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Archive for the ‘cloud computing’ Category

As is customary at this time of year, my Lustratus Research colleague Steve Craggs has launched his 2010 predictions for the infrastructure software market.

At this time of year many people make predictions for what the year to come will hold, only for them to be long forgotten by the time next year’s predictions come round. Uniquely then perhaps amongst other crystal ball gazers, Steve first grades himself on the predictions he made last year.

So take a look at the Lustratus 2010 infrastructure software market predictions to see how he did.

Danny Goodall

I was reading Robin Bloor’s blog entry from earlier in the year recently where he makes some interesting points. But I’m not sure that I agree with all of them…

Robin attempts to identify some of the defining characteristics of cloud computing but I get the feeling that he is starting from a slightly cynical stand point. And whilst I agree that vendor and service provider marketing tactics have created a great deal of hype, I feel others must also share some of the blame for the confusion in the space.

Anyway, his 10 Defining Points for Cloud Computing blog entry is here. I tried to post a comment but as it appears that it’s still awaiting moderation, I thought I’d reproduce it below.

An interesting read as ever Robin but I can’t help thinking that you’ve defined Cloud Computing more so by the things it is not, than what it is. But perhaps that is the place to start when defining something as nebulous as Cloud Computing.

Completely agree that cloud computing is a confused set of definitions and misunderstandings but whilst I acknowledge that the marketing tactics of vendors and providers should take some of the blame – so should the market analysts. The global IT analysts have resisted the temptation to coalesce around a series of definitions and market categories for reasons of vested interest. De facto market category definitions and market segmentations are still up for grabs. So for analysts it’s currently about land grab – attempting to be the firm that defines the broad Cloud Computing categories and drivers. Their attempts to define and steer the market on their terms simply further serves to confuse prospective Cloud Computing users.

I also agree that standards are currently few and far between. The upshot of this is that market analysts and vendors can afford to go in different directions without being restrained by common understanding and artificial technical limitations. Again the impact is on the potential Cloud Computing user who is left trying to find their way in a world that is not easy to define, classify and compare.

Finally the ease at which technology vendors can enter into a hosting agreement with someone and then rename a product line and voila – they become a Cloud Computing vendor, has made the Cloud Computing market incredibly crowded, incredibly quickly. Attrition and customer cynicism should account for the weakest vendors here leaving the candidates for success in the market categories in which they compete.

For what it’s worth I’ve tried to bring some sense to the categorisation of the various market categories and cloud computing vendors/providers in the Lustratus REPAMA market landscape, taxonomy and segmentation model. Instead of ploughing my own furrow, I stood on the shoulders of giants and worked from some of the best definitions I had found in the blogosphere and beyond.

I wondered if your readership my find this useful. This is discussed here.

http://www.lustratusrepama.com/go-to-market/a-market-landscape-for-cloud-computing/

My colleague Steve Craggs has also attempted to define cloud computing in lay-terms based on the categories above.Steve’s piece is discussed here.

http://www.lustratusrepama.com/marketing/cloud-computing-explained-without-the-hype/

Danny Goodall

My Lustratus Research colleague Steve Craggs has taken a step back from the hype surrounding Cloud Computing and has defined it for the layman.

Steve’s premise was that the Cloud Computing hype had reached fever pitch and that some of the claimed benefits had become pretty difficult to believe. He wanted to strip it down to the basics, define it and look dispassionately at the likely benefits and the trade-offs involved. Steve has also put some of the vendors and service providers in the space into the right context based on the Lustratus REPAMA Market Landscape / Taxonomy / Segmentation model.

The document is embedded below and can be downloaded from Scridb or the Lustratus web store.

Danny Goodall

I had a meeting with a prospective client earlier in the week and we were chatting about how differentiation and positioning in Cloud Computing has to mature.

