5
Mar

Perhaps accurate metrics on the extent of cloud adoption are not important

2-Color-Design-Hi-Res-100px-widthA lot has been made over the last few weeks about a skew between Microsoft’s announcements about sales of cloud SaaS and PaaS subscriptions to enterprise business and the extent to which these subscriptions are actually used. For any readers unfamiliar with the current chatter about Microsoft on this topic, an article titled Microsoft’s Cloud Successes Based on Sales Not Usage? may provide a quick introduction to this tract of opinion.

But what if the question of adoption really does not matter? What if the more important metric, at least at present, meaning March 2015, are the actual statistics of big businesses signing onto Office 365 and/or Azure? After all, to what extent are businesses using all of the components in the Google Apps for Business set? I would argue not much.

In fact it may simply be too soon to expect high levels of enterprise business adoption of cloud computing services. If nothing else stands in the way, simply consider the current noise about the insecurity of data communications via public cloud options. Surely most readers will attest to a deafening volume, with some new, prominent business or US government agency pushed into the limelight almost on a daily basis. Why would 28K people at Merck (simply to name one very large organization) drop their other computing options to embrace Office in the cloud given the potential risks?

But according to what most readers will likely take to be a combination of a testimonial, and a customer success story, Merck has, nevertheless, purchased Office 365 and is using it. The Office blog on March 5, 2015 featured an article titled A new foundation for connected business processes at a German pharmaceutical and chemical company. This article is attributed to Dr. Matthias Geselle, who is introduced as “a Vice President, member of the IT leadership team at Merck.” The content describes a collaboration solution, named “Connect 15”, which is built on Microsoft components. “Connect 15” replaced a combination of Lotus Notes, “IBM Sametime”, and WebEx.

The Office blog includes a number of these articles. Perhaps some of the more vocal naysayers in this public discussion would benefit from reading them. Every one of the articles is written by a representative of the customer, meaning the enterprise business opting to purchase Microsoft’s cloud services. It is hard to argue with this type of testimonial.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2015 All Rights Reserved

20
Feb

Enterprise tech ISVs should recommend hybrid computing platform scenarios to their customers

2-Color-Design-Hi-Res-100px-widthEnterprise technology consumers have made their reluctance clear. In most cases they will not agree to incur the expense and effort required to migrate on-premises computing platforms, like Microsoft SharePoint, to public cloud tenancy. So the ISVs owning the IP supporting these platforms, Microsoft, Oracle, SAP, IBM, EMC, etc, should promote hybrid computing scenarios to these customers.

Anyone reading an article written by Jeffrey Schwartz, and published to the RedmondMag web site on February 20, 2015, will get this dose of reality. The article is titled SharePoint MVPs: ‘On-Prem is Very Much Alive and Well’, and is composed of a set of quotes from participants in a TweetJam, including Asif Rehmani, who is a client of ours. Rehmani is the CEO of VisualSP. VisualSP is also the name of Rehmani’s leading product, which, in my opinion, should be a core component in any adoption strategy for SharePoint for a large community of users. VisualSP provides SharePoint users with access to high powered technical tips, in video format, directly within the SharePoint workspace — in other words, “in-context”. This writer serves as Vice President for Business Development for Rehmani’s company.

The TweetJam was organized by Christian Buckley who also served as its moderator. Buckley, himself, is a SharePoint MVP and a familiar spokesperson on SharePoint topics.

The specific challenge platforms represent to stakeholders thinking about migrating enterprise applications to public cloud alternatives, is the opportunity users have, more often than not, seized to customize them. An ERP system built on SAP, Oracle, or Microsoft components, for example, usually includes an extensive set of features either provided by third parties, or built, from the ground up, with custom code. As the MVPs quoted in Schwartz’s article make clear, from their quotes, the effort required to migrate these “computing realms” entirely over to a public cloud PaaS like Office 365 is a non-starter.

Apparently Microsoft (the clear leader in this effort. Microsoft has used its “Mobile First, Cloud First” campaign to help its enterprise computing customers decide to migrate to Office 365 and Azure. The start of this campaign coincided with Satya Nadella’s ascendance to the position of CEO of the company in 2014. Nadella was the first to articulate this slogan of the Microsoft brand) has gotten this message. Several articles were published over the last two days about an event freshly added to the Microsoft Ignite schedule for May, 2014 — an early peek at SharePoint Server 2016.

This change is a healthy transformation of a campaign which appears to have been too brittle for its targeted audience to adopt. Hybrid computing scenarios, with a public cloud component supporting appropriately chosen computing requirements, operating, in tandem, with an on-premises data center, is the solution the enterprise computing market appears to favor. After all, no one likes ultimatums — least of all one’s core customers.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2015 All Rights Reserved

18
Feb

Microsoft and its partners continue efforts to take down obstacles to wider cloud adoption by enterprise business

2-Color-Design-Hi-Res-100px-widthRackspace, a leading provider of managed services to enterprise businesses, reported earnings on February 17, 2015. Some remarks from its CEO, Taylor Rhodes, point to what maybe a promising indicator of enterprise business moving towards increased use of cloud IaaS, PaaS, and SaaS services. Microsoft also previewed the coming release of an Active Directory tool, which should ease the difficulty of synchronizing on-premises AD and Azure cloud AD.

