Thinking Out Cloud

Cloud Adoption Patterns - Citrix Synergy 2012 Keynote

This coming Thursday, May 10, I'll be giving one of the keynote speeches at the Citrix Synergy 2012 conference in San Francisco. My talk is in the morning and comes right after a distinguished speaker: Sameer Dholakia, GM of the Cloud Platforms Group at Citrix.

You can see the description of the two talks (and the one by Citrix CEO Mark Templeton who speaks on Wednesday) on this Featured Speakers page. 

The title of my talk is "From the Bottom Up: Patterns of Cloud Adoption". Here's the abstract:

The current pattern of cloud adoption in the enterprise may surprise you. Rather than big, strategic, top-down decisions set by the CIO, cloud computing services – IaaS, PaaS, SaaS – are being adopted primarily through a pattern of bottom-up adoption. Rank-and-file developers, IT administrators and business decision-makers are embracing cloud services and using them as a way to get their jobs done and drive the outcomes expected of them. In this talk, Geva Perry will explore this phenomenon, including its causes and the implications for the enterprise, as well as for vendors.

Regular readers of my blog know I write about this topic a lot (see recently Cloud Computing and SaaS Models Are About Bottom-Up Adoption and this post on the CloudSleuth Blog). In this talk, besides describing the phenomenon, I move a step further to discuss in more detail the implication of this adoption pattern to two groups: enterprise customers and SaaS/cloud vendors.

After the talk there will be a link to the video and slides. If you can't make it to Moscone on Thursday you can watch it live on the web from here:  http://live.citrixsynergy.com/sanfrancisco/

In the Game of Clouds, You Win Or You Die: CloudStack

Citrix is making a big announcement today. It has two parts. First, it's moving its CloudStack framework, which was owned by Citrix and distributed at CloudStack.org through a GPL license, to the Apache Foundation. Second, it is aligning CloudStack with Amazon Web Services' architecture and APIs.

This is big news that's sure to ruffle some feathers in the cloud computing space. So the questions I have are:

• Why are they doing this?
• What are the implications?

Why Is Citrix Moving CloudStack to the Apache Foundation?

The move appears straightforward. Citrix acquired CloudStack through its $200 million acquisition of Cloud.com in July 2011. From what I'm hearing, it has had good success with enterprise and provider adoption of the product, but it was far from being accepted as an industry de facto standard, which is what, I assume, they had hoped for. So it would make sense for them to move it to a respected open source foundation like Apache.

But wait. There was already a OpenStack vying for that de facto standard open source platform status, and Citrix announced its support for it two months before the Cloud.com acquisition. The company said it would continue to support both platforms after the acquisition, so what happened?

Citrix claims that the OpenStack foundation wasn't run well: it was dominated by Rackspace and had a "pay-to-play" model. The result was that the APIs were poorly designed and the product lacked stability and maturity (a claim I have heard from others). At the same time, while OpenStack is getting support from the likes of Cisco and HP, the community is somewhat fragmenting, with multiple distributions and extensions from the likes of startups Cloudscaling and Piston Cloud. This started creating a problem for enterprise customers and providers who were getting confused and having a bad experience with OpenStack.

In the meantime, Citrix is feeling competitive pressure from the company it views as its primary rival for actual customers (as opposed to winning the hearts and minds of the "community"): VMWare.

It simply couldn't wait and had to go on the attack with a bold move. This is it -- and it's a pretty good one.

Why Align CloudStack with the AWS APIs?

The final piece in making CloudStack the de facto standard cloud platform is the API. By aligning with the Amazon APIs, CloudStack gains a hghly-adopted, proven API with a massive ecosystem of integrated tools and services around it. They tell me they will have 100% compatibility by the end of this year.

But the catch is this comes on the heels of Eucalyptus's announcement that it is aligning with the AWS APIs. Eucalyptus, just a reminder, is another open source cloud platform that has been vying for leadership among enterprise customers.

Game of Clouds

With this move complete, Citrix has a production-proven stable product, which is now an open source platform managed by the widely-respected Apache Foundation, using a popular API with a massive ecosystem around it. Pretty clever, I think.

On the other hand, CloudStack is fighting on three fronts now: its traditional arch-enemy VMWare, the OpenStack camp with the dozens of vendors -- large and small -- behind it, and Eucalyptus. A regular game of thrones. And to paraphrase Game of Thrones: In the Game of Clouds, you either win or you die.

More on Bottom-Up Adoption of Cloud Computing and SaaS

A quick follow up on my previous post on cloud computing adoption patterns. I have been guest blogging on Compuware's CloudSeluth blog and have written a post on this topic titled Cloud and Bottom-Up Adoption. In it I reiterate some of the points I wrote about in the last post and which I presented in my CloudConnect keynote, but I added another angle, comparing the first attempt of creating a true public cloud, the Sun Grid, to the first successful attempt: Amazon Web Services.

The main difference between the two? You guessed it. 

While the former (Sun) targeted the traditional IT customer, the CIO, Amazon went after developers, and that was the secret to their success.

For more, check out the full post here.

 

Cloud Computing and SaaS Models Are About Bottom-Up Adoption

Last week I gave a keynote presentation at the CloudConnect conference in Santa Clara. The title of the presentation was: "Surprise! Your Enterprise is Already Using the Public Cloud."

Regular readers of this blog (or those who work with me) know I go on about this a lot: In the enterprise, cloud computing services (IaaS, PaaS, SaaS) are being adopted bottom-up. In other words, by the rank & file (developers, IT admins, business folk) and not top-down with a big strategic decision by the CIO.

That's what the keynote was about and the title was addressing the CIO, who is the last to know about cloud computing adoption within his or her organization.

