CloudOnomics

By Ian Moyse, Cloud Industry Forum and Eurocloud Board Member

Moore’s Law back in 1965 predicted silicon power would double every two years. But what its creator, Gordon E. Moore, couldn’t have predicted was the dramatic economies of scale the cloud would eventually bring to all of our lives. For one, it’s helped lead to a drop in price for essentials like computing power and storage by making them more accessible. But also, it’s enabled conveniences no one ever would have imagined four or so decades ago.

Today we’re able to use a mobile device with massive power and local storage to locate and download from virtually anywhere in the world an application for as little as 59 pence. Think for example of Shazam, which identifies songs you can’t quite discern after it listens for just a few seconds. Leveraging its cloud database, Shazam also lets you buy and download the song via your smartphone. All of this – the convenience, the low cost, the power on the local device – is driven by the cloud.

The Cloud has not only driven down costs, but it’s helped increased our satisfaction with – and expectations of – our Internet experience. It’s enabled mobility and delivered immense computing power to anyone, anywhere at any time. The cloud has also driven the success of many vendors and will continue to do so as developers deliver applications that are faster to market and reach a wider commercial audience at a lower cost of delivery.

We should expect to see more changes in the size and delivery methods of the technologies we use –where very small files, programs or devices connect to the cloud where all of the benefits are stored. Such client/cloud configurations are a boon for consumerisation as our appetites for an always-connected, “iWant” lifestyle increase.

In 10 years on iPhone 14 and iPad 11, will we see applications that are free and pay 1p per use perhaps? Or will we see others employing new models that yet again change the way we digest and pay for computing power and information?

More changes to the Cloud economics that we won’t see coming are inevitable. Perhaps an update to Moore’s Law will be formed to hypothesize that the number of applications running the in the cloud will double every two years; based on today’s adoption and consumption rates, however, we’re more likely to see this being every two months

Is Your Head in The Clouds?

By Ian Moyse, Eurocloud UK Board Member and Cloud Industry Forum Governance Board Member

There’s been a thunderstorm of growing noise surrounding cloud computing in the past 24 months. Vendors, analysts, journalists and membership groups have all rushed to cover the cloud medium, although everyone seems to have their own opinion and differing definition of cloud computing.  Similar to many new sectors of technology, the key is to separate the truth from the hype before making educated decisions on the right time to participate.

While still evolving and changing, cloud computing is here to stay. It promises a transformation – a move from capital intensive, high-cost, complex IT delivery methods to a simplified, resilient, predictable and a cost-efficient form factor.  As an end user organisation of different sizes, you need to consider where and when cloud may offer benefit and a positive edge to your business.

Cloud computing is a new concept of delivering computing resources, not a new technology. Services ranging from full business applications, security, data storage and processing through to Platforms as a Service (PaaS) are now available instantly in an on-demand commercial model. In this time of belt-tightening, this new economic model for computing is achieving rapid interest and adoption.

Cloud represents an IT service utility that enables organisations to deliver agile services at the right cost and the right service level; cloud computing offers the potential for efficiency, cost savings and innovation gains to governments, businesses and individual users alike. Wide-scale adoption and the full potential of cloud will come by giving users the confidence and by demonstrating the solid information security that it promises to deliver.

Computing is experiencing a powerful transformation across the world. Driven by innovations in software, hardware and network capacity, the traditional model of computing, where users operate software and hardware locally under their ownership, is being replaced by zero local infrastructure.  You can leverage a simple browser access point through to powerful applications and large amounts of data and information from anywhere at any time, and in a cost effective manner.

Cloud computing offers substantial benefits including efficiencies, innovation acceleration, cost savings and greater computing power.  No more 12-18 month upgrade cycles; as huge IT burden like system or software updates are now delivered automatically with cloud computing and both small and large organisations can now afford to get access to cutting-edge innovative solutions.  Cloud computing also brings green benefits such as reducing carbon footprint and promoting sustainability by utilising computing power more efficiently.

Cloud computing can refer to several different service types, including Software as a Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS). SaaS is generally regarded as well suited to the delivery of standardised software applications and platforms, like email, CRM, accounting and payroll. The development of the SaaS business model has been rapid and it is now being used to provide high performance, resilient and secure applications across a range of company sizes and industries.  So when should you consider a cloud service and what should you look for in choosing a vendor partner?

