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Migrating to the cloud: Managed Providers quest for uniformity

One of my favorite jobs was working in corporate development and looking at companies to acquire back at Progress Software. We had a couple hundred million in the bank, low single digit organic growth, margins expanding from 20% by 2 or 3% per year, and had gotten addicted to buying top line revenue to “juice” our top line. 

Corporate development got to go shopping for acquisitions, meeting with tons of small to medium sized companies to find the next one that met our model and fit our strategy. We called the activity around this shopping “kissing frogs” and “turning over rocks.”  When we found a live one, I would:

  1. vet them
  2. buy them,  and
  3. run like hell – far away from the integration team.

Why run?  Because no matter how diligently one does due diligence, there is always a difference between the “story” (business-as-promised) and the “install” (business-as-practiced). Once the board signed off on the company’s proposition, value, and financials, the hard work of learning how to productively “live together” began – and the age-old difference between selling and installing quickly became apparent.

No matter how hard you squinted, few of the companies we talked with were going to turn into a prince and dramatically change the vector of the company. Realistically, everyone knows that most deals fail to meet expectations. (At Progress we batted about 400.)

Here’s how it works with managed providers on the story-sell-install timeline:

The Story: Dear CIO; as your provider, we can run and manage the operational part of your data center more efficiently than you can. Afterall, we have efficiencies of scale, proven superior best practices, and there will be a “clean” line of demarcation between the app that performs the business function and the pesky infrastructure that makes the apps run. We will modernize your aging data center, move “your mess” and run it for “less.” This arrangement will save you money, free your folks to focus on your ‘core competencies’ of providing what the business needs, and we will provide you with better SLAs because we are experts.

The Sell:  What’s not to love about that story? The strategic rationale is clear (focus on the business) and the financial model is one my mother could understand (it’s cheaper). Oh sure, yeah there was a bit of heart burn about taking way loyal-employee-#25’s  badge and making him an employee of our new partner Mr. Service Provider. But, in the end, it makes great business sense. So, the deal flies through all the committees and gets signed off by the board.

The install:  Here’s where it all starts to go downhill. Where selling and installing meet. How do all those legacy applications get transformed into the brave new world? Answer: They don’t. They get “temporarily” moved -- lock, stock, and barrel with their existing infrastructures – along with the promise that they will be modernized later. Much later. .. because that transformation is labor-intensive, time-consuming, and expensive. In order to run as efficiently as possible, the MSP quest is to have all the apps on a uniform operating stack (hardware, OS, patch level, security, monitoring, back-up, etc). One-offs mean diversity and diversity destroys margins. 

Normally, MSPs are faced with a long, linear, labor-intensive effort to move an application that includes 1) capture, 2) extract, 3) operation-alize and then 4) transform. The linear approach takes a long period of time with no assurance that transformation will ever occur.  There are few tools that automate the process and it’s tedious as well as error-prone.

appzero is making that approach obsolete with a product designed specifically for easy, flexible extraction and transformation of applications. Extraction and transformation occur simultaneously with delivery to operations. The MSP does the transformation concurrently with the extraction. 

Consider this analogy: Before ETL tools existed, companies would dump a DB to a spreadsheet. It would be up to a person to manually de-dup, clean, augment, validate, and then reload into the data warehouse. When ETL came along, it sent this approach back to the Stone Age for all but the tiniest of companies. Today, appzero is the ETL equivalent when it comes to moving applications from data center to MSP, or cloud. Swift and efficient.

The appzeo approach of transforming an application during the move guarantees that the applications are running on an operations stack that is homogenous, uniform and consistent. And there you have your competitive advantage. A clean match between “the story” and the “install” means good-bye to one-off margin-destroying diversity and hello to robust, predictable profit margins.

Join me and IBM cloud CTO Mac Devine – as we do a show and tell webinar.

Cloud migration automation; on-board complex enterprise applications

I am always looking for a way to communicate better and cut to the heart of any discussion. So, if you have thoughts on this subject drop me a line at GregO {@} Appzero {dot} com or tweet me @gregoryjoconnor or @appzero_inc.

 

Register to attend: “Cloud migration: automate on-boarding of complex apps”  Moving production applications to the cloud doesn’t have to take heavy lifting. Join IBM Cloud CTO Mac Devine and AppZero CEO Greg O’Connor as they demonstrate the automation of migrating production applications to any cloud.  Find out how to on-board complex enterprise applications unattended. Join us Thurs, Mar 29th @ 1pm EDT register now>>

MoneyCloud – The art of winning an unknown game*

(……*or yet another blog about Moneyball (YABAM)… ) As usual, I had an agenda in mind when my engineering team and I headed across town to watch “Moneyball.” An excellent movie for companies to watch as a group, the topic and goal is ‘winning.’ The key to winning? Get on base. Getting there doesn’t have to be pretty.

