Thinking Out Cloud

State of the Open Source Cloud

Zenoss just published the results of an open source cloud survey they did. They polled more than 100,000 of their community members to determine the prevailing sentiments concerning open source cloud deployments, the perceived advantages and disadvantages of this technology as well as to gain insight into future open cloud deployments within IT departments.

Survey respondents included more than 600 IT professionals including system administrators and architects, developers, network engineers and CIOs. 

Unsurprisingly, OpenStack appears to dominate adoption plans today but CloudStack and Eucalyptus are on the rise.

Check out the infographic they created from the data below (click to enlarge). If you want the full report from the survey go here.

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/

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

10 Predictions About Cloud Computing

Next week in Tel Aviv I'm going to participate in a panel about "the future of clouds", moderated by the legendary Yossi Vardi. In preperation, I wrote down a few of the concepts I've been thinking about for the past several years and I thought I would share them with my readers to get some feedback. Keep in mind these are long-term predicitions and trends (in no particular order).

1. PaaS Rules :IaaS becomes niche. In the long-run, IaaS doesn't make sense, except for a limited set of scenarios. All IaaS providers want to be PaaS when they grow up.


2. Public Rules: Internal clouds will be niche. In the long-run, Internal Clouds (clouds operated in a company's own data centers, aka "private clouds") don't make sense. The economies of scale, specialization (an aspect of economies of scale, really) and outsourcing benefits of public clouds are so overwhelming that it will not make sense for any one company to operate its own data centers. Sure, there need to be in place many security and isolation measures, and feel free to call them "private clouds" -- but they will be owned and operated by a few major public providers.


3. Specialized Clouds: There are many dimensions to an application: the pattern of its workload; the government regulations it must adhere to; the geographic access to it; the programmig language and framework it supports; the levels of security, performance and reliability it requires; and other more specialized requirements. It's not a one-size-fits-all world. At least, not always. There will be big generic clouds, and then, many specialized clouds. I've written about this in the past.


4. Government Regulation: The largest cloud providers will become nationally strategic infrastructure (like utilities, financials, telcos, airlines and shipping companies in the past). Given my "public rules" prediction above, cloud providers will become crucial infrastructure to the economy and the interests of their respective nations. They will become "too big to fail". Any change in their pricing will have a profound effect on the economy. And they will also hold the risk of a "cloud run" (similar to a "bank run", a sudden surge of demand they haven't anticipated. Not to mention the fact that they will maintain the sensitive data of consumers, corporations and government agencies. Any way you slice it, it spells regulation. But if history teaches us anything, this regulation will only come after "The Great Cloud Catastrophe" (use your imagination to figure out what that will look like). 


5. The Control vs. Freedom Debate: This sums up the story of cloud computing so far. Freedom is the catch-all phrase for drivers of cloud adoption (no upfront costs, on-demand, self-service, empowerment of the rank & file - e.g., developers), but control (or lack thereof) is the catch-all phrase of barriers to adoption by large enterprises. Every democratic country experiences this: there is sometimes a contradiction between the so-called sacred principles of rule-of-law and personal freedom. It's a matter of drawing the line -- and we're just in the beginning stages of understanding this issue when it comes to cloud computing. This debate will be with us for years to come and will shape the variety of enterprise cloud computing offerings.


6. Cloud Federations - While AWS has enjoyed tremendous international success, in any business that relies heavily on trust, such as IT, nothing beats a local brand. So people will flock to the cloud of their trusted national telco or big IT provider. But on the flip side, they will need to reach a global audience and will want servers around the world. As a result, we will see the formation of cloud federations, similar to what we see in airline alliances, such as Star, SkyTeam and Oneworld.


7. Financial Efficiency and Sophistication: Computing is a commodity, and every commodity ends up being traded, future-traded, brokered, arbitraged, speculated and manipulated with derivative instruments. The good: the market becomes very efficient. The bad: the market becomes complex and opaque. We are already seeing spot markets 


8. Cloud Standards: About two years ago there was a strong wave of interest and discussion about the need for cloud standards. I wrote then, and still believe, it is too soon. But it is also inevitable. We will, however, see multiple competing standards. At least one formal stanard specification from a standards body and several de facto standards from large commercial players such as Amazon and VMWare. 


9. The Ecosystem Wars: I've recently written about the importance of ecosystems in cloud computing. Success in building an ecosystem will be a determining factor in who wins and loses in the cloud. It is not just about the size and breadth of the ecosystem, but how well it all works together. In many ways, Amazon has done a poor job of this so far, but it has the one big compelling factor for an ecosystem: a very large install base. 


