Nov 19, 2013

Change hurts. But, it shouldn't be painful.

One of the major issues faced by organizations with respect to the adoption of cloud computing is how to change in order to be able to take advantage of all the benefits. This challenge is not insurmountable. In fact, we've overcome such challenges at least twice before, and even more often than that if you're an IT or telecom lifer.

If you're reading this, it's probably because you've purchased something online in the past few years. It wasn't always this easy to buy from Amazon or eBay and there was a time that online transactions were viewed with suspicion. Of course, that has been replaced with a wildly positive approach to e-commerce; some analysts are calling a record volume of transactions for this coming Black Friday.

What we're talking about here is the introduction of game changing business models and technologies: distributed computing; e-commerce; virtualization; security; outsourcing. Each of these has caused major upheaval among the brightest stars in business and on the Internet and organizations that have adopted these models and technologies all undergone a period of adjustment. And yet they all came through on top.

Cloud computing is no different. It's one of those things that scare companies because of the unknowns. Security almost always tops the list of concerns and barriers to adoption in surveys. Of course, security and governance is personal to an organization--there is no one-size-fits-all--which seems to intimidate potential adopters. Early adopters are learning that security is manageable and is improving steadily (rapidly) much as security improved in the early days of the web and e-commerce.

And, regardless of what the top dog in IT is called--CIO, CTO, VP, CEO--management is facing these same challenges today when it comes to adapting the organization to a new way of consuming IT resources. Eventually, if not already, this will become a competitive advantage; the flexibility and agility afforded by cloud computing will make leaner and meaner competitors. As with all competitive advantages, though, organizations that make the move earlier will reap the greatest benefits.




Sep 23, 2013

Is Rogers taking aim at Bell and Telus?

Seems that Rogers is taking a page from Bell and Telus' playbook... While Bell and Telus were busy trying to out position each other in the data centre market, Rogers picked up 3 data centre service providers: BlackIron earlier this year, and now Pivot and Granite.

What's interesting here is that Rogers instantly gains a significant foot hold in the enterprise data centre and hosting market but also gains cloud computing capabilities via the Granite acquisition. One wonders if Rogers is moving into the enterprise managed services market and making a play for the lucrative long term hosting and services contracts that Bell and Telus have enjoyed for so long.

Recall that both Bell and Telus launched their cloud infrastructure products last year, which were really underwhelming as product offerings, and, as far as anyone can tell, haven't really gained much traction in the market. Probably because their respective IaaS offerings were marketed to increase demand for that oh-so-precious-commodity-with steadily-eroding-profit-margins: bandwidth. How's that working out now?

The questions now, are:

  • Will Rogers use the same tactic and try to use the DC and IaaS offerings to drive bandwidth sales?
  • Will Rogers use it to promote and grow a user community that will serve the ever-growing-with-steady-margins mobile market?
  • Will Rogers use this foothold to drive managed services sales?
Time will tell. But the Telecom market is heating up!

Apr 11, 2013

Don't cut, innovate!

The Royal Bank of Canada (RBC) has been in the news lately because of a planned layoff of a number of its IT staff. The kicker is that, before they leave, they have to train their replacements and their replacements are supposedly "temporary foreign workers" who will eventually leave Canada and go back to their country of origin (I'm not being coy; I want to keep this post a bit more general than what's been reported in the media). This, of course, has caused an uproar.

I teach a course on E-Business/Managing e-Commerce at McGill University and one of the topics we discuss in class is outsourcing and its relative advantages/disadvantages, costs/savings, etc. I've worked for an outsourcer before. I also advocate it under the right circumstances. Maybe there is a part of your operations that is not core to your business. An example of this might be server management, or some other aspect of your business for which you have no expertise such as security, or a new regulatory requirement that can be addressed by a highly specialized firm.

So, why am I on this soapbox? Because this is going to eventually become an issue for organisations who are taking or will take advantage of cloud computing and their service providers. At some point, a CIO, CFO, or VP of Finance will realise that there are cost savings associated with cloud computing and decide, "Well, we don't need an IT department of [insert number of IT staff here] people anymore, let's cut [insert number of employees to lay off here]."

This is, without a doubt, a knee jerk reaction (albeit a difficult one according to those doing the cutting) and absolutely the wrong decision. Yes, some organisations justify the cuts based on the bottom line and revenue promises to futures markets, and sometimes this is justified, but it should not be the first choice by any stretch of the imagination.

Those employees, who know your core business, have been trained by you, and are more than likely competent individuals, should be retasked. That's right, not only should you find them comparable work, but give them a goal to help create value for your customers and your organisation; these individuals no doubt have some idea(s) how to improve some aspect of your business.

[Aside: Incidentally, RBC has backpedaled and announced publicly that they would offer comparable work to the individuals affected by this latest round of outsourcing.]

The US and Canada are suffering from a drain on jobs that are leaving for cheaper climes. How do we continue to maintain living standards when decent paying jobs are being cut? The answer is to promote innovation.

The 'O' word is greatly feared by employees. It is humiliating, upsetting, and demoralizing to be 'let go', or to be told that 'the business has decided to go in a different direction' and that 'your services are no longer required'. Before getting to that point, ask them: what can you do to help the organisation; do you have any ideas that can improve our business; are our processes as efficient as they can be; can you take on an innovative new project? I think you'd be surprised by the answer.

