Interop 2012: The 5-minute Cisco cloud news round-up

It’s no surprise that Cisco is making a lot of news at the networking industry’s biggest show of the year, Interop Las Vegas. And, yes, a lot of it is enterprise-focused, but there are a few relevant news nuggets for cloud providers:

Cisco carves its own SDN path: While the rumor mill has been churning for weeks that Cisco would make a software-defined networking (SDN) play, many doubted that it would embrace OpenFlow (because, after all, where’s the money in that?). In the first keynote of the show, Cisco CTO Padmasree Warrior unveiled Cisco’s own vision of SDN, which it calls the Cisco Open Programmable Environment (COPE). But COPE’s core demographic right now may not be enterprises, but rather cloud providers, according to Andre Kindness, an analyst at Forrester Research.

Cisco Cloud Connect: Also of potential interest to providers is an upcoming software update to the ISR G2 and ASR 1000 routers, Cloud Connect (not to be confused with dozens of other vendors’ products and a trade show that share the same name or Connect Cloud, a feature on Cisco’s Linksys home routers).

Network World reports:

“Cloud Connect will include software modules called Cloud Connectors. Cloud Connectors will include Cisco applications such as Hosted Collaboration Services and ScanSafe, a SaaS-based Web security service. Cloud Connector software will also allow software developers to write applications to Cloud Connect to expand its capabilities, Warrior says.

Cisco will also soon unveil a product for connecting private enterprise clouds to the public cloud to create hybrid implementations, Warrior says.

The product is designed to maintain the identity, security and policies of workloads as they move form a private cloud into the public cloud.”

The ISR is obviously targeted at enterprise IT buyers, so it’s clear this is an enterprise branch-office play. But the ASR 1000s are a definitely service provider-grade machine, so what’s going on there? We’ll have to wait until May22 to find out.

Customers prefer root canals to cloud networking: Cisco released some interesting (if not entertaining) survey results in a report called the 2012 Cisco Global Cloud Networking Survey, revealing some of the networking issues that are keeping customers from adopting (or at least fully embracing) cloud services. Cisco found:

• Almost two in five (39 percent) of those surveyed said they dread network challenges associated with private or public cloud deployments so much that they would rather get a root canal, dig a ditch, or do their own taxes.
• At the same time, nearly three quarters (73 percent) feel they are confident with enough information to begin their private or public cloud deployments. However, the remainder (27 percent) feels they have more knowledge about how to play Angry Birds than the steps needed to migrate their company’s network and applications to the cloud.

Mobile cloud services: A $500 billion opportunity

Cloud adoption isn’t a one-act play. We can expect adoption trends, deployment models and innovation in the cloud to evolve over time — reshaping how and why users tap cloud services.

In the opening chapters of this story, customers approached cloud with a lot of interest and healthy skepticism.  The first phases of cloud adoption have been driven by cost savings and flexibility, and early cloud services were pretty no-frills — rent compute cycles, pay per hour and turn it off when you’re done. Meanwhile, cloud security concerns lingered.

In light of all this, it’s unsurprising that early adopters subscribed to cloud services primarily for testing and development and that SMBs were its fastest adopters.

But the cloud is maturing and so too are the service opportunities available to cloud providers. Midsize Infrastructure as a Service (IaaS) providers are hitting the SMB market with custom cloud services, and larger cloud providers are also looking for advanced, enterprise-friendly features to set themselves apart from Amazon.

And the next frontier? Behavior-based mobile services — a $500 billion opportunity, according to our resident cloud and networking expert Tom Nolle.

“If you try to use the cloud to do better what we already do, the only place where we’re going to make alterations is only where there are egregious inefficiencies,” Nolle told me recently. “But if we look at the cloud totally differently and say, ‘What makes the cloud different is that we’re in it,’ I think that’s a powerful concept.”

Mobile operators know a lot about their customers’ behavior — where they go, what they watch, who they communicate with and how they use the Internet to enrich their lives. Though what if operators could develop a Siri-like service that doesn’t wait for the user to ask it a question, but rather actively suggest custom services to the user, based on his or her ever-changing location and known behavior?