10. Horizontal and Vertical Consolidation: As with any industry, as cloud computing matures, it will consolidate. This will happen both horizontally, for example large IaaS players will roll-up regional and smaller IaaS and hosting providers, as well as vertically, for example IaaS providers will acquire cloud management system providers such as RightScale and enStratus.

I'd love to hear some feedback on these trends. Do you agree? Disagree? Have I left something out? Please let me know in the comments.

Java PaaS

[UPDATE (Feb 26, 2012): I added Jelastic and created another category I'm calling Private Java PaaS in which I put GigaSpaces Cloudify, Cumulogic and ActiveState Stackato.]

[UPDATE (Apr 12, 2012): Added DotCloud and rearranged the list a bit]

A couple of weeks ago during OracleWorld/JavaOne, Oracle announced its public cloud offering, including its Oracle Java Cloud Service -- the latest entrant into the increasingly crowded Java Platform-as-a-Service space. Despite being the most popular programming language, PaaS offerings for Java were not adopted as quickly as those for Ruby, Python and PHP.

Not surprisingly, however, once Java PaaS arrived at the scene, many of the big players now have PaaS offerings -- given Java's popularity in the enterprise. 

Here's the list I compiled (in alphabetical order). If I have overlooked anything, please let me know in the comments:

Public Java PaaS

• Amazon Elastic Beanstalk 
• CloudBees [email protected]
• DotCloud
• Google App Engine
• IBM SmartCloud Application Services
• Jelastic
• Microsoft Azure
• Oracle Java Cloud Service 
• OutSystems Agile Platform
• Red Hat OpenShift 
• Salesforce.com Heroku for Java
• VMWare CloudFoundry
• WSO2 StratosLive 

Private Java PaaS

• ActiveState Stackato
• Cumulogic 
• GigaSpaces Cloudify
• WSO2 Stratos

It should be noted that HP has a also made some noise about a Java PaaS but it hasn't launched yet.

Additional reading:

• Java PaaS Shootout: A technical comparison of Google App Engine, Amazon Elastic Beanstalk, and CloudBees [email protected]

The Neglected Cloud Adoption Driver: Pre-Integrated Ecosystem

One of the overlooked drivers of cloud adoption is the tightly integrated, I call it pre-integrated, ecosystem you get when you choose the right provider.

Because cloud environments are generally homogenous and consistent within their own boundaries -- and this is true for IaaS, PaaS and SaaS -- and because they are tightly controlled by the provider, the cloud provider is in a position to pre-integrate other systems, components and apps to the infrastructure (or the application, in the case of SaaS). 

In traditional IT, integration is one of the most complex, painful and costly processes. A pre-integrated ecosystem allows making these integrations simply by flipping a switch.

Pre-Integration Examples

My first exposure to the concept of pre-integration was in January of 2006, when Salesforce.com launched the AppExchange. This was more than two years before Apple launched the AppStore, mind you. And the idea wasn't fully baked yet, but it was certainly an "a-ha" moment. And it goes to the heart of what's so revolutionary about cloud computing.

Today, for example, you can with a few clicks of a button, integrate between Salesforce.com's CRM app and Google Adwords, Marketo, LinkedIn, VerticalResponse, Zendesk and hundreds of other applications. Again, with traditional on-premise CRM such integrations would have been an expensive and lengthy proposition.

But a pre-integrated ecosystem doesn't only apply to SaaS. It also works well with PaaS and IaaS clouds.

The first chance I got to implement the concept was with the Heroku founders, James, Adam and Orion, in early 2009 with the Add-Ons that can be added to any app a user developed and runs on the Heroku PaaS. A perfect example of pre-integration at Heroku was New Relic, which is Application Performance Managemet (APM) as-a-Service. You basically get New Relic APM capabilities with a click of  a button. In the on-premise world, implemeting an enterprise-grade APM (Wiley, for example) takes months of professional services to implement.

In Infrastructure-as-a-Service, there are many examples of a pre-integrated ecosystem particularly around AWS and the OpenStack framework. In particular there are many management and monitoring tools that have pre-integrated with these two cloud platforms, but other software categories as well.

Daisy-Chaining Cloud Services

The notion of pre-integration can be taken even further.

When I hosted the cloud track at QCon 2010, one of the speakers was Thor Muller, CTO & Co-Founder of GetSatisfaction, and in his presentation he introduced me to a phrase I've been using ever since: "daisy-chaining services".