The contention was that cloud computing vendors and service providers today are too inwardly-focussed and that they should look at the external market to determine their competitive marketing strategies. Cloud Computing differentiation bears all the hallmarks of early market strategy and is very limited. It got me thinking. Imagine if competitive differentiation was carried out in other walks of life the way it is currently carried out by most Cloud Computing vendors and service providers.

Imagine if Porsche for example had spent 7 years perfecting its new sports car, a car that was specifically engineered to be better than the comparable Ferrari in many very specific ways, a car that can do many things for its prospective owner. Imagine then if at the car’s launch it’s main differentiation was:

The Porsche 912 – you no longer need a horse to pull it along the road

Imagine if Xerox copiers, in an attempt to differentiate itself within the highly competitive markets in which it is present made the bold claim that:

The Xerox X987 – eliminates the need for corporations to maintain a typing pool full of typists to make copies of documents.

When the car was a disruptive new technology it was important to explain to its potential users how it was different from the paradigm it was replacing – the horse and cart. Likewise this was true with the discontinuous innovation introduced with the photocopier / photostat / copier. But once these technologies matured to the point where the paradigm was accepted and there was a genuine choice of suppliers to source it from, vendors then had to focus on their real competition and their real differentiation.

But today this is exactly how much of the differentiation in the various segments of the Cloud Computing market is currently carried out. Vendors and service providers have not yet made the leap that Cloud Computing is “an idea whose time has come”. So instead of aiming their fire at other cloud computing vendors, their differentiation strategies focus on the thing that they are replacing – the corporate data centre, on-premise hardware, non-virtualised operating systems, non-scalable web applicatons, etc.

Don’t get me wrong, it is absolutely essential that the prospect knows how cloud technologies differ from traditional technologies, but Cloud Computing vendors must also realise that they are in real competition for this business and lead with clearly drawn lines of differentiation between themselves and their actual, cloud-shaped competition.

The good news is that there are many “positions” still available to cloud computing vendors. And once these positions are established in the minds of  prospects, it will be doubly difficult for their competitors to change these perceptions.

Taking such a position now will give some vendors a great advantage in the nascent Cloud Computing market but others will just feed the horse and call “walk on”.

Danny Goodall

I’m kicking off some research into the Decision Making Unit (DMU) for Cloud Computing services and software.

I’m interested to see how much, if at all, the cloud computing decision making unit differs from that of tradition data centre or infrastructure software sales. And if it does differ (as I suspect it does) then what is the impact on traditional marketing elements like audience, message, value propositions, supporting materials, etc.

I want to examine the decision making units for each of the different high-level segments in the Lustratus REPAMA market landscape / taxonomy / segmentation model for cloud computing.

For each of these segments, the basic question I want to answer is:

Within a B2B Cloud Computing transaction, what job roles are involved in the decision making process, what do these individuals need in order to arrive at a decision and how does this differ from traditional enterprise software sales?

It’s important to first stress that “marketing”, in the sense of the departmental responsibilities of the marketing team within a vendor or service provider, can only achieve certain things with respect of the decision making unit. Much of the responsibility for managing the technical and commercial sale obviously lies with the “sales” team. So in my analysis I will limit myself at the moment to exploring the influence that the marketing discipline can bring on the decision making unit.

First some terminology. We think about the roles of the DMU in the decision making process in the following way and refer to it using the acronym – IGIDBU (because the world needed another acronym).

IGIDBU – Initiator, Gatekeeper, Influencer, Decider, Buyer, User. I recognise that it isn’t the most simple or memorable acronym or mnemonic to remember, but saying it that way preserves some of the implied “chronology of contact” in the sales process. First we meet the initiator, then we deal with gatekeepers, etc. until the user “uses” the software or services.

This categorisation of the roles in the decision making process is quite common and is documented in many places – a good piece of background can be found in Strategic Marketing Planning and Control -Drummond, Ensor, Ashford published by Butterworth-Heinmann. I have seen some models that add another entity that owns the budget – “budget holder” or “Financier” but for our purposes we’ll wrap that role up in the Decision Maker because in my experience in infrastructure software sales the decision typically comes from where the budget is.

