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


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


IBM introduces a new mainframe computer targeted to some markets better served by clusters of smaller servers

2-Color-Design-Hi-Res-100px-widthIBM debuted its z Systems line of mainframe computers in January, 2015. The product line is targeted to a hot segment of enterprise computing consumers, organizations with a burning need to manage mobile devices, users availing of cloud computing offers and, above all, secure online data processing.

Readers can learn more about this product line on its website, IBM z Systems. A quick glance at the marketing communications content reveals some popular and absolutely current computing themes:

  • mobile computing
  • enterprise social computing
  • real-time analytics and “in-transaction” analytics
  • secure, cloud computing

Video product presentations are available on the product website, along with a traditional datasheet in PDF format. A quick glance at the datasheet exposes a cluster approach to delivering the computing power of a typical high performance computing (HPC) system. No problem so far, but how does the introduction of a hardware computing platform with these capabilities align alongside IBM’s announced effort to become a major player in the public and private cloud market for IaaS, PaaS and SaaS? Does it make sense for developers building solutions for Hadoop, Map Reduce, and other cluster architectures optimized for lots of comparatively much smaller CPUs to focus on porting these applications over to IBM’s platform?

Notable on the datasheet is IBM’s suggestion about development platforms. The recommendation is for Java. But a lot of the most promising sector of app development, in, admittedly, very early 2015, is built on scripting languages, with JavaScript getting the most attention. There is also some substantial mention of traditional mainframe computing languages (COBOL) on the datasheet.

So one needs to question just how this product line adds value to IBM’s effort to catch up with its peers in the cloud computing business with systems like these. Certainly a review of the website for these new products is recommended given the themes articulated by the press releases about the z System computers. The most prominent of these are all allusions to mainframe computing, which, in 2014, seems to be something of anathema. Big iron is, unfortunately, no longer the recommended way for most enterprise businesses to proceed, at least not for the ones already committed to Azure, AWS and Google Compute Engine.

Ira Michael Blonder

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


Microsoft publishes an enormous amount of content from TechEd Europe 2014

In yet another gesture towards app developers and their stakeholders, Microsoft is rapidly publishing a very large amount of video content from its recently concluded TechEd Europe 2014 event. All of the content can be found on the Tech Ed Europe 2014 web site. As of the date of this post, Saturday, November 1, 2014, just a few of the webcasts available for public viewing included:

  1. Keynote Presentation by Joseph Belfiore, and Jason Zander
  2. Empowering Enterprise Mobility, led by Andrew Conway who plays a senior product marketing role for Microsoft’s Windows Server / System Center Business
  3. Microsoft Azure for Enterprises: What and Why, led by David Chappell a Principal at Chappell & Associates
  4. Azure Pack Roadmap and Ecosystem, led by Maurizio Portolani, and Robert Reynolds
  5. Microsoft IoT Platform: Architecture Overview, led by Uli Homann

Each of the above 5 webcasts are worth some commentary over the next few posts to this blog. The second, “Empowering Enterprise Mobility” is of interest for information it may add as to how Microsoft has designed its entry into the market for Enterprise Mobility Management (EMM) aka Mobile Device Management (MDM) solutions. In this writer’s opinion enterprise business consumers are demonstrating a voracious appetite for EMM and/or MDM. The intensity of need makes sense; after all, with a majority of larger organizations supporting formal BYOD, BYOA and other policy structures to support personnel as they bring new devices, and systems into the internal computing realm. EMM and MDM, on paper, can provide central IT support organizations with the methods they need to permit this use while preserving control and making a best effort to safeguard company confidential information.

A lot has already been written about the fourth and the fifth webcasts. Azure Pack looks like the right set of components to transform Microsoft’s cloud, IaaS into something portable, the kind of solution Dell has brought to market in its recently announced “Cloud in a box” hardware device.

IoT is a subject of interest to this blog, so a presentation on Microsoft’s data communications architecture to support the billions of devices interacting under the IoT umbrella is a “must attend” event.