It takes a lot of juice to crunch all that data — and to do so dynamically, as a customers moves from home to work to shopping downtown. That’s why cloud is the best processing engine for the job, Nolle says.

In a special two-part tip series, Nolle explores both the service opportunity for combining cloud and mobile behavior as well as what needs to happen on the back end to make it a reality.

Three meetings to explain cloud to customers? Yes, it’s that bad

Although I hadn’t realized it right away, the idea for last week’s news story about how providers struggle to explain (but not over-explain) cloud computing to customers was really a long time in the works.

People don’t argue about what a router is. They don’t disagree about the definition of a virtual desktop. Nobody takes creative license with the concept of CRM. But when it comes to the vocabulary for cloud computing, all bets are off.

I guess I could complain about it — except that I already did (oops). But what has continued to eat away at me  was how much time I spend getting cloud providers (and to a lesser extent their suppliers) to explicitly define what they mean by “(public, private, virtual private, hosted, fill in the blank) cloud” because those terms have almost become subjective. Maybe subjective isn’t the best choice of words. There are official-ish definitions out there. But for some providers, their usage is sort of… optional.

Trust me, I really don’t want to get into these discussions. I actually hate the whole “Well, does it have an orchestration layer? Is it self-provisioning? What’s the billing model? How is this different from dedicated hosting?” dance when really the more interesting thing to talk about it is what this service actually does. But I’m telling you, it just happens.

Continued »

Why are telecom companies the red-headed stepchildren of cloud?

For the record: Lest the blog title gives you the wrong impression, I’m not one of those crazy people who think gingers have no souls. Telecom companies? Another story (just kidding — it was too easy). There are some pretty awesome gingers out there (and some pretty innovative telcos), but the “red-headed stepchild” expression seemed fitting when looking at market’s attitude toward carrier cloud services.

I had the good fortune of chatting a few weeks ago with Forrester’s James Staten, vice president and principal analyst of all things cloud (and apparently, based on his head shot, another awesome ginger), about some recent trends in the market. During our conversation, we started talking about telcos in the cloud space, and he pointed out something from some of his recent research that I’d heard anecdotally several times:

“When we ask enterprise customers, ‘Who would you buy cloud services from?’ at the bottom of the list are telcos, and just above that are the hosting companies, so when it comes to getting cloud services, the brands of AT&T, Verizon or any of these companies might be a detriment.”

In case you’re wondering, at the top of the list were hardware/software providers and systems integrators.

This comment was in the back of my mind during a recent interview I did with AT&T, following the updates made to their IaaS product, Synaptic Compute as a Service. We have a full Q&A coming next week right here, though there was one question that didn’t quite make the final editing cut (for space reasons) but that seemed too interesting to leave out. I asked AT&T’s John Potter, vice president of As A Service Solutions, what he thought about this apparent stigma.

Continued »

Cloud commandment No. 1: Know thy customer

It sounds pretty obvious, right? Whether you’re trying to close a sale or just get a foot in the door, of course you should understand the requirements and limitations of your specific customers and market segment. As well-seasoned channel vets know, this is especially true in the SMB market. And with SMBs expected to be at the start of the cloud adoption curve, this dogma should be top of mind for cloud providers.

But for some longtime hosting providers and network operators trying to get a foothold into SMB cloud services, this mentality is somewhat of a lost art, according to John Zanni, vice president of service provider marketing and alliances at Parallels, which hosted its annual customer summit last week in Orlando. After years of selling what eventually became commodities — bandwidth and rack space — some of these providers must now revisit their sales and marketing strategies because remaining competitive is no longer just about price and technology, Zanni told me in a recent phone interview.

“To be able to continue growing and profiting, you need to be able to offer services beyond those horizontal services,” Zanni said. That means focusing on specific segments within the SMB market, which “is just an expertise that most of [those providers] did not build,” he added.

Continued »

Polycom wholesales ‘Video as a Service,’ but what’s in it for cloud providers?

