lustratus REPAMA

Archive for the ‘strategy’ Category

I’ve just uploaded a document to Scridb which is based on a series of blog entries from the REPAMA blog.

In this series of 8 blog postings I described the format of the positioning statement that we use to help our clients capture their company or product strategy. I’ve finally got around to committing the description of the 7 elements…

• target customer/ideal client
• main pain/need or desire
• product name
• product category
• main reason to buy
• primary competitor or alternative
• the unique selling proposition – USP

…to ‘paper’. The document is embedded below and can be found on scribd.com.

Enjoy!

Danny Goodall

I see that Progress Software is in the midst of another restructuring and that to achieve this it will shed 12%-14% of the workforce.

This article details the problem and describes how “One Progress”, an alignment of the different divisions under the same banner, is the plan to turn the company around. I for one really hope that Progress can find some upward momentum. I worked for Progress for many years and still have some close friends at the company and its demise and inability to capitalise on the excellent technology it produces frustrated me then and it saddens me now.

President and Chief Executive Rick Reidy is tasked with a tough mission. To turn around a company whose main product line has reached maturity and whose growth initiatives and acquisitions have failed to gain traction. All of this in ultra-competitive markets and a pretty tough economic climate. My colleague Steve Craggs asked the question a little while ago whether the time is right for Progress to be acquired. It obviously wasn’t then but surely that point is getting closer.

In another article, some detail is provided on how the company plans to turn things around. It plans to:

1.Enhance Progress Software’s product strategy by focusing on growth opportunities in the enterprise software market and bring new products and solutions to market;

2.Change the way Progress Software takes its products to market by becoming more customer and solutions driven. This strategy will enable the company to be even more focused on ensuring customer and partner success.

3.Increase Progress Software’s market awareness, leveraging its more visible product brands that carry strong recognition in their respective markets.

It looks like a good to-do list. The question is whether it can be done.

The last two items struck a chord with me. Historically Progress always saw the technology as primarily important and the marketing function as a necessary evil and cost-centre. Instead of viewing marketing as the creative engine room that could give its products the platform they deserve, the engineering team had a disproportionately loud voice.

This approach came from the previous leadership’s engineering roots coupled to a negative attitude to the very concept of marketing. Instead of listening to the needs of companies and aligning all sales and marketing efforts behind them, products were developed to solve internally perceived technical problems or to match competitors’ functionality. Products were marketed based on esoteric features which resulted in ephemeral technology leadership but not continued sales dominance. It was still great technology because Progress is an engineering company but it was technology for technology’s sake.

I must say that whilst I worked with Rick years back, since he’s taken the helm I really don’t know what priority he places on strategic marketing within the new One Progress. But to achieve 2 and 3 on that list above will involve a fundamental change of corporate DNA.

I just hope that they try to sell and market their way out of the problem and not engineer their way out.

Danny Goodall

I’ve been working on a way of categorising value propositions for some time. I’ve arrived at something I refer to as MITICOR which I believe represents the atomic value proposition elements.

By this I mean that all business to business value propositions can be broken down into these 7 base elements. I’m sure I will refine this over time but for our purposes these elements allow us to analyse and categorise the different value propositions that vendors use in their go-to-market efforts.

So what do these categories refer to?

Market

Elements categorised as “Market” include value propositions that relate to the organisation’s market or competitive situation, new product or service introduction as well as the organisation’s marketing efforts such as awareness, public relations or image.

Income

“Income” includes any offer that proposes to increase or sustain existing revenue. In addition new revenue streams fall into this category.

Time

“Time” relates to any value proposition that reduces the time it takes to achieve some organisational objective. Importantly this does not refer to reducing the time to achieve a tactical objective as this would likely be categorised under Operational below.

Institutional

Institutional value propositions relate to the organisation as an entity. Chief amongst these are value propositions that deliver value to shareholders. Taxational or political issues such as “green” policies also come under this heading.

Cost

Reduction in costs, offsetting costs and cost restructuring all fit under this value proposition category.

Operational

Propositions that deliver positive changes to the operational efficiency of the organisation come under this classification. Included in here would be propositions that provide visibility into the current operational effectiveness of the organisation.

Risk

The removal or mitigation of risk at a corporate, personal or project level falls under this value proposition classification.