Readers should stay tuned.

Ira Michael Blonder

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


Microsoft Provides Incentives for iOS and Android App Developers to Implement Xamarin with Visual Studio as their Platform

iOS and Android App Developers comfortable building solutions with C# should consider adopting Xamarin with Visual Studio as their coding platform. Microsoft is offering some financial incentives for these early stage ISVs to adopt Xamarin. Additional information about these incentives can be found on a page of the Xamarin site, titled “MSDN”, which publicizes the Microsoft offers.

Xamarin is one of a number of cross platform development offers. The biggest difference between Xamarin and its competitors, in this writer’s opinion, is the role C# plays for the Xamarin solution. C# sits at the center of the Microsoft application development paradigm. But from the promotional content on Xamarin’s site, one would also think C# is the best method App Developers can implement to maximize the value of App architecture by reducing the time required to implement the same App functionality for iOS, Android, and Windows.

The Mono Open Source implementation of Microsoft’s .NET framework is also sponsored by Xamarain, so the role Xamarin can play for Microsoft, should they magnetize critical mass across the App developer community, should be very clear. Without developers it is not likely Microsoft will successfully capture more of the mobile App market than it currently has (generally acknowledged as somewhere under 5% of the global market).

Xamarin appears to be winning over some important adopters. A quick glance at the corporate icons on the bottom of the first page of the Xamarin site attests to adoption from some very large enterprises, including Dow Jones, Kimberly Clark, McKesson, Bosch Siemens, and NBC Universal. Quick adoption on the part of enterprise business and comparably sized organizations in the public sector would make sense given the dominance of the “Microsoft stack” across these organizations.

Of course, magnetizing significant numbers of App developers from IT, and their partners servicing Line of Business (LoB) units within the same enterprises with Xamarin may ultimately prove to be good news for Microsoft’s latest product with a claim to a fast launch — the Enterprise Mobility Suite.

At a minimum, anyone harboring deep skepticism about Microsoft’s chances of establishing a legitimate position in the mobile App market may want to re-think his/her position.

Ira Michael Blonder

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


Microsoft Differentiates Its Azure Offers via Acquisitions

In the aftermath of the public release of Amazon’s most recent quarterly earnings report, analysts have focused on price and margin reductions for its Amazon Web Services (AWS) product line. Microsoft’s Azure is a competitor of Amazon AWS, but, per Microsoft’s most recent quarterly earnings report, Microsoft is adding services to its Azure offers via acquisitions, presumably to better differentiate its cloud, IaaS offers for consumers.

Satya Nadella, CEO, provided word of these acquisitions during the “Quarterly Highlights” section of the earnings report, and within the specific context of a mention of “high value services” for Azure, and an increasing consumer appetite for them: “To support these high value services in Azure I have prioritized acquisitions such as

  • Greenbutton for big compute
  • Capptain for mobile backend services
  • and, Just in the past few weeks, InMage for disaster recovery for hybrid clouds

Earlier this month we published our opinion on the InMage acquisition. We maintain an Office 365 E3 plan subscription and have experienced, first hand, the need for a robust backup system for our data stored in the cloud, one which can be managed by SMBs without recourse to potentially expensive third party service So we think InMage is a positive addition to Microsoft, and, to both of its cloud offers — Azure and Office 365. We do need to note Amazon AWS claims to be compatible with “many popular disaster recovery architectures” (quoted from AWS Disaster Recovery Cloud Services.

From the short message on the front page of its web site, Greenbutton appears to have been designed to work with Azure since the business commenced activities in 2006. So this acquisition is more about folding what was third party business back into Azure than it is about breaking new ground. From the promotional information still available on the Greenbutton web site, it would appear consumers with applications requiring a very rapid transformation into a cloud-ready condition would want their developers to implement the Greenbutton SDK to hasten the process. The promotional information speaks of flexible capacity planning for IaaS resources as another plus for the SDK.

Finally, Capptain looks like at least part of a solution Microsoft needs to offer to its App Developers as it grapples with how to magnetize more interest from them, and add to their ranks at the same time.