We know the big winners of cloud computing today – Amazon, Rackspace, VMware … Microsoft and the usual suspects lining up to plant their flags. That’s the easy part. The hard part is knowing who will be the winners in the next 2-5 years. 

One thing I know about those new winners is that they will be completely obvious … in retrospect. 

The winners will have been disruptive, yes. But they will have been disruptive in a way that is practical. Disruptive in a way that solves a problem moving to cloud creates. Because greatness is not a product of doing something old in a new way, but of doing something great in a new way. Bonus points for doing it in a way that is also straight-forward.

Case in point: Michael Lewis’ wildly successful 2003 book Moneyball: The Art of Winning an Unfair Game chronicles the payroll-disadvantaged Oakland A’s victorious adoption of pioneering metrics under general manager Billy Beane. Forced by the mother of invention to find a way to turn $41 million in salary into a Goliath slayer of teams spending over $125 million in payroll, Billy Beane made himself first a laughing stock, and then a leader.  Today, teams that play Moneyball are the norm – and the methods/metrics are inarguably obvious… looking back.

As CEO of a company with disruptive-side technology that speeds and automates enterprise adoption of Cloud for production applications, I saw many lessons in the movie.  I wanted to make sure everyone in appzero saw them as well:

  • You can’t win by doing something old in a new way. You have to play differently and more effectively than the well-funded, established giants be they the New York Yankees or VMware.
  • Being different is no day at the ball park. Main Street will not get it and will trash your idea … until the wins become obvious.
  • While it is new, “new” gets (mis)understood in terms of traditional.
  • Tenacity– knowing your core beliefs and sticking to them is not optional. You cannot quit and fold if you are 10 games behind in May.
  • Leaders of the company have to constantly communicate the goal and reinforce it with supporting activities. “Get on base” means “get on base.” Don’t steal, ever.
  • Going all in is the only way. The whole team has to be all in as well.
  • Fire anyone on your team who is a non-believer. Period.
  • Trading away talent (Pena) or losing it (Giambi, Damon, Isringhausen) is not fatal.
  • Overnight success doesn’t happen overnight. It is gut level and stressful. Your family will see this pressure on you no matter how hard you try to hide it, so …. 
  • …. make time for the wins that last a lifetime.
  • Free food has a good return on team motivation.

When the credits have rolled, the metaphors and emotions distill to a simple line of reasoning: 1) The goal is to win, 2) Winning means getting more runs than the other guy which starts at the beginning … 3) Get on base.

For startups, the get-on-base equivalent goal is to get customers. Not to be over looked is the requirement to do so in a capital efficient way that scales customer acquisition at little or no cost. Today’s incumbent winners – the ones who triumphed in the last great platform shift– are now competitively disadvantaged in the cloud economy. Saddled with an expensive legacy sales force, pitching million dollar deals, they are up against a cloud business model of self-service, a credit card, and instant gratification. My money is on a stat that combines quick turn-around, low cost, and scalable customer adoption. That stat will correlate very closely to success, failure, and return on equity.

When it comes to creating enterprise value, appzero does something different, and does it differently: We make complex enterprise applications moveable – in part because we encapsulate them for travel without the burden of a VM or OS. It makes so much sense to send an application-centric tool to do the application-centric job of moving applications.  Yet, we are frequently in conversations that are dominated by the incumbent notion that an application must travel on a VM with an OS in tow. The good news is that the largest organizations in our industry are now actively engaged with us in what Michael Lewis calls *the ruthless drive for efficiency that capitalism demands*.

I am always looking for a way to communicate better and cut to the heart of any discussion. So, if you have thoughts on this subject drop me a line at GregO {@} Appzero {dot} com or tweet me @gregoryjoconnor or us @appzero_inc.

 

Register to attend: “Cloud migration automation; on-board complex enterprise applications” Join AppZero CEO Greg O’Connor and CTO Giovanni Boschi as they demonstrate a tool that automates the migration of production applications to any cloud. Find out how to on-board complex enterprise applications unattended. The intended audience for this webinar is anyone interested in, or responsible for moving enterprise applications to or from datacenters and clouds.  It will be of particular interest to Managed Service Providers looking to increase their MRR by giving their customers a solution that easily migrates applications to their cloud. Join us on Thursday, March 29th @ 1pm EST  register now>> 

Naming the app that moves the apps: contest confidential

What do you call a tool for moving complex enterprise applications to the cloud? That’s what we wanted to know. So we ran a contest, kicking it off at Cloud Expo. (AppZero announces contest to name tool that automates the movement of Windows applications to and from any clouds

First, we had to simply and clearly describe the tool which we did as follows: 

  • AppZero's migration tool automatically moves enterprise applications to, from, and amongst clouds without engineering or lock-in. 