Multiple Categories

Specific value propositions that vendors create will break down into one or more MITICOR category. It may be that a value proposition from a vendor relates to only one MITICOR category but it is likely that it will break down into more than one MITICOR category.

Examples

I’ve listed below some examples of vendor value propositions and the MITICOR categories that they break down into.

I wanted to document this classification in this blog because I will refer to them in future REPAMA research. I’ve also noticed during the course of my research that there are some very predictable value propositions/MITICOR element combinations. In a later blog I will try to document these MITICOR “chains” and specifically how they relate to the members of the decision making unit (DMU).

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

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

Whilst carrying out some research recently I realised that I need to arrive at a more granular categorisation of the types or categories of value propositions that vendors use.

And in attempting to do that I stumbled across an interesting read on the ITSMA site entitled Why You Need Three Different Types of Value Propositions. I hadn’t heard of ITSMA before but it appears that they  focus on helping high-tech organisations to market solutions and services. I’ll certainly track them from here on in because I felt that I could have written the blog entry myself as it matches my own personal experience very accurately.

The three types of value proposition that the author refers to are in fact not the same as the categories of value proposition that I’m looking for but more of that in a future blog entry. But, I was also struck by the process that the author Julie Schwartz advocates for developing value propositions see below:

Step 1. Understand the market and clients.

Step 2. Determine your true differentiators.

Step 3. Articulate unique value based on customer need.

Step 4. Quantify value.

Step 5. Elicit internal and external feedback and revise.

Step 6. Collaborate with sales to communicate value propositions.

as again it is similar to our own advice on building propositions in my blog entry from last November here.

1. Understand what the competition is doing

2. Understand your own capabilities and how you are different from the competition (*and change your positioning and messaging if required)

3. Understand where your prospects are still willing to spend money – the funded initiatives

4. Understand what pain is causing the prospect to still spend money – what are they looking to achieve?

5. Create messaging by mapping your own capabilities and differentiation, to the prospect’s pains and their willingness to spend

6. Retrain the sales force with the new focus/messaging

7. Use the right medium to get your proposition in front of the right person in the right organisations

Having said all of that, I do feel that there is a terminological difference between Julie’s value proposition and my own. I think the use that Julie has settled on, and let’s be clear there are no hard and fast defitions for the stuff – it’s a matter of personal preference, is similar, but not identical to some of the elements of what I would refer to as the positioning statement.

Personally, I use the value proposition term in two ways. Firstly, and very generally, the statement of the type of benefit that will be enjoyed AFTER a prospect has become a client.

Examples:

It will reduce the risk of failure

It will deliver projects quicker

It will increase profit

Secondly, the internal strategic marketing deliverable that product marketing/communications individuals are responsible for crafting is a formal definition of a specific proposition to a specific audience.

For this I usually follow a format similar to the one below:

1. A statement of quanitifiable benefit that a specific audience will enjoy AFTER they do business with you

2. An interpretation of what that benefit will mean for the specific audience

3. Proof of where the company has previously delivered this value to a similar audience and what the result was

An example (numbers only to illustrate the sections above):

1) By utilising our technology, mobile telephone operators can roll out new services between 2 to 3 months earlier than traditional approaches.  2) In a very competitive market this provides significant competitive advantage and increased revenues as enjoyed by 3) XYZTelco who we helped to bring a location-based SMS service to market in under 3 months from project inception. This led to them gaining a market leadership position for this service.

Anyway, I’ll revisit the categories of benefit/value that I’m really interested in an an up-coming blog but I thought I’d share this interesting read with you.

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

I’ve completed the first draft of the cloud computing segmentation model upon which we will build our REPAMA studies.

As I’ve mentioned before along my journey to arrive at this model, I’ve found the cloud computing market to have quickly become crowded and confused. This is largely due to the ease at which “traditional” vendors have re-repositioned themselves to catch the cloud computing wave.

The other issue of course is that over time cloud computing will cease to be a new paradigm and will quickly become the way consumers and businesses avail themselves of computing services. So what I’m seeing here is a market in transition where just about every category in traditional software sales will have an offer in the cloud computing space until on-demand models becomes “the norm”.

So I guess it’s really not that surprising to see so many vendors present in the space. But at the same time it is very confusing for legitimate prospects to cut their way through the mass of terminology to then examine vendors and service providers who appear to have broadly identical capabilities and value propositions.  How do they decide the best way to take their first steps into cloud computing? It’ll be interesting to see what our REPAMA studies say about how each of the vendors/service providers’ takes their products to market.