My favorite example, one from SaaS for small business, involves daisy-chaining Bidsketch, Freshbooks, Highrise and RightSignature.

Bidsketch is a SaaS product for creating and sending proposals. It lets an individual or company create a proposal and share it with a prospective client who can then log in and view the proposal on Bidsketch, make comments and changed and ultimately approve the proposal. As all of this happens, Bidsketch automatically updates the events in the Highrise (CRM) entry for that client ("Proposal sent", Proposal approved", etc.).

Once the proposal is approved, Bidsketch then activates another service: RightSignature, which is used for electronic, online signatures. Both sides can sign the approved proposal, and this fact is updated in Biksketch: proposal signed. In turn, Bidsketch, again updates the Highrise CRM system. Bidsketch can then automatically create an invoice in the Freshbooks invoicing service -- and Freshbooks will then update Highrise that an invoice was sent, payment was received, etc.

What Does This Mean for Cloud Customers?

Customers are increasingly becoming aware of the importance of ecosystems of cloud services -- and specifically of the value of pre-integration.

I was recently asked to recommend a CRM system to one of the startups I am on the advisory board of. As much as I dislike the complexity and poor peformance of Salesforce.com, I had no choice but to tell them it's the only way for them to go -- for the simple reason that it's the only CRM SaaS offering that is guaranteed to be pre-integrated not only with every app they need today, but also with ones they will need in the future, which may not even exist yet.

Case in point, when Totango -- another company I am an advisor to -- recently launched its customer engagement SaaS offering (an emerging category, see David Skok's post), it immediately started with support for SFDC. And you can safely assume that any other startup that launches a product that could benefit from integration with CRM, will first support Salesforce (or Highrise if it's targeting SMBs).

In summary, the breadth and depth of ecosystems is becoming a critical factor in how customers choose which cloud services to bet their business on.

I'm hoping to write a separate post on what this means to startups and other cloud services providers. Suffice it to say for now, it's something you should be thinking about...

 

Totango Brings the Promise of Cloud and SaaS Models a Step Further

Today, my friends at Totango announced their $3.8 million Series A funding and the public launch of their service. I've been involved with the company since the beginning (in fact, before the beginning) as an advisor and I wanted to give my take on why I think what they are doing is so significant to SaaS companies and to cloud companies in general.

As I've written many times before -- and at this point is pretty much generally accepted -- the move to a service delivery model for software (SaaS) and other aspects of IT (PaaS and IaaS) is changing every aspect of the business: engineering and operations, but even more interesting to me, the business side of the house, including marketing, sales and customer success. This is especially true for B2B companies.

About a year and a half ago, Guy Nirpaz, now Totango co-founder and CEO, and I spent an afternoon in a coffee shop on The Embarcadero in San Francisco thinking about where all this leads to. What new business needs arise from this model?

Then, as now, I had the advantage of working with multiple companies who were on the cutting-edge of this trend, companies such as Heroku, Twilio, Sauce Labs and New Relic. From that vantage point I could see a curious phenomenon. In theory, given that the entire interaction of customers with their products was online, they could truly understand what customers and prospects (in free trials) are doing. They should have been able to answer questions such as how are we doing on all of the key performance indicators of our business? Whice trial users are ramping up their activity and are ready to buy? which ones are having problems? What features of our product are the most and least popular? and many other questions.

That was one of the promises of the cloud delivery model, but in reality it didn't quite materialize. 

Don't get me wrong. Almost every company in the space, startup or established company, has some sort of "dashboard" for tracking KPIs and some aspects of customer usage, but these tools are usually done in a rush and as an afterthought. They are crudely developed by an engineering team that provides this because the business folks are demanding it but there heart isn't really in it.

This results in half-baked solutions. For example, it is very common that every time a business person asks a simple question, a developer has to stop what they are doing and work through a series of SQL queries and other coding tasks to get them the answer. And that is assuming they have properly instrumented the application to track all of the relevant activities, events and metrics in the first place.

As you can imagine, with such a high barrier (and a lot of tension arises because of this), these types of analyses don't happen often. Not only are they not being done consistently and continuously, they are not being done methodically. There were no "best practices" as to what we should be looking at and what it means. 

It is this problem that Totango addresses. 

Totango has many great things in the work but it begins by focusing on sales. And not no-touch sales, but SaaS companies that have inside and field sales people who need to sell, renew and upsell accounts.

Companies such as Zendesk and Jajah have already been using the service in private beta and proving the value. It's worth checking out (it's free for now).