That said, for those of us who have always been a bit blasé about just how pervasive this sort of surveillance is across the internet, it’s well worth watching this presentation given recently by Caspar Bowden, one time Chief Privacy Adviser to Microsoft and now strong advocate for privacy rights. Essentially Bowden details just how expansive the spy network is and just how strongly legislation ignores the rights of non US citizens. It’s a real eye opener and well worth watching Bowden’s presentation below:

Which brings us along to more recent posts suggesting that PRISM is a fantastic opportunity for cloud providers outside of the US to differentiate themselves on the basis of privacy. My friend and German-based industry analyst Rene Bust wrote an excellent post in which he rightly pointed out that PRISM plays directly into the hand of non-US cloud providers. Given his location Bust unsurprisingly pointed out the real fillip it gives to German cloud providers in particular, and European ones more generally.

Cloud granularity is a topic I’ve been banging on about for a few years now – partially because of concerns about US legislation such as the PATRIOT Act, but also because different geographies and workloads have different requirements – be they privacy, latency, local support or whatever, that mean a “one size fits all”, US-centric approach is sub optimal in many situations. Bust puts this purely in terms of the fallout from PRISM when he says that:

European and German cloud computing providers play this scandal into the hands and will ensure that the European cloud computing market will grow stronger in the future than predicted. Because the trust in the United States and its vendors, the U.S. government massively destroyed itself and thus have them on its conscience, whereby companies, today, have to look for alternatives

But I’d suggest it’s a situation that existed long before PRISM was known about, and will continue to exist for multiple reasons into the future. In fact I’d go so far as to say that granular cloud as a foil to PRISM is potentially ineffective. The recent debacle in my own country when MegaUpload founder Kim Dotcom was arrested, potentially outside of the law in this country, but at the behest of the US, gives an indication of the power the US holds globally. It’s not a conspiracy theory to suggest that the US can likely access data stored with non US located cloud providers – the US spy tentacles reach far and likely hold sway in every corner of the globe. Whether it is by way of covert surveillance on foreign territory or via diplomatic pressure on foreign governments – there is no denying the broad power the US enjoys.

So where does that leave us? Well firstly, cloud granularity was a good idea long before PRISM and will continue to be so. PRISM doesn’t call into question the entire cloud, rather it reminds the citizenry of the power we grant to our governments. Finally we’re being naïve if we think PRISM is as far as this thing is going. Watching Bowden’s presentation might chill you if you’re a civil libertarian and you might shrug it off if you’re blasé about all this stuff but one thing is for sure – there’s far more private data under the watchful eye of intelligence agencies than we would have ever believed.

Over the week I’ll be taking part in three different sessions. First up at Forecast I’ll be moderating a panel looking at the current attention that private cloud is getting and trying to draw some conclusion and future predictions – is private cloud merely a stepping stone to the public cloud or will it continue to be an integral part of the way IT is delivered. I’ll be joined on the panel by a great selection of both vendors and customers including:

• Herb Congdon, Associate Vice-President of Technology & Standards at TIA
• Dawn Jutla from the OASIS Board of Directors
• Gordon Haff, Senior Cloud Strategy Marketing and Evangelism Manager at RedHat
• David Casper, Executive Director of UBS
• Mark Atwood, Director of Open Source Engagement at HP
• Ray Solnik, President of Appnomic

Anyone who is interested and hasn’t yet registered can use code SPSC-13 to register for the event here.

Next up I’ll be at Structure where I have two sessions. Firstly I’ve been asked to moderate a sponsored session from VirtueStream where we will look at addressing the key challenges enterprises face when moving mission-critical applications to the cloud. This will be a hands-on panel were we’ll explore best practices around security and compliance and delivering on relevant SLAs. I’ll be looking to extract some real world case studies and examples to illustrate the talk. Again for anyone who is interested in attending Structure, use this link for a discounted ticket.

Joining me on the panel will be

• Brian Gracely, VP, Product Management at Virtustream
• Rodney Rogers, Chairman and CEO at Virtustream

My final public engagement for the week I’m really looking forward to. I’ll be on a panel moderated by my good friend Paul Miller. The panel will seek to give some clarity around what we’re calling the “Multi-cloud opportunity”. The panel will no doubt extend the topic from my ODCA session a few days earlier and we’ll talk about the emergence of hybrid cloud – the motivations for its adoption, the implications for customers and vendors and the prognosis for this hybrid approach. In a real rarity for a Bay Area event, three of the four speakers will have a non-US accent, that in itself is noteworthy! The session will be made up of the following fine folks:

• Paul Miller, Founder, Cloud of Data and Analyst, GigaOM Research
• David Linthicum, SVP, Cloud Technology Partners and Analyst, GigaOM Research
• Jo Maitland, Director, GigaOM Research

It’s going to be an excellent, albeit busy, week. Looking forward to catching up with many followers there.

At the same time as this conceptual debate occurs, we have discussion about what a cloud broker actually is – with some people suggesting that anyone who provides a “single pane of glass” to disparate infrastructure is a cloud broker. While these vendors do an important job, they do so as a technical intermediary. Cloud brokers on the other hand are a financial intermediary and that is a very different relationship. In a recent blog post, John Cowan, the CEO of 6Fusion, summed it up well when he said that

Cloud brokers will focus on the business of compute rather than the technical organization of compute.  And the business of compute has nothing to do with cloud computing or the technology driving this revolution.  The business of compute is about the commoditization of compute, network and storage infrastructure

I’ve been thinking about this distinction a lot lately – since I’ve been spending time talking with the team from Cloud Options a company that is genuinely trying to deliver a financial cloud broker service. As CEO James Mitchell says:

The guys that are trying to sit in between the cloud suppliers and the cloud buyers in the billing chain, allowing each to buy or sell on a financial deal that suits their own circumstances, are true cloud brokers. They are the guys that hedge against the risk of changing expectations of future cloud pricing and buying on larger volumes for longer durations, only to further break those volumes into smaller blocks that match a buyer’s forecast cloud needs

Cloud Options (or, more correctly, its parent company Strategic Blue) is taking part in TechStars Cloud in San Antonio, and I’ve been interested to see how their message and positioning has changed over the time of the program. They’re a company I’m very positive about, partly because I believe they are solving a problem which really exists, and partly because of the makeup of the team.

You see there are two worlds at play in technology – the business world and the technical one. Vendors who provide a product that meets a pressing business need need to be focused on the business conversation, and staffed by people who can focus on the business realm. In the same way that I’d much rather that the broker selling me an insurance policy for my business was an expert in insurance rather than an expert in the minutiae of my particular business, so too should one expect a true cloud broker to have a deep understanding of the business drivers and issues around brokerage. Yes they need to understand the technology landscape, but more importantly they need to understand the true role of the broker. Cloud brokerage is, as the meme goes, “a thing”, but cloud brokers need to be focused on their business case rather than the technical one. And vendors offering a technical single pain of glass to heterogeneous infrastructure, what you do is vitally important, just please don’t call it brokerage.

Here’s one I think the company will pursue, if it’s not doing it already. In the U.S., Amazon’s GovCloud is a separate region that complies with regulations above and beyond what other regions do so that federal, state and government agencies can use it. Given data privacy concerns in Europe and some other regions, it would be fruitful for Amazon to think about setting up analogous secure clouds outside the U.S

Barb’s post looks specifically at specific cloud for particular government applications – but if we take a step bake and look more broadly, we can see the direction that large cloud vendors will take in relation to an ongoing margin and commoditization pressure on their services. How will the incumbent vendors (AWS, Rackspace et al) counter this process?

Geographic Granularity

The first way is to start offering specific granular offerings. We’ve seen a rapid escalation in new regions being supported by these cloud vendors (of late Australia seems to be flavor of the month) and we’ll continue to see vendors build out zones at an ever increasing rate as they seek to provide a compelling answer to the data-location question that many customers have. This will be the first avenue of attack for IaaS vendors.

Stack Creation Granularity

We’ve already seen this move from a number of vendors – AWS continues to build out higher-stack functionality, Rackspace makes acquisitions that see them offer higher level services. More and more we’ll see compelling propositions from IaaS vendors that, while not called PaaS as such, start to build a PaaS-like offering on top of their infrastructure. The days of cloud infrastructure being merely about storage and compute are completely over, the future lies in an uber-flexible platform that allows teams to tailor specify their stack to their requirements – all through one vendor, one SLA and one billing relationship.