Meet Polycom, the network operator and wholesale cloud provider… wait, what?

Polycom. Yeah, you know them. They make the magic boxes that let you join a mobile video conference while the butler drives you to work or that make it virtually impossible to get away with playing Words with Friends during a meeting ever again (damn you, Triple Word box — so close, yet always so far away). Little-known fact: Their R&D department apparently consists of a bunch of third graders that test the ruggedness of their endpoints by playing “phone baseball” (by the way, anyone know if they’re hiring? I’m not a third grader nor am I blessed with good hand/eye coordination, but I am really good at breaking stuff. Like, really good).

Right, so we know Polycom the video conferencing vendor. Now meet Polycom, the Video Conferencing as a Service provider that wants you as a partner (yes, you, the one with the Cat 5 cables draped fashionably around your neck). So, what has this eligible bachelor have to offer cloud providers and cloud-minded telcos, MSPs and VARs? Here are the highlights:

Continued »

What does 2012 hold for cloud providers (besides the Mayan apocalypse)?

OK, we know. You’ve got apocalypse fatigue. But hear us out.

As 2011 comes to a close, cloud providers are on the brink of — well, not an apocalypse. Seismic shift might be a more appropriate term.

Cloud and networking guru Tom Nolle outlines five big cloud computing trends that will reshape the cloud provider market in 2012, making the cloud far more successful and profitable for the providers that get on board.

Perhaps the most interesting of all is Nolle’s depiction of the rise of the “virtual cloud operator,” a spin-off of the “virtual network operator” (VNO) wholesale telecom model.

If “cloud VNO” models are combined with cloud federation, then every application developer has the potential to be a cloud provider on a global scale. How many new services or features could be easily created and supported by this internetworked cloud infrastructure? The result could be an explosion of innovation that remakes the whole relationship among consumers, business users, networks and IT.

The question of “Who is a cloud provider?” is bound to get a lot more interesting if the playing field opens this way. This kind of shift will also undoubtedly leave prospective customers kind of jumpy about the cloud security and compliance implications (because not everyone is comfortable with multiple providers touching their data).

Yeah, yeah. SAP’s making a move for the cloud. But what else is going on here?

They say a magician’s best trick is diverting the audience’s attention long enough to create the illusion that he just pulled a rabbit out of a hat or made a scantily-clad assistant disappear. I’m not quite so cynical to believe that there’s anything subversive about all of the analysis of what SAP’s $3.4 billion bid this weekend for SuccessFactors Inc. means for Wall Street or whether SAP overpaid. But I do think there are some other interesting things to look at besides the rabbit in the hat.

Here’s a quick rundown at some other interesting angles the tech media and blogosphere is exploring.

• Bloomberg pulls no punches: This acquisition is the anti-Apotheker.

SAP AG’s then-chief Léo Apotheker told investors in 2009 that the German company’s homegrown technology was “significantly better” than that of Oracle Corp. (ORCL), which had “not done a good job with acquisitions.”

[...]

[Successors and co-CEOs Bill] McDermott and [Jim Hagemann] Snabe have changed tack at the largest maker of business-management software to do a better job meeting demand for new technologies, such as cloud computing, real-time analytics and mobile applications. The SuccessFactors deal shows SAP’s previous go-it-alone approach to the cloud was lacking, said Thomas Otter, a vice president at Gartner Inc.

“My first reaction was: what took you so long?” Otter said in a phone interview from Heidelberg, Germany, less than 50 miles away from SAP’s headquarters in Walldorf. “This means a fundamental shift in terms of their cloud strategy, which has been rather slow to get off the ground. This is a tacit admission that their cloud strategy was a failure.”

• All Things D says this is the start of a SaaS feeding frenzy, crunching the numbers to speculate on the next M&A target:

The first and most obvious thing that’s going to result from the SAP deal is that speculation will surge about another, similar deal. Already this morning, analysts at BMO Capital have upgraded Taleo, a SuccessFactors rival, on the theory that it is now in play and that Oracle is the most likely buyer. Taleo specializes in cloud-based talent management software, and is about the same size by revenue as SuccessFactors. Publicly traded since 2005, Taleo saw its shares close Friday at $32.96, within 13 percent of its historic high of $37.10, giving the company a market capitalization of about $1.4 billion, making it a relatively easy target for Oracle and its $32 billion war chest. BMO boosted its price target on Taleo shares to $40 from $28.