As I mentioned above, for each cloud computing market segment I’m going to identify the most likely job roles that fall into the IGIDBU categories above. Alongside them I want to map their needs and the likely marketing materials and messaging that is needed to help them arrive at the “right” decision.

The Change in Perceived Risk

Of particular interest to me is the change in the perceived risk of the ‘purchase’ with Cloud Computing. With an enterprise software licence, the degree of perceived risk in purchasing comes from a number of key areas including:

• Will the product meet the functional needs of the users?
• Will the performance of the product match the requirements?
• Is the vendor stable/credible/’suable’?
• How large is the capital outlay – and can we afford to write it off if the project fails?
• etc.

Cloud computing adds or at least adjusts a number of these categories of risk:

• Will the committed service level meet our needs?
• Will the service level delivered match what was committed to?
• etc.

With an on-premise purchase of licensed software, hardware, etc. the onus for ensuring performance and functional fit after the sale is with the company making the purchase. However, in a cloud situation where performance and more than likely functional capabilities will be documented within a service level agreement, the risk is mitigated to a degree. As long as the SLA is specified correctly, the onus for ensuring that the service level is met now lies with the service provider.

So the question is, will this perceived lower risk, speed-up or otherwise streamline the decision making process? And if so how will that change the way vendors/service providers market to the DMU?

The Change in Expense Accounting (Cap-ex to Op-ex)

Another significant change that Cloud Computing introduces is how the cost is accounted for. Instead of tying up significant capital expense and watching it depreciate on an on-premise solution involving physical hardware and software licences, a comparable cloud solution can be paid from operating expenses, based on actual usage over time.

As mentioned above in traditional sales, the size of capital outlay and the thought of having to write that off if the project fails is a key determinant of the level of perceived risk in arriving at a decision to ‘buy’. Again, the rhetorical question is whether this reduced capital commitment will change ‘purchasing’ behaviour and if so what impact that will have on vendors’ sales and marketing efforts.

I plan to publish the research later in the year. I am in the process of recruiting a number of vendors/services provider who are willing to provide input anonymously in return for access to the research. If you represent such an organisations, please contact me for more information.

As usual I will document the process in these pages.

Danny Goodall

Steve and I had an interesting and refreshingly different call this morning with GigaSpaces.

They had reached out to us to make sure we knew all about them so that they could be fully represented in each of the categories in our cloud computing market landscape / segmentation / taxonomy where they have a solution.

And after the call I can see that instead of just being in

• Cloud Software / Compute

They also have a valid claim to

• Cloud Software / Data

and may be even

• Cloud Software / Cloud Management ( /Application Services Management )

This raised a bit of a dilemma for me. I certainly want to represent vendors and providers accurately in the segmentation model but I want to avoid vendors appearing in lots of different segments just because they believe that some esoteric feature or other qualifies them.

Instead I want the segmentation model to reflect where the vendor/provider specifically and actively addresses a market need with a specific capability and value proposition. So if I hear from a vendor/provider “yes we can do that too”, I’m reluctant to simply add them to a segment. After all the motivation behind producing the segmentation model was to remove some of the confusion present in the Cloud Computing not to perpetuate it.

So I think we’ll need to reflect on what we heard this morning from GigaSpaces and think how best to represent those vendors in our market segmentation document that have a single product with broad capabilities. Having said that I think there is enough about the XAP proposition that means I will be adding it to at least one more segment of the market landscape.

Anyway, the refreshing part of the call was that GigaSpaces’ marketing seems to focus on what they can do for organisations rather than simply placing the “Cloud Computing” term before, after and in the middle of their product name everywhere it appears. In fact you have to go digging on their web site to find references to the cloud-enablement features of their product line. I’m not sure whether they have taken this approach consciously or if it is that they’re not sure how best to position their offering in the cloud market. The risk I guess is that as they are not positioned specifically as a cloud computing vendor, they may not be placed on clients’ long lists. But it certainly differentiates them and different is usually good unless you’re selling 8-fingered gloves.