Cloud or SaaS does not provide one-size-fits-all solutions, and not every application in the cloud will be right for your business. You should consider in what areas it makes sense to utilise the cloud.  Where can your organisation gain improvement in areas of business efficiency, resilience and cost reduction? Look to others in your sector and what they have done, and look for simplicity and obvious choices in your first cloud solution adoptions. Review your shortlisted vendors carefully and compare them across multiple areas but not just price. With cloud computing you need to ensure that you validate who you are dealing with, what their reputation is and the quality of service you will receive.

Things to consider when looking for a cloud service vendor:

•  Review your vendor and its financial viability – its profitability is an indication of its strength and stamina and reflects the strength of its business model and ability to execute as a long term supplier to your business.

•  Look at its technology (function/protection) and match it with your business requirements – look at the fundamentals such as safety and reliability first, as you would when buying a car, then consider the extras.

•  Study the roadmap and service enhancements your business will benefit from – what reputation does the vendor have for consistent delivery and innovation in the past few years?

•  Research the vendor’s reputation for support and service provision – how good are the SLAs (Service Level Agreements) and what is its capability to deliver results?  How big is the support team?  Are they located in your region, and are they employed directly by the vendor?

Ignoring the cloud or moving everything to it in a race are both perilous positions. Taking educated steps to the cloud will ensure you gain the benefits that it can bring and that you don’t end up in a technological storm.

With Great Power Comes Great Responsibility

By Ian Moyse, Eurocloud UK Board Member and Cloud Industry Forum Governance Board Member

The cloud delivery model gives vendors a great amount of power. It is easier to create, deploy, maintain and enhance a service than it has been at any other point in computing history. Just look at Facebook, which grew to 500 million members in a very short period of time. People readily share within it, many with a limited understanding of the potential risks to their private information.

The ability to make an enhancement and almost instantly put it into the customer’s hands is immensely powerful – and immensely dangerous. If you’re a software vendor and distribute software with a bug, the effect propagates slowly as people install the update. And often, you’ll hear about the problem and get a chance to fix it before many customers even become aware. With cloud technology, however, such mistakes instantly propagate to all users. Because of this ability to quickly affect a wide range of customers, the responsibility for a cloud vendor is greater than we have seen before.

As the industry rushes to capitalize on the cloud delivery model, users are faced with more and more choices, making it harder to distinguish between a robust, reputable vendor and a small, possibly risky, player. Selecting a safe bet vendor is critical. Many are software vendors that are just dipping their toes into cloud technology. But the cloud is a very different world, and there is a different approach and mindset to deliver upon.

It is up to customers and resellers to perform due diligence on cloud vendors so they can deliver success stories to their customers and business associates. As in any market, there are pros and cons and good and bad providers. Customers and resellers need to take the time to make educated decisions to discern the good from the bad, the safe from the risky. And cloud vendors need to invest in the expertise and solutions required to deliver the high quality of service customers expect.

The benefits of cloud technology far outweigh the potential risks, both in terms of power and quality of service. Smaller businesses and individual consumers can now access robust applications that were previously affordable only by larger firms. The risks can be mitigated by performing educated decisions and being diligent in your choices. There are plenty of options, and it is up to you to select a vendor who can responsibly manage the power of the cloud.

‘C’ LOUD

By Ian Moyse, Workbooks UK, Sales Director, Eurocloud UK Board Member and Cloud Industry Forum Governance Board Member 

The big C when it comes to Cloud for the Channel is Conflict. I have been presenting and visiting partners around Europe for the past several years and listening to the opinions and input from vendors, Vars, Resellers, MSP’s, ISP’s and a variety of channels by varying name definitions and one things for sure, the Cloud has certainly stimulated debate. 

Whether it be concern, nervousness, confusion or mistrust, a lot of negative feelings have been generated in the channel by the C word. And yet there also are a growing number of channel cloud players, either from the traditional space finding their feet in Cloud solutions or thoroughbred new-born channels who focus only cloud. Take a look at examples such as Cloudmore from Sweden, Outsourcery in the UK, Jamcracker out of the USA, SaaSplaza from the Netherlands and new entrant SaaSMax from the USA and  you quickly get a vision of a new opportunity that is presenting itself for a regeneration of the channels to market as we have known them. 