Rhodes’ remarks were quoted in an interview titled Rackspace CEO Rhodes: Price Cut Curve is Flattening Out. The interview was published on the Barrons web site and was conducted by Tiernan Ray.

The heartening indicators for anyone looking for signs of more movement by enterprise business communities of computing users towards cloud offers amounted to:

  • “The mainstream market has two problems: They have legacy apps that won’t go multi-tenant automatically; they want single-tenant versions along the way; and the second problem they have is this skills set gap. Cheap infrastructure is just pouring gas on the fire. There is a need for software and tools development. Companies are saying, I don’t have access to people who know how to run all those things”
  • and Ray’s summary of some other comments appears to have made during the interview: ” . . . the company [sees] more and more deals of $100,000 or more, some of it coming from competitors such as the telcos; rising organic revenue growth (it was 16.4% last quarter, excluding currency effects); and rising operating profit margin.”

The type of enterprise software Rhodes calls “legacy apps”, in my opinion includes the “customizations” of big server applications like SharePoint, which Microsoft has found so difficult for its customers to work with as they consider migrating some on-premises processes to the cloud. The recommended methods of dealing with palpable inconsistencies between what can be accomplished with these processes, on-premises, vs the same for cloud, whether via SharePoint Online/Office 365, or Azure IaaS/PaaS/SaaS, have been reduced from tightly woven “hybrid computing” to today’s “hybrid scenarios”, where almost wholly separate processes run locally and remotely, but in service to the same communities of users.

So Rhodes’ remarks about how Rackspace has captured some of this headache as tangible business and, even better, big ticket business (presumably with attractive margin) is a heartening note and, perhaps an indicator of better news to come.

The second breathe of fresh air on this challenge is to be found in a post to the RedmondMag website authored by Kurt Mackie. The post is titled Upcoming Perks of Azure Active Directory Connect Tool.

Anyone familiar with the kind of hybrid cloud computing requirements detailed by Microsoft SharePoint MVP Fabian Williams in a video tutorial set from VisualSP titled SharePoint 2013: Hybrid Cloud should understand the critical role Active Directory must play in any serious attempt to bolt a cloud component like Office 365 or some service, infrastructure or even platform running on Microsoft’s Azure cloud. The tool is certainly promising. Should the results produce a reliable directory of users for on-premises and cloud computing venues, increased enterprise adoption of the cloud component should become more of a realistic expectation for stakeholders.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2015 All Rights Reserved

2
Jan

PaaS is Oracle’s sweet spot for 2015

2-Color-Design-Hi-Res-100px-width During Oracle’s Q2 2015 earnings conference call, Larry Ellison, Executive Chairman and CTO informed his audience of analysts about the importance of platform as a service, PaaS to Oracle’s strategy to grow its cloud business. Per Ellison, PaaS is the differentiator promising to elevate Oracle’s cloud business from the commodity-driven world of infrastructure as a service (IaaS) to something more attractive, meaning a product with more promising return on investment given Oracle’s commitment to product development, general and administrative (G&A) expenses, and sales and marketing.

So what is the core of Oracle’s PaaS offer? Per Ellison, PaaS for Oracle amounts to the combination of the Java software language and Oracle’s database product. Ellison did not mention hardware, but, Mark Hurd, one of the two co-Presidents of the company (Safra Catz is the other co-President) cited surprising strength in sales of Oracle’s SPARC super cluster, and the SPARC database appliance later in the call during an answer to a question.

Leaving aside the highly competitive tone of Ellison’s comments (he mentioned Salesforce.com and Workday as direct competitors at numerous points), his PaaS claim is, in my opinion, credible. Oracle has demonstrated a clear commitment to defend the proprietary nature of its Java language, so it should be safe to assume customers will have to pay a price should they opt to use the language to customize solutions, build tools, etc. There was absolutely no specific mention of individual database products throughout the conference call, so it is also likely safe to assume management is confident in the attractiveness of Oracle’s traditional RDBMS products for its new found customer base for cloud offers. Of course, coming quarterly reports should be carefully reviewed to see if any mention of database product mix pops up. I was eager to hear some mention about the condition of Oracle’s own NoSQL database, but there was no mention of it. The only references to “big data” came up when Ellison spoke about Oracle’s Exalogic and Exadata servers.

The lengthy list of prominent larger businesses already committed to Oracle’s cloud offers, which Mark Hurd referred to as a list of “icons” is impressive, and, further, is also indicative of why a company like Oracle (much has been the case, I would argue, for Microsoft, as well) truly can benefit from expanding the volume of its cloud activity — and get paid for it. After all, each of the companies behind these icons is probably hosting one, or more of Oracle’s on-premises solutions. Oracle, Microsoft, IBM, SAP and EMC each stand to benefit from robust customer interest in hybrid computing scenarios as the result of large installed bases of on-premises computing systems.