Anyway, I’ve uploaded a set of slides to slideshare.net which I think is probably the best way to make the material available but if anyone wants a copy of the slides please let me know. The slides are embedded below.

As I’ve said before, this segmentation model will undoubtedly develop and change over time as I look in more detail at the marketing efforts of the various vendors involved. The definitions for each of the functional areas are a little woolly right now. But at least I now have a structure that allows me to decide which segments and vendors/service providers I will include in our studies moving forward.

I’d like to once again acknowledge the significant role that Brad Buck, Peter Laird and Christofer Hoff played in helping to form the ideas on market segmentation and the role NIST has played in crystallising definitions on cloud computing and software/platform/infrastructure as a service.

Danny Goodall

Products and vendors included in the segmentation model are shown below. If you represent a vendor below and I haven’t represented your organisation correctly, or if you represent a vendor that isn’t included but should be, please contact me and let me know a little bit about your company and your proposition and where you feel you fit in the segmentation model.

10Gen MongoDB, 3Tera App Logic, Aconex, Advologix, Altor Networks, Amazon EBS, Amazon EC2, Amazon S3, Amazon SimpleDB, Amazon SQS, Amitive, Apache CouchDB, Apache HBase, Appian Anywhere, Appistry, AppJet, AppNexus, AppZero, Aptana, Aria Systems, Aster DB, Beam4d, Beowulf, Blink Logic, Boomi, Box.net, Bungee Labs Connect, Caspio, Cassandra, Cast Iron, Clickability, Cloud42, Cloud9 Analytics, CloudFoundry, CloudStatus, ClusterSeven, CohesiveFT, CohesiveFT VPN Cubed, ColdLight Neuron, Collabnet, Concur, CrownPoint, CTERA, CTERA Portal, DataSynapse, Desktoptwo, DirectLaw, DocLanding, DropBox, Dynamsoft, Dynect, Elastichosts, Elastra, EMC Atmos, Engine Yard, Enomaly Enomalism, enStratus, Etelos, Eucalyptus, eVapt, FathomDB, Fios, Flexiscale, Force.com, Gemstore Gemfire, Gigaspaces, Globus Toolkit, gnip, Google App Engine, Google Apps, Google BigTable, GridLayer, Hadoop, Hosting.com CloudNine, HubSpan, Hyperic, Hypertable, IBM Lotus Live, iCIMS, InfoBright, Informatica iTRICITY, Joyent Accelerators, JungleDisk, K2 Analytics, Kaavo, Knowledge TreeLive, LayeredTech, LiveOps, LoadStorm, LogiXML, LongJump, LucidEra, memcached, Mercury, mezeo software, Microsoft BizTalk Services, Microsoft SDS, Mosso Cloud Files, Mosso Cloud Servers, Mosso Cloud Sites, Mozy, MS Azure Services Platform, MSDynamics, MuleSource Mule OnDemand, NetDocuments, NetSuite, NewRelic, Ning, Nirvanix, Oco, Open.ControlTier, OpenCloud, opencrowd, OpenNebula, OpenQRM, OpenRSM, OpSource, OpSource Connect, Oracle Coherence, Oracle On Demand, Panaroma, Parallels, ParaScale, Parature, PingIdentity, PivotLink, Platform, Qrimp, Quantivo, Questys, rackspacecloud, Redi2, Reductive Labs Puppet, Responsys, Rightnow, RightScale, Rollbase, rPath, Salesforce.com, Scalr, Sertifi, Serve Path GoGrid, SkyTap, SnapLogic, SnapLogic SaaS Solution Packs, SOASTA, SpringCM, Sterna, StreetSmarts, Success Metrics, Sun Grid Engine, Symplified, Syncplicity, Taleo, TerraCotta, Terremark, TIBCO Silver, Tokyo Cabinet, Trigence, Vertica, VMWare vSphere, Vordel, Workday, Workxpress, Xactly, Xero, Xeround, Xythos, Ylastic, Zembly, Zmanda, Zmanda Cloud Backup, Zoho, Zuora, Mezeo Software, Workxpress, Trigence, AppZero, Platform, OneNetwork, SpringSource, Vaultscape

Attempting to classify and compare the various vendors in the various technical segments of the cloud computing market is tough.