These calls with vendors are useful for many reasons but mainly to test some of my assumptions. As with many of the products and companies I have looked at in compiling the segmentation model, I had “assumed” that I knew what the product was and what it did. It turns out there are many more strings to XAP’s bow than I had at first realised. I knew GigaSpaces as a purveyor of extremely scalable application servers but that, it turns out, is only half the picture.

One interesting feature of GigaSpaces’ XAP product is its application services management layer (my term not theirs – they use application management services!). This layer understands service level commitments for the infrastructure as well as the applications that are deployed to it. It’s common practice for the infrastructure to “understand” the service level that is expected from the infrastructure itself – usually measured in CPU percentages, data volumes or some such. However it’s not so common for the infrastructure to understand the commitment that the application developer has made about the service level that the application will deliver. These application layer service levels are usually described in some business metric and to then have the infrastructure react to automatically provision more infrastructure to meet the business’ requirements to ensure that application SLA commitments are met is a certainly an interesting claim. One that we will dig into a little further over time. GigaSpaces’ Jim Liddle explains a little more here – whist also picking a fight with TIBCO over whether its claim that “self-aware elasticity” is something unique to Silver.

Interestingly, it appears that with a number of GigaSpaces recent Cloud Computing customer wins (they claim to have 75+ “cloud” customers) they have in fact used this application management services layer to control and manage Amazon’s EC2 infrastructure. This ability to manage application services outside of its own compute infrastructure goes some way to answering my rhetorical question of whether any vendors were focussed on providing a pure play layer for application services management. It appears that there are.

So I’ll make some changes to the segmentation model in light of our conversation this morning and I’ll also keep an eye on how GigaSpaces’ cloud proposition develops – specifically following their Platform as a Service partnership with ServePath’s Go-Grid announced earlier today.

Danny Goodall

I’ve been a bit busy recently and so instead of finishing off the complex REPAMA SAS into the “Cloud Computing / Cloud Software / Cloud Management / Application Services Management” study, I decided to produce a rough draft of the much simpler REPAMA into Force.com’s go-to-market strategy instead.

Whilst the segment analysis study only covers Force.com at the moment, I will add additional vendors/providers into the study over the coming weeks. If you have any suggestions who I should compare to/with Force.com, let me know.

I’m quite pleased with the result. Not because of any specific talent on my part but rather as I’ve already said here, Force.com’s marketing is a case study in how to take a new, disruptive technology to market. They understand their audience, they know what problems they solve and they know why they’re better/different. They communicate in clear language and they repeat their positioning strategy again and again and again consistently in all of their out-bound marketing communications. They’ve had successes and they’ve been able to document this and use it as proof of the claims they make. It’s been a joy to reverse-engineer it. That’s not to say that I think it’s perfect – they do tend to mix their audience and messages (audience strata mismatch) but it is very good indeed.

As I’m working through the cloud computing market and helping some vendors with their go-to-market strategies I’ve decided to share this and some  future studies on here because as I said in my ironic blog mission statement all those months ago, I want to highlight best practice in marketing communications and product marketing through this blog. So I thought it would be useful to share what value propositions and messages a market leader is using to address their prospects.

Anyway, below is the positioning statement that I’ve reverse engineered for Force.com’s proposition to end-user organisations. (I don’t plan to tackle the ISV or SI propositions yet)

It’s a little woolly and raw at the moment but even in that state it’s clear that Force.com knows its market, its competition and its USPs. The REPAMA SAS containing just Force.com at the moment can be found online at  Slideshare.net and is embedded below.

If you’d like a copy of the slides let me know. For details of how to interpret the results of the REPAMA study please review the Lustratus REPAMA Guide.