In contract, Salesforce.com, Amazon, Google, Workday cannot leverage proprietary on-premises systems to achieve the same advantage.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

28
Oct

Let’s not underestimate the importance of hybrid cloud computing to Microsoft’s recent successful business quarter

During Microsoft’s recent Q1 2015 earning conference call, Brent Thill of UBS asked a question at the start of the analyst Q&A. This question provided Satya Nadella with an opportunity to present something about the importance of hybrid cloud computing to Microsoft’s success for the quarter. When asked what makes Microsoft’s cloud experience different from its peers, Nadella answered:

“As it turns out the technology that we build for our cloud is what we incorporate in our server products, in fact our R&D expense is the same expense. And that’s made our server products very competitive. And so again those our traditional competitors we’re seeing significant share gains across the entire infrastructure line of our server products in particular. And we hope to architected our cloud very differently. We are the only hyper scale cloud provider that also thinks of our server product at the edge of our cloud.” (quoted from a transcript of Microsoft’s Q1 2015 earnings conference call as published on Seeking Alpha)

The reference to “server product at the edge of our cloud” introduces hybrid cloud computing — where on premises and cloud servers are architected into a coordinated, comprehensive computing solution — to this otherwise purely financial discussion of Microsoft’s business performance for the quarter.

Microsoft certainly is uniquely capable of demonstrating the veracity of Nadella’s point, at least with regard to its more obvious cloud competitors — Google and Amazon. Noticeably absent from the comparison was IBM, which, (along with other mature ISVs firmly established in the typical data center for a large enterprise business), is, truly, an example of the only competition Microsoft is likely to face for this application of client server computing. Neither Google, nor Amazon supports an installed base of on premises client server computing for their own IP, so they cannot compete with Microsoft in the hybrid cloud computing space.

Regardless of who else offers solutions capable of satisfying enterprise business consumer appetite for this type of computing method, the appetite is nevertheless real and strong. A lot of research is available on the topic from most of the most popular analysts, but for readers otherwise unfamiliar with market demand for this type of computing platform, take a look at this blog post published yesterday, by Richard Fichera, and Analyst at Forrester®.

In this writer’s opinion a lot of the momentum in Microsoft’s cloud earnings report can, and should, be attributed directly the role played by Microsoft’s installed base of hybrid cloud systems. We have first hand, absolutely current experience with SharePoint and how organizations are implementing Office 365, SharePoint Online, in conjunction with SharePoint on premises. These organizations represent, literally, thousands of users. Therefore, the financial impact of this customer base should not be underestimated.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

1
Apr

Can Pivotal do Better than Microsoft Azure at Taking Market Share from Amazon Web Services (AWS)?

As Quentin Hardy wrote in the New York Times Bits column on Monday, April 1, 2012, EMC’s Amazon Challenger Comes Out, EMC is formally introducing “Pivotal”, a new “initiative” in the competitive market for elastic (flexible) computing services and platforms. Pivotal, Mr. Hardy notes, will be an entirely separate company and fully operational by a target date of April 29, 2013.

But is “Pivotal” a company, or an “initiative”? Check the following blog post, authored by James Watters who is affiliated with a business called “Cloud Foundry” which is purported to be an “instance” of the “Pivotal initiative” Cloud Foundry is Open and Pivotal. Are you as confused as we are?

The CEO of Pivotal, Paul Moritz, gave up the same position at VMware to run this effort. We don’t think that this is VMware’s first effort to find a competitive niche on Amazon Web Services (AWS) territory. As we Googled “Pivotal”, we came on another “instance” along the same lines as Cloud Foundry — Opus Interactive.

Does Pivotal stand much of a chance to do better? For that matter, does Pivotal have a chance to do better at competing with AWS than Microsoft has managed to do with Azure? From Mr. Hardy’s article, we are not optimistic. Mr Hardy describes the business case for Pivotal as not much more than a defensive reaction to a substantial erosion in market share suffered by EMC and VMware — Pivotal’s parent corps.

The Marketing communications summary of key features for Pivotal, summed up in a quote attributed to Mr. Moritz, neither communicates anything particularly new about Pivotal vs. AWS or Azure, nor anything specific: “to enable customers to build a new class of applications, leveraging big and fast data, and do all of this with the power of cloud independence.” (quoted from Quentin Hardy’s article, a link to which has been provided above). Without anything truly new to say, we can’t see how this attempt will do much better than previous attempts along the same lines.

We have first hand experience with both AWS and Azure. We found the technical jargon with AWS to be too thick for our comprehension. We tried shutting off the service 3 times before we could fully succeed. With regard to Azure, without a Virtual Machine for SharePoint Server 2013, we couldn’t get much immediate benefit out of the 90 day trial offer. We decided not to use it.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved