There’s a litany of reasons why enterprises don’t want to buy public cloud services, but sunk investments in legacy IT tops the list, according to TechTarget’s recent Cloud Pulse survey.

Looking over the results, I thought about how this adoption barrier might be more difficult to overcome than, say, security. I know many of you categorically disagree with that statement, but humor me for a minute: Of course, there are many prospective customers who will never believe the cloud can be secure, no matter what a cloud provider’s strategy or messaging is. But there’s definitely a population that’s willing to consider cloud services if providers strengthen their IT security strategies, embrace transparency, conduct third-party audits and so on. I guess what I’m saying is there are tangible steps cloud providers can take to further fortify the cloud, and they have an opportunity to demonstrate this and possibly change the hearts and minds of enterprise IT pros.

But it seemed to me that there isn’t much a cloud provider can do when an enterprise isn’t interested in hearing the cloud pitch because it’s already sunk hundreds of thousands or millions of dollars into its internal [fill in the blank, e.g., storage area network, CRM deployment, development platforms].

I spoke to several cloud providers about all this for a recent story we published, Why CIOs have problems with cloud computing: Sunk costs in legacy IT. You can (and should!) check out the story to see how providers such as Microsoft, Savvis and Bluelock are dealing with this issue (spoiler alert: hybrid cloud is a common denominator), but I also wanted to share some of the really great reader feedback we’ve received in the comments section of this article.

We asked readers what they thought the biggest barrier to cloud adoption might be. Here are a few interesting responses we got:

• “In my point of view, solution providers still do not have a coherent [go to market], and, in most cases, they fail to provide a real business value proposition. The adoption of the model is restricted to IT service islands. In most cases, the focus remains on mere cost reduction rather than the possibility of having access to computing resources and preconfigured applications that add performance to companies into a new level of information processing and management, that only the mega corporations have today, through direct investment in IT assets, applications and IT and systems specialists.”
• “Empire’s [sic] built – similar to the sunk IT investment, can often be a big barrier. A CIO who clings to the concept of “building his empire” doesn’t want to lose that piece of his crown to an outsourced provider. If an IT Manager sees installing infrastructure as his key strength and can’t adapt to the new services model, keeping the status quo is a safe play. It takes a CIO or other C level managers to reconsider what an IT department provides and whether it is best placed to provide it. I think an IT department can be equated with the public service – where it is run lean, it adds value, but as a bloated empire it just acts as a roadblock for innovation.”
• “I believe the real reason around the “fear factor” syndrome of Security is not IT security but job security. Loss of control is a huge factor which individuals are downplaying. Most companies will not consider allowing their core transactional systems and applications to reside off site. Also a detailed transition plan that allows migration in phases is a must for any cloud business case which is sorely lacking and in most cases excludes a vital issue and that is a mutual sharing of risk and benefits.”
• “It could be a combination. Big Firms typically want to have their infrastructure managed internally. It is not the question of money but security, tradesecrets etc. Cloud can be good solution for SMBs,other organizations and can help generate new businesses and bring IT to businesses that can not afford Big IT. In my opinion, both IBM and Microsoft have good offerings on Cloud along with Salesforce.”

Although the cloud still has its skeptics, some new research from International Data Corporation (IDC) suggests their influence is going to dwindle — and fast.

Global spending on public cloud IT services is expected to exceed $40 billion by the end of this year, IDC reports. By 2016, cloud spending will approach $100 billion.

Over this four-year period, that represents a 26.4% compound annual growth rate. That’s five times as fast as the IT industry overall, according to IDC.

Which cloud services are going to be the hottest markets? IDC says Software as a Service (SaaS) will “claim the largest share” of cloud services spending over the next five years. Interestingly, however, cloud storage and Platform as a Service (PaaS) will grow faster.

This probably comes as no surprise to cloud providers. Infrastructure as a Service (IaaS) is on track to become commoditized (if it hasn’t already), and cloud providers are recognizing that selling SaaS and PaaS will be more profitable over the long term.

From a geographic perspective, the United States will occupy the largest share of the cloud market, IDC reported. Following closely behind the U.S. are Western Europe and the Asia-Pacific region (minus Japan). But the fastest-growth area for cloud spending? Emerging markets, whose “collective share [will] nearly double by 2016 when it will account for almost 30% of net-new public IT cloud services spending growth,” according to IDC.

When someone hires a lawyer, a hand cramp typically follows.

That’s not just the body physically rejecting the bill that comes in the mail later. Lawyers have an on-going love affair with paperwork, requiring signature after signature after signature. But what if this didn’t have to be the case? Could a cloud provider save all the time, paperwork and money of shuttling legal documents back and forth? At least one Software as a Service (SaaS) provider, Wufoo, is using its partnerships to tap this to niche market, according to the Globe and Mail.

Wufoo, which was acquired by SurveyMonkey last year, offers a convenient form-building application that operates on a freemium model. Lawyers are up-and-coming cloud enthusiasts because SaaS applications like Wufoo are easy to use, universally accessible and help them skip the hassle of time-consuming paperwork, reports the Globe and Mail.