And if I’m honest I’m struggling with the shear volume of vendors that apparently have cloud propositions. I find it amazing that so many vendors/service providers have apparently architected and built specific solutions for this space.

But between you and me, I’m not sure that every vendor/service provider now positioned in the cloud computing market has been beavering away producing a specialised solution. Some I’m sure have done that but others have just changed a name or added an adjective or modifier to a product name.

But one thing is for sure, they’ve all changed their marketing!

As I’ve blogged before, the press release boilerplate (“the about…” text that appears at the end of a press release as guidance for editors) is an invaluable tool for marketing analysts such as myself. As evidence, it is the equivalent of the smoking gun or the size 11 muddy footprints left on the dining room carpet in a detective novel.

As vendors evolve so their boilerplate changes. If a vendor started with a good strategy that only needed minor tweaks over time to turn them into a very successful business, so the press release boilerplate is only tweaked in a minor way over time.  But when a vendor is forced to significantly change course due to a lack of traction or success during their history, the changes are faithfully recorded in the evolution of their bolierplate text.

So when the name Cordys popped up in Google this morning associated with cloud computing I took a double-take. I knew Cordys as an early ESB turned BPM/Orchestration vendor, formed by Jan Baan. I obviously missed their re-positioning so I wanted to do a little digging to find out how they made the leap from one to the other. So I fired up my press release, article and archive research tool and this is what I saw.

On January 12th 2009 Cordys was a business process specialist who apparently hadn’t heard of cloud or “as a service” which was faithfully reflected in its boilerplate.

Business process management specialists form strategic alliance – Cordys and Inex establish Cordys BPMS Centre of Excellence in the UK

About Cordys – 12th January 2009

Cordys is a global provider of software for business process innovation. The industry-leading Cordys Business Operations Platform (BOP) consists of a complete suite for next generation Business Process Management (BPMS), Business Activity Monitoring (BAM) and an open, integrated set of tools and technologies including Composite Application Framework (CAF), Master Data Management (MDM) and a SOA Grid. The Cordys platform empowers customers to dramatically improve the speed of change, fundamentally altering the way they innovate their Business Operations to achieve a true customer-centric philosophy. Global 2000 companies worldwide have selected Cordys to achieve business performance improvements such as increased productivity, reduced time to market, higher security and faster response to ever-changing market demands. Headquartered in the Netherlands, Cordys is a global company with offices in the USA, the UK, Germany, China, India and Israel.

But 8 days later that was all changed and the new positioning was reflected in its  boilerplate.

Cordys award winning Process Factory now available as community platform free of charge Web-based application development and BPM accessible to the Open Community.

About Cordys – January 20th 2009

Cordys is a global provider of software for business process innovation and Enterprise Cloud Orchestration. The industry-leading Cordys Business Operations Platform (BOP) consists of a complete suite for next generation Business Process Management (BPM), Business Activity Monitoring (BAM) and innovative SaaS Deployment Frameworks (SDF), delivering a complete Platform as a Service (PaaS) solution. It includes an open, integrated set of tools & technologies including Composite Application Framework (CAF), Master Data Management (MDM) and a SOA Grid. The Cordys platform and its cutting-edge Cloud technology empowers customers to dramatically improve the speed of change, fundamentally altering the way they innovate their Business Operations to achieve a true customer-centric philosophy. Global 2000 companies worldwide have selected Cordys to achieve business performance improvements such as increased productivity, reduced time to market, higher security and faster response to ever-changing market demands. Headquartered in the Netherlands, Cordys is a global company with offices in the USA, the UK, Germany, China, India and Israel.

Now I don’t want to seem to be picking on Cordys unduly as there are many other examples of companies that have re-positioned to catch this wave. I’ve advocated, supervised or instigated similar populist strategies myself in the past and doubtless will do again in the future. Yes, I’m sure that with a provenance as good as Cordys/Baan this must have been part of a much wider initiative involving new product development and long-term strategies. Yes, I know that SOA/Orchestration does have an obvious if somewhat tangential connection to the cloud paradigm. But there was no apparent evolution to cloud, no obvious chain of functionality that led them to become a cloud service provider which makes me a little suspicious.

The issue however is that because it is this easy to become a cloud computing vendor/service provider the market has quickly become incredibly crowded. Until the cloud market starts to take some tangible form that is based on customer need/demand and not just vendor whim and spin, then it is going to make selecting and choosing a cloud or *aaS offer very difficult for legitimate prospects.