Danny Goodall

Steve and I met with the good people at Force.com this morning to get an update on their approach to the Cloud Computing market and to hear their vision for the future.

I’d already carried out some REPAMA analysis of Force’s marketing proposition and, just like I found when I looked at Oracle’s ESB proposition,I was very impressed. With some vendors’ marketing propositions I have to spend a long time inferring what their strategic marketing strategy is, for others the strategy is so well communicated to their prospects through their out-bound marketing communications that my job is made easy.

And so it was with Force.com…

Unlike complex on-premise .Net and Java development tools, Force.com is half the cost and five times as fast

I’m paraphrasing and simplifying of course but that is about the nub of the proposition. It’s repeated over and over again and as we found out this morning there appears to be some substance behind the claims. That said, neither benefit metric (cost nor time) can be impartially validated. But that doesn’t really matter. I know, I know, of course it ‘technically’ matters but this is about market perception where Force.com was first to grab a space in prospects’ minds and that will be tough if not impossible for other vendors/providers to wrestle back.

Force.com is signing up end user customers and ISVs in ever-increasing numbers and with their SFDC subscribers subsidising the provision of the infrastructure to their Force.com platform users they don’t have the set-up costs and growing pains of some of their potential rivals. It’s an impressive operation and one that I’m sure we’ll touch on in a bit more detail in the coming months. But taking off my marketing analyst hat and putting on my technology analyst hat for a moment, I have one concern about these off-premise platform as a service propositions. And the people we met from Force.com were, as yet (although I’m meeting with one of their techies who I know from a previous life for a coffee this evening) unable to answer satisfactorily, and that concerned workflow and process orchestration.

How does a process that is developed with/within Force.com play a role in an externally managed process/service orchestration or workflow? The answer for process orchestration appears to be that any fragment of a Force.com application can be exposed as a web service which means that you have enough granular control (and associated complexity by the way) to do anything you want. But what about an off-premise managed workflow that relies on providing UI from a number of different on-premise and off-premise systems to achieve the result? Can Force.com UI and logic integrate into that sort of external situation? We’ll see.

Anyway, as I said I was impressed as much by what I heard as what I had seen about the way the company executes. On top of it all they have taken cloud computing from the theory and made it real for many users. So, as I said, hats off to them.

Danny Goodall

So Steve and I had a briefing call with Kaavo yesterday who have some interesting technology. And it set me thinking about whether there is a market for pure play application services management in the cloud.

Kaavo automates the job of application configuration and management in the cloud. The product – imod, is rules and workflow-based and manages the life-cycle of application provisioning, including deploying and configuring the software components or services required to create the environment in which applications execute.

I hope I’m not dumbing it down too much to say that I think of it as a data centre automation tool that understands how to manage virtual IaaS instead of physical infrastructure. Kaavo’s CEO and founder Jamal Mazhar would I’m sure also point out that Kaavo takes a top-down, application-centric approach when compared to other solutions in the space. The IaaS deployment environments that they currently support include Amazon, Rackspace and GoGrid amongst others with support for the Eucalytpus project coming soon.

The product naturally fits into at least two of the categories of the market landscape / taxonomy / market segmentation model that I’ve developed. They certainly appear in

• Infrastructure Services/Services

But I could also make a case for them in

• Cloud Software / Cloud Management

and even

• Cloud Software / Cloud Management / Application Services Management

But whilst the business model of Kaavo remains service-based (they charge per CPU hour of managed application) then that pretty much excludes them from the last two software-based categories.

As I’ve been looking at the application services management category in some detail, one pattern that I’ve seem amongst vendors such as DataSynapse (TIBCO), Appistry, and 3Tera is that whilst they offer the management services to automate the deployment of applications, they appear to major on deploying those applications and application components to their own infrastructure as opposed to infrastructure provided as a service by a third party.

A number of these vendors have come to Cloud Computing via Grid Computing and as such it makes senses that the virtual infrastructure that they deploy to is their own grid. They would rightly point out that owning the management and the infrastructure leads to many benefits such as tighter control, better monitoring and better support for the scaling the infrastructure up and down to match demand. In fact some of these vendors do appear to provide the option for deploying to third-party infrastructure services such as Amazon’s EC2, so it suggests that this sort of hybrid infrastructure may be being endorsed.

But I guess I’m left wondering two things.

Firstly is there really a separate market for pure-play application services management where the infrastructure is always provided by a third party? Don’t get me wrong I can see the need and I can see the benefit but it looks a little too much like the existing discipline of application services management already present in today’s data centre automation tools. So if these existing tools add the capability to deploy to, monitor and manage virtual infrastructure as a service then they will be well placed to get the business. But then again perhaps adding this capability is not a trivial matter. Hmm. Not sure.

Secondly, assuming that there is a separate market – what is the route to market for this sort of pure-play, services-based ( as opposed to licensed software ) offer? Could it be taken to enterprises directly? Yes, but it would require significant resources. To me, it looks like a more natural proposition for aaS providers to help them manage the massive number of deployed applications that they will be looking after if the predictions for the impact of cloud are accurate.

Either way Kaavo has an interesting approach that I’m sure either Steve or I will revisit as they develop.

Danny Goodall

OK so having arrived at the first cut of a segmentation model for the Cloud Computing market, I am now embarking on a series of Reverse Engineered Positioning and Messaging Analysis (REPAMA) studies.

The problem I now face though as I start tp look in detail at various cloud vendors’ marketing propositions is that their products, capabilities and value propositions all appear to blur into one.

I guess this is a symptom of the early market nature of Cloud Computing. I would expect that as the market develops, real prospects will make real decisions based upon their real needs, and real differences will be stressed and perceived between the products and services of different vendors/service providers.

But right now the general approach I see is that no matter which product or service of a particular vendor I’m looking at, the proposition to the prospect typically boils down to.

Cloud Computing is good

…and this fits for any product in the portfolio. I see…

Cloud Computing does this, Cloud Computing enables that,Cloud Computing reduces this and Cloud Computing increases that.

Fine. But there are a couple of problems with that.

Firstly, and somewhat obviously, if all vendors/service providers simply evangelise the category like this instead of focussing on what they specifically can do, there is zero differentiation. And with zero differentiation the business typically goes the way of ‘market leader’ or at least the vendor/provider with the greatest market reach.

Secondly, if I were a prospect and all I hear about is the generic capabilities and benefits of the cloud, how do I know what each of the different products in your portfolio could do for me? It might be good to talk to me in terms of what the individual products do, how they are each different from/superior to competitors’ products or alternative approaches, what tangible things each product changes for me and what I would be left with AFTER I’ve bought each product from you.

I should stress that there is another category of proposition developing in my analysis which says cloud is good BUT there are lots of problems and potential problems to address first.

This is an obvious proposition and one that vendors/providers in new paradigms like cloud quickly rally around. It goes something like this…

Cloud will do lots of great things for your organisation but you have to make sure you do it right or all sorts of bad things could happen…

The problem with this proposition is that there is an obvious implication.

…and if you don’t solve these things, you’ll lose your job.

This negative connotation and association with the potential failures of cloud initiatives are perhaps not the best way to attempt to mobilise prospects. Having said that, as the movement toward the cloud builds pace it will likely be this “proceed with caution” proposition that gains traction. As cloud becomes a given, so it will be the vendors/providers that can prove that they can quickly address the deficiencies inherent with current cloud strategies and mitigate the risks involved that will rise to the top.

Anyway these are some of my early findings that I thought I would share.

I’ve decided to first look at the Cloud Software / Cloud Management / Application Services Management category from the segmentation model. And I’ve decided to take a look at Appistry first – mainly because its a category that I’ve had direct experience of but also because in a market as broad and as complex as this one, well, you have to start somewhere.

I’ll keep you posted as I move forward.

Danny Goodall