Another one to watch is Workday, yet another provider of cloud-based human resources software, which last month raised $85 million at an implied valuation of $2 billion as warm-up for an expected IPO next year. It’s on track to do about $320 million in billings in 2011, and is nearing profitability.

Another company that will probably be considered for takeout is NetSuite, the company that specializes [in] cloud-based software for running a business. Trading as of Friday at a valuation just shy of $3 billion, it could be a takeover target, too, though its business is humming along just fine. It’s on its way to closing the year with sales north of $235 million — much of that derives from taking customers away from SAP.

• The New York Times’ Bits blog calls us all back down to Earth regarding how long it’s taken SAP to respond to Oracle’s acquisition of RightNow Technologies. Enterprise customers are not moving as fast on the cloud as vendor marketing machines and frenzied bloggers and journalists seem to be:

After the sales boost, as the plan runs, SuccessFactors is the means by which SAP migrates the data bases of big business over to the new computing world.

This is a long-range plan, and not tomorrow’s work at SAP. And so it is an interesting counterpoint to much of the rhetoric inside the tech world about the speed with which the new paradigm for computing — big data centers accessed over the Internet instead of computing systems run inside a company — will take hold among tech’s biggest customers.

In Silicon Valley, said Lars Dalgaard, the chief executive of SuccessFactors, “There is a lack of understanding of how companies do things, and how lethargic they are about change.”

He added that the existing systems “that tell how a plane lands, that keep a heart beating, you don’t change that quickly.”

ALU to cloud providers: Let’s talk about something besides the data center

Alcatel-Lucent (ALU) has recently announced a cloud software and hardware package that it calls CloudBand, and here’s the first thing you need to know about it: Non-network operators need not apply.

Alcatel-Lucent, which has a strong foothold with the telcos, is laying its new “carrier cloud solution” at the feet of network operators. Its vision is for operators to look beyond the cloud data center and give the network a starring role in cloud provisioning.

“By leveraging the power of the network, [operators] can actually offer a brand new tier of service and SLAs attached to service — guaranteed performance, guaranteed bandwidth, latency optimization, jitter optimization — that can only really be achieved if you … look at the connectivity layer and the compute/storage layer together,” said Dor Skuler, vice president of cloud services at Alcatel-Lucent.

But let’s not get ahead of ourselves. I have personal hangups about the word “solution,” so let’s break down what CloudBand actually is. Continued »

Cloud partner drama: Just like landlord/tenant disputes, only more fun

(And by “more fun,” of course, we mean more expensive, frustrating, damaging and high-risk)

We recently gave you some insight into five business challenges cloud resellers must anticipate when partnering with a cloud provider. Some news out of the UK cloud market is making me wonder if we’re due for a counterpoint piece for cloud providers, outlining five warning signs your reseller is hustlin’ you.

The Register reports:

UK-based Livedrive, which provides a cloud storage backend, ended its contract with US reseller Backify because, it claimed, the firm was “a fly-by-night operation” that didn’t pay for its services. The American backup biz, which offered [end users] a free backup service using Livedrive’s systems, has denied any wrongdoing and blames Livedrive for technical problems.

“Backify had a problem because they weren’t paying the fees that were due to us,” Livedrive MD Andrew Michael told The Register. “The problem started because they were paying us by credit card and their credit card was getting declined when they were adding new customers.”

No word on how much money Livedrive was allegedly fleeced out of, and Backify’s website has since gone bye-bye. It isn’t offering much by way of an explanation (or defense) except to say, “LiveDrive has terminated Backify’s reseller account, and Backify.com is no longer in service.” It also offers would-be customers a referral to Backblaze, a “better and more reliable backup solution,” which (under the circumstances) looks like a Judas kiss for those guys.