a bit too far out on a limb? Then, bang! VMware announces the big deal with the NYSE. Wow. Talk about going big or going home. The NYSE community cloud has a lot of eyes on it. A large number of other vertical deals are hanging in the balance, hoping to learn what not to do when details of the NYSE project become more public. I think this VMware play will be a big success and in 2012, you will see many other big players follow suit.
- 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.
2012 Perspective: Spot market concepts made progress in 2011 but as expected were not able to truly capture the imagination of the market. However, the groundswell around commodity compute resource trading is gaining momentum. And in 2012 look for general progress in this area with a few players coming out of the woodwork to surprise some.
As a bonus prediction this year, maybe a 6.1 on the list so as to stay with my theme, look for vendors and pundits alike to completely drink the cloud brokerage kool aid. You’ll wake up one morning in the third quarter and vendors new and old will be touting themselves as the onramp to many clouds. It won’t be quite like the cloud washing we’ve seen over the past couple of years, but you’ll still shake your head in disbelief.
Have a great 2012!!
Why I’m Bullish on Cloud in Europe
Geographic expansion has always been a key component to proving out 6fusion’s technological and commercial strategy, but out of the gates we had never really identified where on the map we would choose to go.
Europe at the time looked like as good a place as any when traditional filters were applied. There is a good swath of the market that speaks our language. It’s not generally too far removed from North America from a support perspective (at least not as far removed as some other regions). The acumen for cloud is generally pretty high and the potential to tap available talent seems strong.
But every time I brought the subject of Europe up, I would encounter a number of objections for young companies like 6fusion. As I sit here about to kick off my company’s foray into the European market I was reminded of some conversations I had as I was working on the company’s course trajectory a little more than a year ago.
First there was the logic to consider among the Analyst community. I’ll call this “The Macro Theory”. It runs something like this: Although EMEA generally runs a tight second to North America in terms of market projections, the general consensus is that APAC will leapfrog EMEA. The theory is that the Total Addressable Market (TAM) in APAC is much larger and the propensity for that market to “skip” an evolutionary step or two to leverage the cloud is much greater. And the problem is magnified further by EMEA’s regulatory quandaries. The risk, as it was put to me, is that I could be potentially investing in a region with questionable growth and one about to fall to a distant third place among the developing regions for cloud computing.
Sheesh. Sounds pretty scary.
Next is what I call “The Lemming’s Guide to Market Planning”. Domain experts in this category suggested the behavioral patterns of other players in the industry suggest the Analysts might be correct. Peers in the cloud software business seemed to be flocking to APAC as though it was definitely the place to be for the cloud rapture. Recent acquisitions in the industry showed visible undertones about the importance of the APAC market as a deal driver.
Fair enough.
But if I can be accused of anything, I can definitely be accused of not giving a sh…., um, hoot about how others go about their business. Blazing new trails is part of our entrepreneurial DNA at 6fusion.
So onward I pressed.
I spent some time in Europe and listened to resident experts talk about the challenges they faced. I learned a lot about two major objections to investing in the region:
I couldn’t argue so much with the first point, so I conceded to avoid federating 6fusion iNodes in Greece or Italy in the near term, nor will I put my company into hock with Germany!
But… it’s the second problem that I saw as very intriguing. I can see how most emerging cloud companies would examine the region and basically throw up all over the place when they saw the way in which most European authorities treated data residency. As illustrated in a recent EuroCloud publication, there remains a lot of legal and regulatory plumbing yet to be done before the full advantages of cloud can be leveraged. Certainly it is more work than most young companies would ever entertain – and for good reason.
But not me.
You see, 6fusion emerged as a company built around technology designed to satisfy a customer base in the offshore Caribbean. I would argue you don’t know anything about data residency control until you deal with the subject in the context of companies whose very livelihood is based on financial and other data remaining firmly planted in remote places like Bermuda or the Cayman Islands (I lived in worked in both countries over a 12 year period). And no, I’m not talking about tax cheats, porn peddlers and online bookies. I’m talking about the world’s multi-nationals spanning the finance, investment, insurance and re-insurance verticals.
Coming from this pedigree it was hard for me to dramatize the challenge the European market poses. To me the challenge of data control, data residency and export as not so much of a problem. It is an opportunity. In fact, I see it as every reason why 6fusion would prioritize expansion into Europe above other important regions. As time goes on what we’ll see is simply that the way we think about cloud fits very well with the way European regulators and businesses view data control.
And it would appear the market in Europe is not exactly waiting around to usurped by other more creative regimes to eat its lunch.
It’s with this view that we’ll be making landfall next week at Cloud Expo Europe to showcase our wares to the combatants of the cloud war across the pond. And with the help of some major strategic partners we’ll be launching our European presence in a big way in the weeks to come.