I will be joining Forrester's Tweet Jam on Cloud Computing today to add some commentary on the differences we're seeing in attitudes toward "cloud" as a delivery model and in adoption across countries. Interest and adoption differs significantly across countries. While in most countries the primary drivers of both Infrastructure-as-a-Service (IaaS) and Software-as-a-Service (SaaS) are around speed and flexibility, in others the primary drivers are cost. Interestingly, in India and Russia, the No. 1 driver for IaaS is "improving disaster recovery and business continuity." IT decision-makers in those markets prefer to rely on those focused on delivering infrastructure than on their own datacenter, for certain projects.
As for inhibitors, the main concerns are pretty common across countries: security and privacy issues, integration with existing infrastructure and applications, and uncertainty around to total cost of ownership. While many are driven by the desire to move from fixed cost to rotating costs (capex to opex), they remain concerned about the total costs in the long-run.
Have questions about cloud computing and the top challenges and opportunities it presents to vendors and users? Then join us for an interactive Tweet Jam on Twitter about the future of cloud computing on Wednesday, September 15th, 2010 from 11:00 a.m. – 12:00 p.m. EDT (17:00 – 18:00 CEST) using the Twitter hashtag #cloudjam. Joining me (@hkisker) will be my analyst colleagues Mike Cansfield (@mikecansfield), Pascal Matzke (@pascalmatzke), Thomas Mendel (@drthomasmendel), and Stefan Ried (@stefanried). We’ll share the results of our recent research on the long term future of cloud computing and discuss how it will change the way tech vendors engage with customers.
Looking through the current industry hype around the cloud, Forrester believes cloud computing is a sustainable, long-term IT paradigm. Underpinned by both technology and economic disruptions, we think the cloud will fundamentally change the way technology providers engage with business customers and individual users. However, many customers are suffering from "cloud confusion" as vendors' marketing stretches cloud across a wide variety of capabilities.
To help, we recently developed a new taxonomy of the cloud computing markets (see graphic) to give vendors and customers clear definitions and labels for cloud capabilities. With this segmentation in hand, cloud vendors and users can better discuss the challenges and benefits of cloud computing today and in the future.
Recently, I published a report about a small software-as-a-service (SaaS) vendor, Dimdim, which is having success in the crowded Web conferencing market. Like many small vendors, Dimdim provides a free service tier, generously allowing up to 20 participants into the free meeting, to help drum up business. The report, though, did not simply highlight the number of users that Dimdim has captured in four short years of existence -- over 5 million -- but also its success in attracting partners like Intuit, Novell and Nortel CVAS. Why? For new vendors entering crowded markets, attracting partners is vital for two reasons:
Partners open doors to new markets. In crowded markets, incumbent vendors and new entrants jostle to serve customer needs. For the new entrants, the customers that can be wrangled through media hype and analyst buzz is minimal. Mass appeal comes from firms with strong working relationships with a range of buyers in a number of markets -- e.g., oil & gas, healthcare, government -- embracing a small vendor's offering and introducing it to their clients.
This week, I was at the Microsoft Worldwide Partner Conference in Washington, D.C., and it was all about THE CLOUD. Now, many colleagues argue that Microsoft will be the second-to-last major vendor to show a 100% cloud commitment, saying that “it’s too embedded in its traditional software business,” “it doesn’t understand the new world,” and “it’d be scared of cannibalizing existing and predictable maintenance revenues.” But I remember Stephen Elop, president of Microsoft Business Systems, tell me with a mischievous grin that he’ll probably earn more money from Exchange Online than the on-premise version — “firstly, it’s mainly new business from other platforms like Lotus Notes, and second, I even generate revenues by charging for things like the data center buildings, the infrastructure, even the electricity I use.” That was in Berlin last November. I suspected then that Microsoft did get it but was just getting its platform ready. This week, I am convinced — Microsoft is “all in,” as they say.
And at the Microsoft Worldwide Partner Conference, it was driving its partners to the cloud as aggressively as any vendor has ever talked to its partners at such an event. All of the Microsoft executives preached a consistent mantra: “MOVE to the cloud, or you may not be around in five years.”
Microsoft’s cloud-based Business Productivity Online Suite (BPOS) is already being promoted by 16,000 partners that either get referral incentives for Microsoft-billed BPOS fees or bundle it into their own offerings (mainly telcos). There are nearly 5,000 certified Azure-ready partners. This week, Microsoft turned up the heat with these announcements:
In discussions on cloud computing, I often talk to architects who have been told to create a "cloud strategy." This sounds appropriate enough, but there’s a devil in the details: When the task is "create a Technology X strategy," people often center strategy on the technology. With cloud, they aim to get a good definition of pure cloud and then find places where it makes sense to use it. The result is a technology strategy silo where cloud is placed at the center and usage scenarios are arranged around it. The problem with this is three-fold:
Considering the full business dynamics of any given usage scenario, there is a wide continuum of often strongly competing alternatives to pure cloud (including cloud-like and traditional options).