So I’ll add Cordys into the ever-growing list of cloud computing vendors and file them under platform services/integration. And when I get round to tackling that section of the REPAMA study, we’ll see how Cordys’ offer stacks up.

Danny  Goodall

As mentioned earlier in these pages I’m documenting my quest to arrive at a market segmentation model of the cloud computing market. This will allow me to perform a series of REPAMA competitive marketing studies into various vendors in the cloud computing space. I’m uncovering more and more interesting research as I go and one such piece is described below.

The smart people at NIST (The US Governmental agency responsible for something or other – standards I think) have released some interesting work on cloud computing. Aimed at reaching a common set of definitions around cloud computing and its use cases, but recognising that these will change over time, their work can be found here.

I’ve reproduced some sections below because I think they add something to my quest to segment the cloud computing market. That said, I think they’ve omitted, perhaps consciously, an important characteristic and that is the commercial arrangements around cloud computing – namely its pay per use nature.

Anyway here goes:

A Definition of Cloud Computing:

Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential characteristics, three service models, and four deployment models.

Essential Characteristics of Cloud Computing

On-demand self-service. A consumer can unilaterally provision computing capabilities, such as server time and network storage, as needed automatically without requiring human interaction with each service’s provider.

Broad network access. Capabilities are available over the network and accessed through standard mechanisms that promote use by heterogeneous thin or thick client platforms (e.g., mobile phones, laptops, and PDAs).

Resource pooling. The provider’s computing resources are pooled to serve multiple consumers using a multi-tenant model, with different physical and virtual resources dynamically assigned and reassigned according to consumer demand. There is a sense of location independence in that the customer generally has no control or knowledge over the exact location of the provided resources but may be able to specify location at a higher level of abstraction (e.g., country, state, or datacenter). Examples of resources include storage, processing, memory, network bandwidth, and virtual machines.

Rapid elasticity. Capabilities can be rapidly and elastically provisioned, in some cases automatically, to quickly scale out and rapidly released to quickly scale in. To the consumer, the capabilities available for provisioning often appear to be unlimited and can be purchased in any quantity at any time.

Measured Service. Cloud systems automatically control and optimize resource use by leveraging a metering capability at some level of abstraction appropriate to the type of service (e.g., storage, processing, bandwidth, and active user accounts). Resource usage can be monitored, controlled, and reported providing transparency for both the provider and consumer of the utilized service.

Service Models:

Cloud Software as a Service (SaaS). The capability provided to the consumer is to use the provider’s applications running on a cloud infrastructure. The applications are accessible from various client devices through a thin client interface such as a web browser (e.g., web-based email). The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, storage, or even individual application capabilities, with the possible exception of limited user-specific application configuration settings.

Cloud Platform as a Service (PaaS). The capability provided to the consumer is to deploy onto the cloud infrastructure consumer-created or acquired applications created using programming languages and tools supported by the provider. The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, or storage, but has control over the deployed applications and possibly application hosting environment configurations.

Cloud Infrastructure as a Service (IaaS). The capability provided to the consumer is to provision processing, storage, networks, and other fundamental computing resources where the consumer is able to deploy and run arbitrary software, which can include operating systems and applications. The consumer does not manage or control the underlying cloud infrastructure but has control over operating systems, storage, deployed applications, and possibly limited control of select networking components (e.g., host firewalls).

Deployment Models:

Private cloud. The cloud infrastructure is operated solely for an organization. It may be managed by the organization or a third party and may exist on premise or off premise.

Community cloud. The cloud infrastructure is shared by several organizations and supports a specific community that has shared concerns (e.g., mission, security requirements, policy, and compliance considerations). It may be managed by the organizations or a third party and may exist on premise or off premise.

Public cloud. The cloud infrastructure is made available to the general public or a large industry group and is owned by an organization selling cloud services.

Hybrid cloud. The cloud infrastructure is a composition of two or more clouds (private, community, or public) that remain unique entities but are bound together by standardized or proprietary technology that enables data and application portability (e.g., cloud bursting for load-balancing between clouds).

I think this is a really nice and compact definition of cloud computing it characteristics and use cases. I particularly like the notes on deployment models which I certainly want to incorporate into my cloud computing market segmentation.

Kudos to Peter Mell and Tim Grance of NIST!

Danny Goodall