Ira Michael Blonder

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


Microsoft’s Enterprise Mobility Suite Quickly Magnetizes Interest from Enterprise IT

Microsoft® debuted its Enterprise Mobility Suite (EMS) in May of this year. During the Microsoft Q4 2014 Earnings Conference Call, Satya Nadella, CEO, referred to this product as a “high value service [running] on top of our base cloud infrastructure”.

Readers may want to take some time to read the white paper offered on the EMS website. Given Microsoft’s longstanding position as the preferred desktop computing vendor for enterprise IT, it is likely EMS, which provides a combination of what Nadella summed up as “identity management, device management and data security into one IT controlled plane and architecture.” will magnetize some significant interest from its targeted market. EMS is a SaaS offering.

According to Nadella and Microsoft CFO Amy Hood, this is the case. Both referred to rapid adoption of EMS. Microsoft stands to benefit in several ways should EMS ascend to a leader position for the market: Certainly, businesses standardizing on EMS will constitute strong prospects for Microsoft’s own mobile devices — Windows Phone and Surface computers. But, further, since EMS is built on three other strategic products from Microsoft’s cloud SaaS portfolio — Azure Active Directory Premium, Windows Intune, and Microsoft Azure Rights Management — sales of EMS will, necessarily, also include sales of each of these components of the overall solution, which will horizontally distribute the importance of this solution, potentially opening consumption by SMBs.

The burning need driving market appetite for a solution like EMS is not new. BYOD and what is referred to as the “consumerization of IT”, as a technology trend, has been going on for sometime, perhaps dating back to the debut of the first Apple iPhones. But a solution like EMS has not been available. Perhaps, one can argue, Blackberry’s Device Management (BDM) solution can be looked at as a possible competitor, but BDM neither includes a native version of the Active Directory component, nor anything like Microsoft Azure Rights Management. No, EMS looks to be very well positioned to be a revenue driver for Microsoft, going forward.

Ira Michael Blonder

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


Microsoft Acquires InMage and Adds Another Dimension to Its Hybrid Cloud Storage Offer

Microsoft publicly announced its purchase of InMage on July 11, 2014. With this purchase Microsoft adds another solution to its growing list of answers for enterprise businesses migrating to a hybrid computing architecture built with on premises and cloud IaaS, SaaS components. The other product in this lineup is the StorSimple Hybrid cloud storage offer, which partners hardware from Seagate with custom software to provide a backup method for data reposed on Azure.

Why the need for these solutions? As this writer discovered recently, business subscribers to Microsoft’s Office 365, with data residing in business silos (with, in turn, their own databases) may have a very difficult time retracting this information, once it is uploaded to the cloud. If the information resides in Access 2013, for example, once the data is sent to the Office 365 cloud as an Access 2013 App, it will be converted to SQL Server data, regardless of whether or not the customer maintains a license for SQL Server or not. The Access 2013 App simply lands “somewhere in Azure” and cannot be retrieved.

For larger businesses, this kind of experience is untenable (and for understandable reasons). Given the urgency of Microsoft’s objective to emerge as the premier provider of solutions to a “mobile first, cloud first” market, proceeding without a solution directly assuaging market concerns about the data integrity of a hybrid computing architecture with on premise and cloud venues, disaster recovery, and simply periodic backup of the whole thing to on premise servers and storage is an unacceptable option. Evidently Redmond has gotten a lot of the message on just what can be expected of enterprise business on the question of cloud computing migrations.

As Takeshi Numoto states in his blog post announcement of the InMage acquisition, the “business continuity” solution represented by the InMage product running on Azure actually expands the attractiveness of Azure as a premier cloud, IaaS option not only for enterprise customers standardized on Windows, but also for their counterparts running Linux or even VMware. So InMage expands the reach of Azure, while, at the same time, providing a unique feature neither Google Compute, nor Amazon AWS can offer, at least for the near future.