The rapid pace of market development means that business value equations along this continuum of options will keep changing.
Your business needs integrated strategy for many technologies, not simply a siloed cloud strategy.
Many product strategists are, like me, old enough to remember software stores like Egghead. Those days are gone. Today, consumer packaged software represents a very limited market – the software aisle has shrunk, like the half-empty one at the Best Buy in Cambridge, MA (pictured).
Only a few packaged software categories still exist: Games. Utilities and security software. And Microsoft Office – which constitutes a category unto itself. Some 67% of US online consumers regularly use Office at home, according to Forrester’s Consumer TechnographicsPC And Gaming Online Survey, Q4 2009 (US). Office is the most ubiquitous – and therefore successful – consumer client program aside from Windows OS.
Office 2010, Microsoft’s latest release, will continue to succeed with consumers. On the shoulders of Office 2010 rests nothing less than the defense of packaged software in general. It’s also the most tangible example of Microsoft’s Software Plus Services approach to the cloud – a term that Microsoft seems to be de-emphasizing lately, but which captures the essence of the Office 2010 business goal:
To sell packaged client software and offer Web-based services to augment the experience.
Bob Calderoni and Tim Minahan, Ariba’s CEO and CMO respectively, explained their vision for the future of supplier networks at the company’s Ariba Live customer event this week. The basic concepts, of a B2B community with value-adding services for sellers, such as prospect discovery and multi-customer e-invoicing, is one I’ve advocated to network providers for a long time, including in my report of internetwork interoperability (Enterprises Should Push Supplier Networks To Deliver Interoperability). The community concept is certainly fashionable at the moment, with lots of business-to-business (B2B) technology vendors trying to match the success of Facebook, LinkedIn, Twitter, and the like. The big question is whether Ariba can achieve the universal reach that the commerce cloud will need if it is to deliver value to its members.
Social media consumers don’t seem to be worried by monopolies. As my daughters tell me, people of their age have to be on Facebook to know what’s going on. There’s no point using other services like MySpace or Bebo (or, for older readers, Yahoo Groups, Geocities, Friends Reunited, and their equally overhyped predecessors), because everyone uses Facebook, and the community only works if everyone’s in it. It’s the same with B2B eCommerce — supplier-side members want to know about all the relevant parties (i.e., RFX’s), and party organizers (i.e., buyers) want to publish the invitation in one place yet still reach all their potential friends. In practice, this means the community must either be:
a) a broad stratus formation covering everything,
The rise and rise of cloud has been dominating the headlines for the past few years, and for CIOs, it has become a more serious priority only recently. People like cloud computing. Well - at least they like the concept of cloud computing. It is fast to implement, affordable, and scales to business requirements easily. On closer inspection, cloud poses many challenges for organizations. For CIOs there are the considerable challenges around how you restructure your IT department and IT services to cope with the new demands that cloud computing will place on your business - and often these demands come from the business, as they start to get the idea that they can get so many more business cases over the line for new capabilities, products and/or services, as they realize that cloud computing lowers the costs and hastens the time to value.
5:30am, the family sleeps and it’s time to prepare – today is Analyst Day in Frankfurt. I’m on the road 2h45min before the event starts (1h20min should be sufficient) but sometimes the traffic is terrible. Last week I missed a flight because the highway was completely closed after an accident and I had to give up after 3h driving for nothing. When the concern of missing an appointment slowly turns into certainty, these are the moments that cost me some of my (remaining) hair.
(Of course) I arrive much too early, but other analysts are already there (probably they don’t sleep at all). Plenty of time to look through my presentation again for some final adjustments and for some small talk with customers that arrived early.
1min before the kick-off, I make the last slide changes and load it to the presentation laptop. Another analyst colleague goes first. I have seen some of the slides a hundred times and look around at the faces of the attendees. For most, it’s the first time they see e.g. our market sizing and forecasting data, and they make hectic notes into their notebooks. They don’t know yet that we will distribute all slides after the event. I’m getting a bit nervous, but I’m used to it. When I'm not nervous any more before a presentation, it’ll get boring for me and the audience, and I should probably do something else.
Federal CIO Vivek Kundra’s recent presentation to the Brookings Institution outlined how the US administration is moving to a “Cloud-first” approach to consolidating the US government technology infrastructure. Since the US government is the largest buyer of information technology in the world, spending over $76 billion supporting over 10,000 systems, we can be sure that a Cloud-first policy will have a major impact on technology vendors and the services they offer - not only to the US government but to all IT buyers.