We also see traditional distributors building cloud divisions, look at Ingram and Tech Data, both strategizing around cloud and formulating aggregation strategies to keep  their hand in as much of the revenue we have known go through as product (software and hardware) sales are combining to be spent on single cloud solutions. 

Customers will buy cloud, not because of the term or the hype, but because of the business outcome and benefits it can bring, be they rapid turn it on availability, more resilience, more flexibility in a world of consumerisation and BYOD (Bring Your Own Device) or simply reduced cost of both implementation and on-going usage.  

It is therefore important that the channel between the vendors and the customer get to grips with cloud solutions, terminology and the value propositions they can bring and understand what they will need to adapt to in terms of selling, marketing, billing and their value to not only the customer in this new form factor, but also to the vendor. Shying away from this will leave the customer and vendor with no option but to both court and find each other. The more and longer cloud is resisted by the channel, the more pressure there will be on vendors who have heavily invested in cloud to push directly. 

As cloud solutions move towards more competitive and flexible billing their will of course be challenges for the traditional reseller approach, but these are not insurmountable if the adoption and adaption to these starts now. Leave it too far down the path and the transition will be painful and like jumping off a cliff, rather than going down a gentle gradient as the landscape changes. 

There are already plenty of examples of pure play cloud resellers, oft newly started by employees made redundant and deciding now is the time to make their own path.  They are growing fast with low cost overheads, no legacy renewals or worry about cannibalising existing business. Everything is upside to them and they are showing the example that cloud can be a reseller success and drive profitable revenue, different agreed, but why discount because of form factor and change. 

I still hear it asked often by Cloud Vendors, do we need a channel at all for cloud solutions and also occasionally this is coming from a person with Channel firmly in their job title, a worrying trend. A belief that the world has changed overnight, cloud can only be sold direct, there is no need for a channel . Yes in retail cloud has enamoured change, and consumers are changing buying patterns, particularly the young. But still there is a place for the brick and mortar retailer. The supermarkets are booming, they have taken on more ranges branching into videos, books, home appliances and even banking and insurance.  Being able to adapt is key to survival and surely us as an educated species is capable of doing this when it comes to Cloud.  

What we will see for sure is a change of the go to market landscape. Traditional resellers may find themselves having new competitors in this arena. It will not necessarily be one of their reseller peers bidding against them but perhaps a Managed Service Provider (MSP), an Internet Services Provider (ISP) or a telecoms reseller bidding cloud as part of their monthly billing solution set. 

The Telco and Xsp type go to market channels are expanding into cloud for many reasons. Key is the fact that they already have the billing models and customer relationships in place. They already have customers who they bill monthly for example for a range of services and much like with mobile phones where the market has expanded from the basic access contract to a variety of additional services such as TXT messaging, video download allowance, web browsing, roaming hotspot service etc  the providers are now seeking additional services which they can offer to their client relationships and billing cycles.  Contrary to this the IT market in general has been delivered on a supply and pay up front model historically. Cloud is changing the model to one where IT is delivered online in a periodic billing model and the value the channel brings is evolving. Telco’s as part of this have a large base of customer relationships to leverage, the infrastructure and funds to build out cloud services and the billing tools and relationships to handle what customers will expect. IT channels are going to have to adapt to this as they find new competition from the Telco and Xsp space. Also we are likely to see an increase in Communication providers (those provide telephony and the services and billing around this)  and theoretically anyone who has a large spread of customer billing relationships, perhaps we will even see cloud services being sold through surprising channels down the line such as the supermarkets (perhaps selling cloud units, storage or credits much like mobile phone credits today).  After all, go back 20 years and no one would have believed that you would be banking and insuring through this route to market. 

Cloud is here to stay, under whatever name you wish to call it (SaaS, Public, etc) and customers will increasingly become comfortable with its form factor and delivery and as this happens if you as a channel have not given them enough value to buy it though you, likelihood is they won’t.  Leverage your customer relationships now, talk to your clients about this new arena, educate yourself and work out the sweet spot for you and execute against it.