If you're interested in this topic you can watch the video of the presentation (you need to scroll down to get to it) on the CloudConnect web site. 

You can also read this very good summary of my talk by Rich Miller on Data Center Knowledge.

UPDATE [March 1, 2012]: Charles Babcock at Information Week wrote a nice piece about CloudConnect, including coverage of my keynote: 4 Cloud Computing Pain Points That Still Hurt.

And finally, here are the actual slides via SlideShare:

CloudConnect 2012: Surprise! Your enterprise is already using cloud computing

View more PowerPoint from gevaperry

 

The Importance of Customer Engagement in Cloud and SaaS Models

In July I wrote about the public beta launch of Totango and how it promised to help increase SaaS sales by better understanding customers, and especially their interaction with online channels, including the SaaS service itself.

Now, Totango has announced that it has analyzed and optimized the sales engagement or interaction with over one million prospects and customers of SaaS businesses. That’s a big number.

When looking at the research published by Totango here are some important takeaways for SaaS sales:

Next best action and next best channel for each customer

If you can, use a zero touch (self service) or low touch (inside sales) model. Using an inside sales rep (phone and email) is exponentially cheaper than using classic enterprise sales (somebody who gets on an airplane and wines & dines customers). And using a self-service sales model is exponentially cheaper than inside sales.  David Skok has published some of the math in his presentation on building a sales and marketing machine (see slides 18, 19, 20). As I know from my own experience with many companies, and as Joel York has pointed out, some B2B sales are too complex for zero touch or low touch selling, but generally modern buyers expect to be in charge and don’t always appreciate a call with a rep. The trick is to figure out which prospects would benefit from a sales call and which would actually be hurt by it. Big data from solutions like Totango can help: A/B testing batches of leads can help you figure out what is the best next action for each specific situation.

Know how your customers are using your service from day one

Not all prospects are created equal. Totango found that the single most important indicator of a prospect’s likelihood to sign up for a paid service is his or her activity level during the free trial period.  So if you know who your most active trial users are you can direct your inside sales team’s attention to these prospects. Free trial users who are still active during day 3 of their trial were 4 times more likely to convert into paying users than the average customer.  Active trial users who were contacted by a sales rep were 70% more likely to buy the paid service than those who weren’t (but of course sales reps are likely to choose the best looking prospects to begin with). Since a sales rep doesn’t have enough hours in the day (and is too expensive as noted above) to contact ALL trial users, it’s important to have each rep start their day by calling those prospects most likely to convert. This will increase sales effectiveness and sales efficiency: Zack Urlocker from Zendesk is quoted on the Totango website as saying that they were able to increase free to paid conversion by more than 30% using this approach.

Focus on customer success

By definition, the all-important customer lifetime value metric in SaaS is determined not by the value of the initial sale, but by the value of ALL sales made by a customer over its lifetime including expansion sales and subscription renewals. The key to success upselling an account is to know what value the customer has received from the solution to date. If you know that a customer has been successful, it’s an easy sale. If you call a customer and find out they have discontinued using the service months ago, it’s an embarrassment. You should really receive an early warning indicator that an account is no longer using the service and proactively address and turn a customer before they cancel the service. Totango’s research found that most cancellations are followed by a period of non-use and that non-use is more prevalent than you might think: a full half of paid SaaS customers log in less than once a month or do not use their paid service at all. Another 19% is using their paid service less than once a week.  

In summary, it seems to me that knowing your customer is rapidly going from a “nice to have” to a “must have”. Those early adopters of customer engagement software will be able to:

• Dramatically increasing sales by analyzing customer data and deciding on the best next sales action for each customer
• Exponentially lowering sales costs by routing prospects to the lowest cost sales channel

 

And those who don’t pay attention will very soon be at a very significant competitive disadvantage…

Check out this very cool infographic from Totango:

BlazeMeter: Launching the JMeter Testing Cloud

Today, BlazeMeter is publicly launching its cloud load testing service and announcing its $1.2 million funding round led by YL Ventures. I joined the BlazeMeter board of directors back in July and we've been preparing for this launch since, so it's exciting seeing it all come together.

Like several other startups that I've been involved with, BlazeMeter leverages open source software in a cloud service, making web application development a whole lot easier.

Specifically, BlazeMeter uses Apache JMeter, the popular open source performance testing
framework, to create massive volumes of realistic browser simulations. BlazeMeter also allows current JMeter users, who have an existing set of JMeter scripts, to instantly load those scripts to the cloud and run them without any changes. Alternatively, folks can simply enter a URL, choose a pre-defined test scenario and run it instantly (with approporiate security measures when requesting very large stress volumes).

The beauty of what Alon Girmonsky, BlazeMeter founder and CEO, and his team did with it, is that although BlazeMeter is extremely easy to use, it is an enterprise-grade performance testing tool, both in terms of scalability and in terms of the comprehensiveness of the reports and analysis it provides.

In addition, BlazeMeter's pricing model is extremely attractive with a combination of usage-based pricing and subscriptions. And you can start running tests for free.

The company has a lot of great plans in store and I will have a lot more to say about it but for now, congrats to Alon, Daniela and the rest of the team! Alon is an incredible enterpreneur and I look forward to working with him on building BlazeMeter to a great company in the coming months and years.

 

Check out Alon's intro blog post, and don't forget to follow them on Twitter: @BlazeMeter for updates.

And see some additional coverage on the company today:

• The Register: Cose-probing, not Angry Birds, will define cloud's success by Matt Asay
• CNET: BlazeMeter raises funds for cloud-based load testing by Dave Rosenberg
• ITBusinessEdge: Changing the Economics of Load Testing via the Cloud by Mike Vizard