Monthly Archives: February 2010

Yesterday CA Inc., the enterprise IT company formerly known as Computer Associates, announced its intent to acquire the cloud computing provider 3Tera. Even though the details of the deal are not available, there are some unconfirmed reports going around the blogosphere and twitterverse saying it could be 30x the current 3Tera revenue. This acquisition follows CA’s other acquisitions relevant to cloud space like Cassatt, NetQoS and Oblicore. This news has the potential to shake up the enterprise cloud computing market.

Traditionally, CA is a leading player in Enterprise IT Management software for mainframes and distributed systems. After the controversy surrounding the indictment of their then CEO, Sanjay Kumar, in the mid part of last decade, they put their house in order and started pushing products around “Lean IT” campaign. As cloud computing gained steam towards the end of the last decade and the recession forced the enterprises to take a second look at the cloud for adoption, CA was busy acquiring companies like NetQOS, Oblicore and Cassatt. But there were no telltale signs of any immediate cloud play. It appears, with all these acquisitions, CA was putting the necessary pieces of puzzle in place to take off as a strong and credible IaaS player. 3Tera’s acquisition gives us some hints about what is going to come out of CA in the coming years. It also sends a unambiguous signal that they are in for a long haul.

CA’s path to cloud nirvana through acquisitions is hardly surprising because CA is, in fact, built by a series of acquisitions from 1977 onwards. Already the blogosphere was buzzing around with the news that CA plans to spend $300 million buying cloud startups. So, their strategy to buy 3Tera is not at all surprising. I will briefly analyze the impact of this acquisition.

• First and foremost, this deal firmly puts an end to the spin that cloud computing is all hype and a marketing term. This move by a traditional IT vendor is a clear message that cloud computing is the future for the enterprises. We are soon going to see more and more enterprise customers jumping into the cloud bandwagon.
• This could also be considered as a beginning of consolidation in the infrastructure space. Even though I don’t believe in the idea of monopoly of handful of infrastructure players, a shakeup through consolidation will always be there in a maturing market. This just shows the maturation of the cloud computing market leading to more and more enterprise adoption.
• This also puts CA as one of stronger contenders in the Cloud infrastructure marketplace. It is like a parachute for CA to jump right into the middle of this competitive marketplace without any hard work. Well, we cannot consider CA to be an innovator like other cloud startups in the market and the only way for a titan from the old world to get into the mix of the new generation is by acquiring a hot company like 3Tera.
• This is also a good news to other small players in the industry. It legitimizes their approach and offers them hope that someone else might come knocking on their door pretty soon. Overall such a consolidation advances the cloud marketplace to the next level.

Even though it is exciting from many angles, I do have some concerns about this merger.

• When I think of this acquisition of 3tera, the first thing that comes to my mind is “why CA?”. Personally, I strongly believe that a titan from a previous generation cannot innovate in the next generation like some of their newer counterparts. I am sure some of the fellow members of Clouderati will vehemently criticize this belief but I think of it as IBM in the desktop world dominated by Microsoft. They can do some interesting things but the innovation vigor will be lacking. Frankly, I just don’t like a old world enterprise guy messing around with clouds.
• Another important concern is what will happen to Applogic? Will it continue to be an independent product? From all the indications in the press, I get a feeling that it is going to be tightly integrated with CA’s existing product lines. If it happens, some of the existing 3Tera customers, especially the small and medium sized ones, will be left in a lurch. A move away from the current standalone version of Applogic software could be disastrous for these 3Tera’s clients. I spoke with one of their clients today and asked them about their strategy in the aftermath of this news. They told me that they are cautiously optimistic and their sources in 3tera has given them assurances about long term support for Applogic. Realizing this predicament of 3Tera’s customers, their competitors have already started to fish in the troubled waters.

It will be interesting to see how it plays out in the long term. It will also be interesting to see who is the next target for CA with the rest of $300 Million they have have in the pockets.

We live in an era where we consume computing through API and socialize through mashups. Our wide ranging computing needs from mobile apps to social networks to SaaS, brings API to the forefront of our computing senses. To cater to the needs of this API generation, Santa Clara based Sonoa Systems has already launched a service called Apigee which is still in private beta. Apigee is a freemium, self service, API management tools for Web APIs.

For websites like personal homepage or blogs, we use Google Analytics tool to get information on the website visitors and their activities. However, tools like Google Analytics are not useful with APIs. In this era where we consume everything through API, there is clearly a need for a tool like Apigee. Sonoa is already a leader in the enterprise API analytics marketplace. With Apigee, a robust service built with Sonoa’s expertise, they are positioning themselves to lead in the cloud computing and social computing era. Apigee is well suited to help any provider who exposes their services through APIs. By using the freemium, self service model, they are emulating the strategies predominant in the SaaS marketplace.

Earlier Sonoa went after the Mobile market space with a proxy service called Mobile App Acceleration. This service helped mobile developers speed up their mobile application by several fold. Now, through Apigee, Sonoa is targeting developers who develop apps for social networking platform. Apigee provides insight into the emergence of new application trends, with the most popular applications revolving around location-based functionality, as well as a growing social media mashup trend. Popular examples of applications currently using Apigee include:

• mLocal: Allows users to easily access local online classifieds ads;
• Social Mention: Providing indicators of social sentiment as captured across popular social networking platforms;
• Flickr Photosets: Built using the Flickr and Facebook APIs proxied through Apigee, it’s the fastest and most intuitive Flickr app on Facebook, enabling users to view and share comments.

Their free basic version allows upto 10,000 API requests/hour. Their premium service for higher traffic volumes is less than $100/month. Some of the significant features in the Apigee service are

• API Analytics
• API Protection
• API Control

Today the company announced the addition of some new security features that wil help the service gain further traction. To start with, there is a new revamped web interface. They have also added animated API setup and rate limiting dialogues to speed up the setup process for the users. In addition to these features, they have also added some security features like SSL support for APIs using HTTPS and opening up of prominent APIs including PayPal.

This service completely simplifies how service providers can monitor the traction, user behavior, etc. of their service at a very low cost. This is a great tool for web developers trying to mashup services from many different sources. There is a huge potential for this service in both consumer and enterprise space. As business is picking up in the ecosystems around mobile platforms and social networking platforms, a tool like Apigee could be a real game changer.

Open-Xchange, pushed as an open source alternative to Microsoft Exchange, is a versatile collaboration tool helping enterprises, academia and government take advantage of their smart collaboration capabilities. In this era where having a good collaboration platform is turning out to be a competitive advantage, Open-Xchange is better positioned in the marketplace due to their open source philosophy.

I am a strong proponent of open source in cloud computing. Open source, along with open architecture, can play a major role in keeping the playing field leveled in the cloud computing marketplace. On the other hand, cloud computing, in general, and SaaS, in particular, can help open source vendors monetize their products. SaaS is turning out to be a great business model for open source vendors.

Open-Xchange realized this potential and started reaching out to SaaS providers with comprehensive solutions developed in partnership with top tier technology partners like Novell, Parallels, Red Hat, and Univention. Their Shared Hosting Edition and Appliance Edition are used by many service providers to offer SaaS solutions to their own customers. Such open source products help many traditional service providers to reposition themselves as SaaS providers due to the following advantages

• Low TCO of open source products helps these service providers offer SaaS offerings within the realm of cloud economics
• The permissive open source licenses gives them an opportunity to add features which help the service providers differentiate themselves from their competition

Recently, Open-Xchange partnered with Bull, the Paris based service provider, to offer Open-Xchange to German customers both as a SaaS version and, also, as a on-premise version. Today, Open-Xchange has announced its partnership with Germany based email security vendor, eleven, to offer spam, malware and anti-virus protection to users of Open-Xchange platform. These partnerships forged by Open-Xchange is going to help their SaaS clients to add value on top of their open-xchange based SaaS offerings in the future. For example, Bull Germany will add SaaS offerings such as anti-spam, anti-virus, backup and revision-secure e-mail archiving soon.

Looking at these developments, we can conclude that SaaS is proliferating into markets around the world due to the repositioning by the traditional IT service providers and telecoms. Open source is making this progression easier. More importantly, SaaS is giving a lease of life to many open source vendors who had difficulty monetizing their products.

Google Gears, a technology developed by Google to offer offline functionality for browser based SaaS applications, is officially dead. Google today announced that they are not developing Google Gears any more because they plan to push this offline functionality into HTML 5.

Once in the early days of SaaS, Google Gears was very attractive to many SaaS vendors. I even argued that it is a lifeline for SaaS. After the initial buzz died down, I was talking to many SaaS vendors and some of them mentioned that even though they don’t see significant use of Gears by their users, it was one of the things users were looking forward while evaluating SaaS applications for adoption. Eventually, the development of Gears slowed down.

In the mean time, Google got busy with developing Chrome browser. In January, they released a version of Chrome that had native support for database API similar to the one had by Gears along with APIs like Local Storage and Web Sockets. In fact, tech blogosphere was buzzing with talk about lack of interest on Google’s side for the development of Gears. Today’s announcement puts an end to any speculation firmly confirming that Google will eventually end support for Gears and focus more on getting the features inside HTML 5.