Don't cut, innovate!

Mar 15, 2013

Megaupload and Equinix Make History in Canada (?)

Megaupload and Equinix are in the news today. Apparently the Attorney General of Canada applied to the Ontario Superior Court for an order requiring them to turn over "cloud servers" on behalf was US Government (as reported by Chris Bennett of Davis LLP on Mondaq.com).

What's not clear to me yet is what is actually meant by "cloud servers" and how this could impact cloud computing in particular. We all know how the term "cloud" has been used repeatedly in cases where the service is not actually cloud computing (see my previous posts on the topic of cloudwashing and other posts on nomenclature). Are the servers actually IaaS and fit the NIST definition of cloud computing or are they simply hosted web servers and databases?

It appears that the judicial system could use some clarification as to what cloud computing actually is and the difference between cloud computing and cloud based services.

More to come as this story develops.

Feb 20, 2013

Can we talk about SaaS for just a sec?

Don't know about you, but I've been inundated by emails, banner ads, sponsored links, LinkedIn group updates, tweets, and Facebook ads all announcing that some product is now available in a SaaS format. Yes, even by word-of-mouth. It occurred to me that many of these companies may not even know what the as-a-service moniker even means.

I recently sat in on a cloud-101 type presentation by Dan Koffler and, in his presentation, he discussed the interrelationship between IaaS, PaaS, and SaaS. To sum it up, IaaS supports both PaaS and SaaS implementations, and PaaS supports SaaS implementations. This brings up an interesting point: does SaaS conform to the NIST standard definition of cloud computing? Here's an excerpt of the NIST definition:
Software as a Service (SaaS). The capability provided to the consumer is to use the provider’s applications running on a cloud infrastructure 2.
 The footnote at the end of that sentence reads:
2 A cloud infrastructure is the collection of hardware and software that enables the five essential characteristics of cloud computing.
And, as we all know, one of the essential characteristics is "Rapid elasticity". The fact that the upper service model(s) are served by the lower one(s) indicates that any true SaaS implementation would necessarily be elastic. This is the true test of whether a product is SaaS or an ASP (application service provider) implementation where the software is simply hosted on a server.

So, the next time a vendor pitches you on a SaaS product, ask them this question: "Does the product's resources (i.e., compute power, RAM, storage) scale automatically as my organization reaches predetermined usage thresholds (e.g., % utilization of resources or number of users)? Or do I have to call you to increase these resources?" If the answer is "Yes," and "No," in that order, it's a true SaaS implementation. If the answer is "No," and "Yes," it's ASP and you should definitely ask what the SLA is on the vendor completing the request.

Whatever the answer, I assure you that the answer to this question will be telling. Whether the sales rep knows the answer or not will interesting in and of itself.

Feb 12, 2013

How to Win in Cloud Computing

And the winner is... 

OK, we're not there yet. But, it's becoming obvious that the cloud computing market is heating up: there's been some downward pressure on IaaS pricing because of the number of competitors and, more importantly, because of the competition between Amazon and Google. Of course, this is to be expected because Google is trying to steal market share and AWS is trying to protect its share. Can we expect the same in the SaaS market? Probably, given that there has been a proliferation of SaaS companies (cloudwashing aside, see my previous post) in the last couple of years,. But then, there doesn't seem to be an enormous amount of overlap in the types services offered (yet?) because of the variety of solutions that are available for conversion to SaaS so we may not see the same price pressure as in the IaaS market.

That said, I don't think that the winner will be decided by its implementation of IaaS: the winner will be decided by PaaS. The reason for this is that every successful business model has had a strong developer community. Consider that the same thing happened with browsers and operating systems, and is currently happening with smartphones: smartphone leaders have stronger developer communities while weaker/less popular smartphones have fewer; such is the difference between iPhone and Blackberry. Granted, the gap between iOS devices and BB devices has other reasons as well, the point is that if BB had a stronger developer community than the iPhone, it would have won out earlier and not have to jump through hoops like it's doing right now.

Mobile providers should really take the hint here. Telcos are fighting for mobile market share but haven't really clued in that what attracts customers is not the phones themselves because every carrier has roughly the same phones for sale. What's really attracting them is the cool factor of what they can do with those phones. If the carriers really wanted to attract customers, they'd open up development platforms/PaaS environments for developers to create apps for free and then, when the app goes live, charge the developers to host their apps or collect ad revenue in exchange for free hosting. Like AT&T has done. Instead, most telcos and mobile carriers, are ignoring the PaaS possibility and looking to commoditized services with slowly eroding margins, like cabled connectivity, or to be me-toos in an almost saturated IaaS market to help grow their business.

There is no doubt that AWS is leading the way with $3.8B revenues projected for 2013. This definitely defines a leader in the market and AWS is certainly running away with the IaaS market. But Amazon did not stop at IaaS. It created a constellation of products built around EC2 to facilitate developer adoption. And that is why AWS is way ahead in the market.

It remains to be seen whether competitors in the PaaS market can steal away market share from AWS:
There are many more questions that we can list here, and certainly more than there are answers. Give it a year or two. Then we'll start to see some clear(er) patterns in the PaaS market.