Wufoo’s strategy is an interesting example because it has not only found opportunity in a niche market, but it also offers a testament to the power of cloud partnerships. Through a tangled web of partnerships with other SaaS providers, Wufoo is able to offer customers even more value by providing integration with other cloud applications, including Freshbooks, Apple’s iCloud and Google Apps.

Enterprises are increasingly getting their feet wet when it comes to cloud adoption, and they will have various needs unique to their markets. It will be difficult for one cloud provider to meet them all.

In Wufoo’s case, this special string of partnerships builds a stronger incentive for one vertical market, legal services, to adopt the cloud. If cloud providers are on the lookout for these industry-specific partnership opportunities, they will be able to build compelling cloud offers for various markets around the globe.

The cloud is essentially a product up for sale, which means cloud provider big-wigs need teams of marketing and advertising specialists to make the cloud look as appealing as possible to potential clients.

Advertisers are typically trained to list the most enticing qualities of their product, avoid jargon or deceptive claims, and demonstrate why their products are the best. But what happens if the marketing team is playing up the wrong qualities? Would this hide the real value of the cloud, underrepresent its most desirable attributes and fail to convince enterprises to make the switch?

In a word: Yes. According to David Lithicum of InfoWorld, this is exactly what is happening. The typical cloud pitch that providers offer highlights the short deployment times by making the need for hardware and software obsolete. This is not where the real value lies, which means providers are marketing the wrong “cloud feature” to potential customers.

Lithicum feels that what cloud providers are missing is the “home run” of cloud advantages: the ability to easily adapt to continuously evolving requirements. But the problem lies in the fact that this concept of adaptability is hard to define, and it is therefore overlooked.

Need help developing the right marketing message — or avoiding the wrong one? Check out some of these resources:

• Bring on the cloud marketing stunts!
• Conflicting definitions of hybrid cloud model cost you customers
• Cloud APM services win customer trust by monitoring app performance
• Which cloud business model involves the least risk?

When I began covering cloud, the “dumb” question that kept popping up for me that I was afraid to ask: Is the private cloud actually a cloud? The article posted on Forbes this week entitled “Private clouds are from Mars, public clouds are from Venus…Sort of” assured me that I’m not alone, and that even enterprise IT departments see public and private cloud as two completely different entities.

While public clouds can be purchased via the internet though a third party — like Amazon — many enterprise users I’ve spoken to have said that their private clouds come from the enterprise virtualizing their services. In fact, as the article suggests, it seems like enterprises are thinking about private cloud as an extension of virtualization and not necessarily a cloud strategy at all.

Private clouds seem to be the safe bet, maybe even a baby step for enterprises and businesses wanting to make a move toward the cloud. Private clouds are still managed and created by IT and are thought to present less of a foreseeable risk to the enterprise, so who can blame them?

But the public cloud is a different story. If the company needs to put out applications and functions right away and perhaps doesn’t have the IT department in place to do it, here’s where the public cloud can come in handy.

The hybrid model (or happy medium) can be thought of as a viable option for many companies that want to control some functionality, but may be willing to let somebody else handle the management of other applications. This strategy might be favorable to those who are on the fence about whether the cloud is right for their business and it’s also fitting to different industries faced with compliance regulations — like health care and financial institutions.

It looks like it’s really up to the cloud provider to know its audience.

]]> http://itknowledgeexchange.techtarget.com/cloud-provider/is-private-cloud-really-a-cloud/feed/ 0 http://itknowledgeexchange.techtarget.com/cloud-provider/interop-2012-the-5-minute-cisco-cloud-news-round-up/ http://itknowledgeexchange.techtarget.com/cloud-provider/interop-2012-the-5-minute-cisco-cloud-news-round-up/#comments Wed, 09 May 2012 20:17:32 +0000 Jessica Scarpati http://itknowledgeexchange.techtarget.com/cloud-provider/?p=185

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.

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.

The backdrop of our conversation was a recent survey Parallels published about the SMB cloud opportunity, the 2012 Parallels SMB Cloud Insights Report, which proved that market segments are far more nuanced “enterprise vs. SMB” or “healthcare vs. financial services.”

For example, one way the survey sliced respondents was by size: micro SMBs (1-19 employees), small SMBs (20-99 employees) and medium SMBs (100-1,000 employees). The survey also analyzed results based on a company’s IT resources and cloud adoption attitudes, but let’s just look at size for a moment.

When respondents were asked to select multiple reasons why they would keep their servers in-house, as opposed to SMBs adopting IaaS:

• Security concerns were a far bigger reason for so-called medium SMBs (about 80% of them) to avoid IaaS, versus about 30% of micro SMBs. A similar discrepancy between the two groups was evident for the response, “specific applications need to be in-house/other technical concerns,” with about 60% of medium SMBs identifying it as a reason to keep servers in-house, versus 25% of micro SMBs.
• Size doesn’t always matter. All three groups (micro, small and medium SMBs) showed near-equal concern about issues around pricing (60% of each group said it was a factor), unfavorable recommendations from a trust consultant/IT staff (14%) and bandwidth/connectivity issues (10%).