Ira Michael Blonder

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


Are Valuations of Cloud IaaS Offers Too High?

Are valuations of Amazon, Google and even Microsoft too high as the result of overly optimistic revenue growth assumptions for GCE, AWS and Azure? A brief look at why the value of any one of these offers may elude SMBs, reveals why inflated expectations may be at play here.

Reason #1: Marketing Collateral is Opaque for Average Business Users

It’s not likely a CIO from a $100 Million SMB is going to make much of the information Amazon provides on its Amazon EC2 Instances web page. When the sheer opacity of this promotional information is put together with a complete absence of easily accessible human support (I challenge the reader to find a telephone number for questions on any of the pages of the presentation), the inescapable conclusion is the target market for this type of an offer is a very small set of very large organizations in the public, private, and not for profit sectors.

How much of this very small market (composed, admittedly, of consumers with very large internal appetites) will any one of these competitors seize, and for how long? I argue all three services are completely targeted at the very same market.

Reason #2: Monthly Costs Are Too High for SMBs. Better Offers Are Available Elsewhere

For an average $100 Million SMB looking to use one of these three offers to provide a flexible, virtualized server platform for a big Microsoft® application like SharePoint® 2013, on premise, the monthly costs are simply too high. Amazon AWS, per a look at their publicly posted pricing schedule for IaaS compute instances on April 10, 2014, charges just about $1.28 per hour for the horsepower required to drive server, Search services, SQL services, etc. For 7×24 up time, we’re looking at $928.00 per month operating costs (this estimate is based on AWS’ “Windows with SQL Standard” offer and an m3.xlarge instance, which includes 4 CPUs and 13GBs of RAM).

It won’t take many months of this type of cost for the expense of opting for this support method to exceed the cost of purchasing an HP Blade Server with comparable specifications for physical support of the application on premise. Better yet, this same SMB can purchase vSphere from VMware and run its own internal private cloud IaaS off of the HP Blade Hardware.


Leading competitors for cloud IaaS offers are still focused on the very top of the market, without really viable offers for the vast market opportunity below. Unless/until these offers emerge, on premise alternatives still look like the preferred approach for SMBs.

Disclaimer: I’m long Microsoft, have no position in Amazon, Google or VMware.

Ira Michael Blonder

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


Is Google’s Compute Engine (GCE) a Direct Competitor to AWS or Microsoft Azure?

Google publicly introduced its Google Compute Engine (GCE) as an actual product back in December 2013. A lot has been written about GCE since its debut, with specific reference to this product as a direct competitor to Amazon AWS. But the lack of support for any Windows O/Ss, databases, etc (at least as far as I could find) says they are in a market of their own.

Virtual machine offers for operating systems are limited to two Linux distributions: Debian, and CentOS. Where Amazon offers RDS for managing Oracle, and even SQL Server in the cloud, GCE does not offer a competitive solution. Neither has GCE magnetized a level of support from the developer community to successfully compete with AWS. Quite a number of third party Apps are available for AWS, including quite a few useful for managing SAP database products.

So what should anyone following the cloud market for IaaS and SaaS solutions make of the dramatic price reductions Google recently announced for GCE. I think it’s a mistake to plan on a lot of pressure on AWS from these price reductions. I think it makes more sense to read the price discounting as emblematic of difficulties Google has experienced spreading the word on GCE and capturing a sufficient share of the market for these services. Perhaps it’s safe to say Google GCE has simply been successful magnetizing interest from the Open Source community, all the way from early stage ISVs to larger organizations like the Institute for Systems Biology portrayed in a case study on the GCE web site.

In contrast, AWS has been adopted by organizations, here in the US, of considerable size, not the least of which is the Federal CIA. A lot of this success is likely attributable to the availability, through AWS, of support for databases, and related applications, written for Windows computing environments.

It’s likely Google will expand the list of GCE available VMs to include support for the Microsoft Windows computing paradigm sometime soon. But in the meantime, Azure looks a lot more like a direct competitor to AWS than does Google GCE

Ira Michael Blonder

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