Use Case Granularity

There are times that location of data is only one of many specific requirements that customers have. In these situations we’ll see IaaS vendors build out specific ring-fenced solutions for particular clients (Governments, large health or financial organizations for example). In doing so they’ll attempt to provide the benefits they offer to less regulated industries, but in a way that meets the compliance requirements of heavily regulated industries or groups.

Summary

Three different approaches towards differentiation but all three will be targeted in different ways by the large infrastructure vendors. In the mean time the incumbents in any one of these particular areas (for example an incumbent hosting vendor in a specific location, an incumbent vendor providing specific FinSec solutions or whatever) will attempt to “cloudify” their operations to deliver the self-service, scalability and automation that cloud vendors deliver. Look to a host of startups providing services to these traditional vendors to gain prominence in the time ahead and traditional hosters need to invest in technologies that allow them to compete.

Around 18 months ago I was introduced to Mark Cox and Tyler Power, two smart guys from my hometown who were building a PaaS management product around the Cloud Foundry ecosystem. The fact that anyone in Christchurch had heard of PaaS, let alone Cloud Foundry, was frankly amazing to me so I met up with the guys. I was immediately impressed by their pedigree and what they were doing and they quickly asked me to come on board as an adviser. I went one better and offered to invest in the company to help them build out their vision.

Over the next year or so they  had some real success, there was a slight pivot into a really interesting developer social stream application and a lot of interest and uptake from developers all around the world. Alongside this interest came the obvious attention of vendors who were excited by what Appsecute was doing. That excitement culminated today in the announcement that development lifecycle and PaaS vendor ActiveState has acquired Appsecute and will pair the Appsecute social time line with ActiveState’s Stackato private PaaS.

The combination is logical – adding the social timeline to Stackato provides an integrated end to end solution for enterprise customers. The open nature of the Appsecute connector platform also introduces interesting potential for ActiveState customers to integrate solutions into the disparate systems they already use.

It’s news that is exciting for me on a number of levels – as an early backer of Appsecute I get to see their initial vision taken to a higher level with the addition of resource and market traction that ActiveState has. As an advocate for technology companies in New Zealand I see a local startup make good – and the local ecosystem benefit from the creation of what will become ActiveState’s New Zealand operation. Most of all though I’m excited that Cox and Tyler will be able to continue developing and growing the Appsecute community under the umbrella of the broader ActiveState organization.

Good work guys, job done. Now it’s time to get back to work and keep building.

Dell – Taming the Complexity

As Barton George from Dell wrote in his blog post announcing the move away from their own public cloud, Dell doesn’t believe it can contain all different use cases within its own stable. As he said:

we’ve come to realize that the greatest way we can provide value for our customers is to focus our investments on more strategic components of the cloud and provide our customers with maximum choice and flexibility. As a result, rather than building out and supporting our own multi-tenant public cloud, we will partner with companies in order to provide customers access to the cloud(s) of their choice

It’s an interesting perspective, particularly since Dell was one of the early backers of OpenStack. Here we have a vendor known traditionally as a supplier of hardware, deciding to move away from offering a service built on top of that hardware. But we also see a company coming to a decision based both on fear of a backlash from its customers, and a realization that competing with the massive public cloud players is a road to pain. In making this decision, Dell has had to look for opportunities that avoid it alienating its existing independent IaaS customers (no one wants their supplier to compete with them, a fact not lost to the commentators when it comes to Amazon competing with massive AWS customer Netflix). At the same time it wants to be able to sell a value-added product rather than plain storage and compute which is fast becoming, if not a commodity, at least a diminishing margin product.

Instead Dell has decided that its best opportunity lies in creating the orchestration layer that sits atop of heterogeneous infrastructure – it’s an approach that I’m pretty positive about – I often talk about the big opportunities in the cloud resting on these type of “fabric” plays – platforms that span a number of different solutions (be they infrastructure, platform or software) and tie them together under the “single pane of glass”. For this reason, and given Dell’s situation, backing away from the public cloud at the same time as acquiring enStratius makes perfect sense.

So under the same lens, is the VMware hybrid cloud destined to failure? Not so fast.

VMware – Delivering on a Roadmap for Customers

VMware is a company that is often derided as the creator of enterprise FUD – this was clearly evident in CEO Pat Gelsinger‘s recent presentation to partners where he made them tremble with the assertion that a workload lost to AWS is a workload lost forever. But if we look beyond the sabre rattling, there is a definite method to the madness.

The bottom line is that while cloud vendors are quick to write case studies about the large enterprise customers using their services, there’s a massive amount of enterprise IT still sitting on “old tin”. People like to chuckle about the critical airline systems still running on mainframes – but it’s a fact – the life cycle for critical enterprise technology is surprisingly long and if you’re an enterprise decision maker – deciding to leave something alone that is still working is a no brainer – if it ain’t broke, don’t fix it.

In this situation, CIOs aren’t looking for case studies and solution sets that see them move everything en masse to this fabled cloud thing. What they’re looking for is a vendor who can support their existing technology landscape, but still give them a compelling story around moving appropriate workloads to the cloud. Of course it seems a little funny hearing this conservative message from VMware the company that is, after all, the home of virtualization and hence the disruptor of many bare metal use cases. It’s of the nature of things however to see companies attempt to gain maximum leverage out of previously innovative products – this is a topic that my friend Simon Wardley has written about at length.

VMware’s strategy one which makes sense for its current technology portfolio and customer spread – but it too needs to be mindful of the concerns of its partner channel who will undoubtedly feel a little uncomfortable with the idea of VMware, or particular partners, competing with them. The devil here is in the detail and we’re yet to see a clear indication of how VMware will navigate this path.

Summary

Interesting times in IT land – and two companies showing different, but interesting strategies. Shawn Douglass, CTO of ServiceMesh, hit the nail on the head when he commented about the dual announcements saying:

we see a pattern emerging of traditional IT Management vendors looking for new ways to ensure they have a ‘play’ as the hybrid cloud evolves and emerges. Beyond ensuring their own livelihood, however, what will be important to watch is how this evolves with management and compliance in mind. After all, the value is not in the virtualization of disk, compute and storage but in orchestration of those resources in the context of the application lifecycle, provisioning on the right infrastructure at the right time and place, in consideration of power, cooling and cost to meet service level objectives and governance requirements of the business

We’ve only just started moving along the continuum of legacy vendors reinventing themselves for the modern world – expect to see more interesting decisions coming in the weeks and months ahead.

As Xero has built scale in their product, they’ve had a chance to look at higher level functionality – case in point is the integration of payment services that Xero introduced this week. A few months ago Xero rolled out online invoices – essentially what this meant was that rather than emailing or posting a static document for an invoice, Xero users could offer their customers a specific URL which took them to an online invoice. At the time there was some disquiet from the Xero community about the move. As I said in a post at the time:

An added part of the roll out however was the introduction of a link at the top of online invoices which takes customers to a customer portal where they can see their invoicing history and amounts outstanding. Again a super valuable addition to the product. Things got a little unstuck however due to Xero’s understandable desire to track an audit trail around who is opening these invoices. The “link to other invoices” button takes end customers (ie the customers of Xero users) to a page which allows them to either login to Xero (if they’re already a user) or set up a free Xero login that gives them access to their invoice history.

This is a seemingly innocuous step, and one which, after the small hurdle of registering, will drive some real efficiencies for businesses. The problem, as shown from the large number of comments on the Xero blog post is that this is the first time that the customers of Xero users have been presented with anything that specifies the origination of the invoice. Previously emailed or printed invoices came in a fairly generic format that could have come from any number of accounting solutions (or a word template for that matter).

Soon after the online invoice introduction I bumped into Xero head of design Philip Fierlinger and we chatted about the realities of introducing a piece of functionality that will, in time, offer users significant added value – there’s always the inevitable push back from those who have concerns about the reasoning behind the move. As I noted in the original post, perhaps Xero could have introduced the functionality a slightly different way, but focusing on that misses the point of the downstream benefits that can be driven.

Which brings us back to the announcement this week. Essentially what it means is that customers who view an online invoice see a big fat “Pay Now” button which they can click on – they enter their credit card details and the payment is processed. It saves lots of time for the end customers, and for the Xero user it closes the loop between invoicing and accounting – the money shows in their nominated bank account, the payment is automatically created in Xero and tied to the relevant invoice line. It’s a little thing, but another proof point of the inherent value of cloud versus desktop software. At the moment this functionality is integrated with the following payment services:

• PayPal (Global)
• GoCardless (UK)
• Stripe (US)
• eWay (NZ, AU and the UK) – to be released in the next few weeks
• DPS Payment Express (AU, NZ, UK, US, SA and Asia)

It’s a valuable service, both in its own rights, but also as an indication of where value can be delivered by cloud solutions. Xero isn’t the first to do it, FreeAgent rolled it out last year for example, but it’s something that is unique to cloud solutions and is a good indication of where the future lies.

• vCloud Hybrid Service Dedicated Cloud: Provides physically isolated and reserved compute resources, as well as a private cloud instance. Sold on an annual term with pricing starting at $0.13/hour
• vCloud Hybrid Service Virtual Private Cloud: Multitenant compute resource model, but with dedicated allocations for customers. Sold on a monthly term with pricing starting at $0.045/hour

It would be very easy to get critical at this announcement, and gasp at the fact that a company that formerly hated on the public cloud is now turning around and offering a hybrid solution. But that attitude ignores the reality for VMware customers who are often conservative and have only just developed an appetite for taking tentative first steps into the public cloud.

For those customers – application portability, an architecture they’re familiar with and an invoice from a vendor they’re already deeply partnered with is important. That’s the bottom line and the reason that, despite what the purists will say, this initiative will gain some traction.

It’s no threat to the big cloud providers of course, but it does raise some questions for those companies who make their income by helping large organizations built private clouds – their world just got a little bit more complicated.

In terms of technology, vCloud Hybrid Service will offer a simplified approach to management, allowing VMware customers to use the same tools and processes they use today to manage both on-premise and off-premise environments.  They’ll do this via the free vCloud Connector plug-in. As an interesting aside, VMware selected cloud automation technologies from Puppet Labs for the orchestration part of the offering – not surprising when one considers that  the company recently announced that it was putting $30M into Puppet Labs.

VMware is holding out an olive branch to partners – vCloud Hybrid Service can be sold the same way as on-premise VMware licenses with a standard SKU, and partners can retain the billing relationship with customers.

Interesting times huh?

• Google Compute Engine is now in general availability
• GCE offers sub-hour billing charges for instances in one-minute increments with a ten-minute minimum
• Shared-core instances provide smaller instance shapes for low-intensity workloads
• Persistent disks support up to 10 terabytes per volume
• Google App Engine adds PHP support
• GCE, GCS and GAE all achieve ISO 27001 certification
• Google launches Cloud Datastore, a schema-less solution for storing non-relational data

Right, on to the insight. We’ve been waiting a long time for a real competitor to AWS to appear. Even Adrian Cockcroft, Chief Cloud Architect for Netflix and perhaps the biggest platform evangelist for AWS (either inside or outside of AWS) has stated that he’d love to see some credible alternatives to the Seattle behemoth to appear. As OpenStack moves more and more into a private cloud play, and Microsoft continues to confuse the world about exactly what its cloud platform is, those options have been sparse (actually, non existent).

That could change very quickly now as Google sees to be diverting some considerable attention to it’s compute platform. As my buddy Alex Williams pointed out, Google Compute Engine was one of the top three areas for attention on the IO agenda – that is indicative of Google’s strategy and is, at least in part, an affirmation that the Goog has been looking closely at the massive adoption that AWS has. Not so much because of the revenue it can drive (although that too) but more because whoever deliver the platform chosen by developers is well positioned to capture the bulk of the highly valuable user data that Google has so effectively monetized.

It was interesting to contrast the attitudes towards GCE that were evident at Cloud 2020, the cloud summit myself and colleague Krishnan Subramanian put on in Vegas the week before IO. There were two distinct opinions raised at that event:

• Google has the scale and experience to be a real competitor to AWS in the public cloud space
• Google is a high margin business, which Amazon is in the low margin one. As such Google’s new found love affair with the public cloud will soon wane

I think it’s short sighted to write off Google merely from a first degree margin perspective Google of all organizations knows the value of secondary monetization of user data and has built a business out of giving away commodity services in order to mine and leverage the data it can extract from those services. GCE is hardly likely to be significantly different. if we accept that Google is committed to GCE, then it’s time to look at what sort of growth expectation that platform is likely to gain.

Massive – quite simply AWS should be very concerned about this news for two distinct reasons.

Firstly – Google has arguably the best experience of any organization on earth at building massive scale data centers, networking elements and distribution networks. They deliver incredible scale computation on a global basis with high degrees of reliability. With all of that plumbing in place, it’s not surprising that the past few months have seen Google very quickly expose functionality to customers. I’ll say it again, the functionality is all there, Google now just needs to expose the APIs to allow people to use it. The fact that Google has little to build beyond the endpoints means that the relative pace at which they can roll out functionality is higher than its competitors.

Secondly – Developers are increasingly wishing to make use of the APIs that surround the data and services that Google holds. Given the option of using a public cloud provider whose infrastructure sits right next to that data, it makes sense for developers to use Google as their infrastructure of choice – it’s a nice solution to at least part of the data gravity problem that developers face. Add to that the release of the higher-value products that Google offers (Android Studio for example) and there’s some extra value built in to the Google platform that AWS can’t replicate.

During IO I took the opportunity to talk with some developers and ISVs who have been using the Google Cloud Platform – they report a truly amazing level of performance. In fact one person I talked with suggested that the performance for his management solution was better than if he was using physical hardware with storage and compute in the same rack. This performance is a function of the amazingly performant network that Google has built over the years.

So. Is GCE a complete slam dunk? Not yet. Google has yet to prove that it really understands enterprise needs, and it needs to prove it’s in this business for the long haul. The fact that Google Apps, for example, was hardly even mentioned at IO is an indication that this is a company that has a fairly relaxed attitude towards what business really needs. Google needs, if they’re serious about being a credible IaaS provider for larger workloads, to build out the non technology aspects of a vendor – on that count we’re yet to see what will happen.

That said there was an interesting announcement at the tail end of IO on Friday. Details are scant but apparently Google showcased some new networking capabilities that enable hybrid clouds to run between GCE deployments and on-premise data centers. The functionality allows customers to establish virtual private Layer 3 networks and assign static IP addresses to instances. Apparently there is the ability to connect networks and run load balancing across them. Details are scant but it’s an unusual, and surprisingly business-focused offering.

Frankly having AWS as the kind of the IaaS castle has been boring. All things being equal, Google announced to the world last week that it’s committed to storming the castle. Time will tell if it succeeds, or drowns in the moat.

…providing virtual environments in the cloud. CloudShare’s self-service SaaS platform and suite of solutions enable business users to build, freeze and share complex computing environments

The company boasts of over 175,000 users worldwide and more than half of the Fortune 100 as customers. Anyway – today CloudShare is extending their platform to deliver upon the needs of development and testing groups. CloudShare Labs is a self-service solution that delivers cloud infrastructure but in a way that is optimized for the particular use case of the department needing it. Particular capabilities of the platform include:

• Simplified Bug Fixing: The solution enables the capture of a multi-VM disk and memory state, literally freezing a bug in its environment so it can be shared with developers and corrected without having to reproduce the bug in a different environment
• Environment Cloning and Template Libraries: The ability to clone a master environment eliminates mistakes caused by misconfiguration and enables collaboration among cross-functional and dispersed teams through a web browser, console or SSH session. Groups can also create and store libraries of templates for later reuse
• Integration: The new solution integrates with the leading application lifecycle management (ALM) and software development lifecycle (SDLC) processes and tools, such as Team Foundation Server and Jenkins
• Remote Access: CloudShare Labs extends an organization’s existing on-premise development and testing environment to the cloud. Using an organization’s virtual private network (VPN), teams can connect to CloudShare to burst for more resources or collaborate with anyone, anywhere in the world.

It’s actually a compelling argument – individual development team are using so many specific functional tools that the idea of creating a one-size-fits-all development recipe that will cover all the different needs of a development organization is untenable. Rather what is needed is the ability to create libraries of stack templates, and to clone these environments as and when required. The environment cloning and template library aspects of CloudShare Labs make sense. The ability to “freeze” an environment mid-error and in doing so to more readily track and fix bugs is also a logical and compelling proposition.

The CloudShare approach is an interesting one and will suit large enterprises with a wide and diverse spread of development approaches and methodologies – it will be interesting to see the uptake that the product gains in the marketplace.