Frequent Computing Customers Need Local Providers: Where are the "Cloud Team" and "Cloud Alliance" Partner Programs?

flightmap.PNGHello from Dubai!  I arrived a few days ago for customer visits across the region including UAE, Qatar and Bahrain.  Although I’ve traveled extensively, this is my first trip to the Middle East. 

As a frequent flyer (both in terms of travel and airline loyalty), I looked first to my preferred airlines when I booked my flights to the region.  Neither of them (yes, I fly two airlines regularly which suggests that I’m not all that loyal) provided service to my destinations.  So, I looked for a partner airline – one that is part of my preferred airlines’ networks.  I went with Emirates which not only serves the Gulf States I was planning to visit, but enabled me to stay within network and collect my frequent flier miles. Why do I mention this?  Well, I have been thinking about that model of a “Star Alliance” or a “Skyteam,” and how it could apply to service providers of other kinds. 

About a week ago I got a call from a Forrester client who had read my report on cloud computing and the locations of the capacity.  This particular client was looking for a cloud provider who offered capacity in several regions.  Specifically, they were looking for capacity in the UK, South Africa, India, Saudi Arabia, Sweden, and Australia.   We spoke about some of the global cloud providers: IBM, HP EDS, Fujitsu – but none of them could serve all of the local markets my client was interested in -- at least not with local capacity.  Each of these providers does have data centers in multiple countries but they don’t currently partner to serve markets where they have no presence.  From my client's perspective, it wasn’t possible to single source his capacity needs with in-country resources.  Unfortunately, I wasn’t much help at the time as I wasn’t familiar with local cloud providers in all of the markets of interest.  However, I am more knowledgeable now thanks to my current trip.

When in Qatar a few days ago I met with MEEZA, a local cloud services provider.  They provide data center co-location and managed services as well as software-as-a-service offerings primarily to the Qatari market.  In all of the Gulf States, there are small cloud providers developing the markets for on-demand infrastructure and software services.  The telecom operators are looking into it but the early movers are smaller companies: MEEZA in Qatar, Injazat in Abu Dhabi, and eHosting DataFort in Dubai are a few.   

During the conversation with MEEZA, I asked about the question my client had posed about local service providers.  My thought was: when the big players have a client that wants capacity in Qatar, who will they call?  This got me thinking.  If airlines can create networks of partners and “code-share” flights operated by these partners, why can’t cloud services providers do the same thing?  Where’s the “cloud alliance” or the “cloud team?”  The model is simple: Create a partner network to provide services locally where customers need them – and many of them do need local services in order to comply with local regulation. 

When I posed the question to the folks at MEEZA, they agreed but indicated that price negotiation had been an obstacle.  Costs were different – broadband is cheaper in Europe but energy more expensive; whereas here energy is cheap and broadband expensive.  As they saw it, price differences made it difficult to partner.

But, why do partners have to agree on price if they are serving different markets?  In the case of the airlines, the price of the same flight purchased from two different code-sharing airlines is often different: a Delta ticket from San Francisco to Paris is priced differently than the Air France ticket, even though in this case it is exactly the same flight.  The price differences reflect differentiated supply and demand factors for the two airlines.

In the case of the cloud, a customer could and would pay differentiated prices across different markets.  Price isn’t the issue.  The customers want a single source, ideally similar infrastructure, common admin consoles, etc.  As a loyal “cloud team” member, they would look for a provider who is part of their network.  Imagine how much easier that would be when expanding into a new market and looking for a provider. 

Some vendors have started partnering but I have yet to see a program like the airlines which brings together airlines that serve specific local markets. I predict that “frequent computer” or “computing rewards” programs will be the next clouds to form on the horizon.  What do you think?

Comments

already seen a hosting provider offering rewards points

tried to find it in my notes but couldn't.
I'd also be careful about throwing the cloud word around. Sounds like everything is cloud. Are you talking about virtual machines as a pay-per-use service?

Partners not rewards

Thanks for your comment, Frank. While "rewards" are part of the frequent flier model, they are not the part to which I was drawing the parallel. More important is the network of partners that facilitates choice of service providers in markets not served by the one with whom the customer normally does business.

As for which "cloud" services, the same concept of a partner network would apply to any flavor: IaaS, PaaS or SaaS. I didn't see the need to specify as I was referring to the on-demand business model, and the need for offering services locally, and not the offering itself.

spot on

Jennifer, you bring up some very good points. As part of the Cisco Data Center practice team, we are beginning to see our customers demanding the same global coverage. Interestingly some regional service providers have also asked us to help them expand their market globally into same-speaking countries.

At this point we are at the initial stages of helping our SPs building out their cloud infrastructures.

It may yet take a trusted vendor of service providers around the world to bring them together in a cloud star alliance program.

On a separate note, I read in your bio that you have done IaaS research for LATAM. I would be interested in your work there and wondering if you can point me to some of your market data analysis for that region, especially Brazil?

Omer Ansari

IaaS around the globe

Thanks for your comment, Omer. I'd be happy to speak about IaaS adoption in Brazil. Please contact inquiry@forrester.com and ask for a meeting.

MEEZA

I am not sure what story MEEZA sold you, but they continue to fail in Qatar. they have yet to sign a single client outside of their shareholder's companies. This is a business that's given to them by default. Two years and they have yet to operate in positive cash flow. Their clients are frustrated and very unhappy. They have one of the biggest employee turnover in the country. Management has no experience in managed services and sales doesn't align with operation at all levels. Over priced service without meeting SLAs.

Thanks for the comment

I appreciate the comment. I spoke to MEEZA about 8 months ago. At the time they didn't have reference customers but indicated that they would soon. I do tend to give the benefit of the doubt to start ups, and they didn't appear to have much competition in their market. I'd be interested in hearing about other providers in Qatar or from other countries who are serving the Qatar market. Qtel also offers managed services but I don't know of reference customers there either. I'd love to get more details on the market in general. Feel free to contact me.

MEEZA

The problem at MEEZA is the team lacks the managed services experience. The sales and operation team come from non-managed services background. The VP of sales is focused on capturing any business in any way possible, ethical or not, just to maximize his personal gain. He is contracted for 3 years and makes commission on the total revenue of the company.
The CEO doesn't have any decision power and the operation VP has been recently fired for lack of experience and trust.
I believe that the company is heading to self destruction due to the fact that it is managed and ran by expats that are in the country on short term and in it for deep pockets (i.e. VP of sales).
I would recommend Qtel since it’s a local company, managed by Qataris and has a lot to offer being the local ISP.