Next, we had to put the technology in its market context:

  • “As enterprises embrace the cloud for production applications, application mobility and portability stand as either inhibitors or enablers of [adoption].  AppZero is absolutely in the lead with this automation breakthrough.  Let’s find a name that captures the reality as well as the excitement.”

We’d already seen that people have a hard time understanding that the tool works like this:

  1. This tool is designed to move applications that have been installed and running, perhaps years ago, with or without any documentation.
  2. It automatically moves the application from the source machine to a different target machine. 
  3. The tool moves only the application of interest.  It does not move any of the other applications that may also be on the source machine. (… thus making it a perfect extraction and migration tool for Managed Services/Cloud Providers ….)

And we were off to the races. Within a week we had a hundred or so entries; by contest’s end we had just over 200. Quality? All over the map. But surprisingly, there were many sound and thoughtful ideas. We asked, not only for a name, but for the reasoning behind it. Here’s a sampling, (along with my thoughts). Hint: the winner is in this list. See if you can pick out the name we chose.

The "App"-licants

  • AppMagic -- because if you can pull this off, it’s magic (We agree – join our beta and give it a try)
  • AppMove -- because it best represents what the tool does (as did appMover, and all motion variants)
  • Appeeler -- It peels apps from the host :) (‘appeeling’ as this one is, we chose another)
  • Apptime -- You save time using this tool. It might bring to memory nap time which is what you will have plenty of if you used the tool (agility= moving an app during lunch time, not days)
  • AppSnap -- Move apps in a snap to (and from) the cloud (and it rhymes)

The Cloud Crowd

  • Cloudwalker -- The app will go from cloud to cloud (light sabre optional)
  • Cloud Hop -- You move from cloud to cloud (… or back to the data center)
  • Cloud Care -- Takes care of uploading to the cloud (well, you do have to point and click)
  • CloudMerge -- Simple and powerful… brings all clouds together in a simple way (the apps can run unchanged on any cloud, but we don’t actually change the clouds)

The Lone Wolves

  • App2Cloud -- It's a simple name that fits in with AppZero concept and tells the user what it is & does ( clever -- both app and cloud)
  • Win2cloud -- From Windows to Cloud (Linux beta is coming soon to a cloud near you)
  • zApp -- I think that zApp is a very descriptive name for branding and to stand apart from Microsoft and VMware (zapp – the app is in the cloud … to zapp = make enterprise apps moveable)
  • Frank -- Frank is a solid name, memorable, catchy and I’d love to hear people talking about "using frank" (What does it say about the folks at AppZero that this entry was on everyone’s short list?)
  • SOMO – A soccer mom knows each of her charges; when, where and what they need to bring to perform right (Amen sistah -- I’m married to one)
  • APOWSADA "Ah-POW-Sad-Ah" -- Just made the acronym: Automated Packaging Of Windows Server And Desktop Applications (because the world is just a few acronyms short of perfection….loved the phoenetic guide to pronunciation)
  • WindFlow -- Apps flow easily from the data center to the cloud - just like a summer wind (the concept is right on, but I think we’ll save this one for the AppZero/Kardashianperfume project)

All kidding aside, I have always been a big fan of creative crowd sourcing and this experience was no exception. The contest was a lot of fun and very helpful. It also gave me a window into understanding how the real world views our product. I like the view. And I appreciate the interest. Thanks to each one of you who took the time to help us out.

The winning name and commercial release are just around the bend, so stay tuned. Till then, we are actively listening to any ideas, suggestions, or use cases. We are still looking for Beta testers to vet, refine and try this tool (Beta test drive here). To see this tool in action, you can watch a video of moving a somewhat simple Wordpress application from the Amazon AWS cloud to the IBM SmartCloud Enterprise (SCE).

I am always looking for a way to communicate better and cut to the heart of any discussion. So, if you have thoughts on this subject drop me a line at GregO {@} Appzero {dot} com or tweet me @gregoryjoconnor or us @appzero_inc.  

ISVs caught in the chasm: between heaven and earth -- SaaS and on-premises

Software as a Service (SaaS) is the darling of today’s real world, enterprise-impacting cloud computing use cases.  Industry analysts and research firms are tripping over each other extolling mega-CAGR for SaaS, with the 451 Group going so far as attributing 75% of PaaS spending for use cases that are attached to SaaS deployments. 

In its 2011 research report “Cloud Computing Takes Off,” Morgan Stanley is bullish on the future of PaaS stating, “The low capex requirements, robust cloud enablement and rapidly improving developer toolsets are significantly lowering the barriers to entry for new application development [emphasis mine] – both in terms of cost and time to market. 

Great.  So the future is bright for new application development heading to the cloud. What about ISVs who have existing applications? Driven to the margin-eroding SaaS model, ISVs frequently find that their largest customers are not willing to surrender the on-premises option. 

The SaaS/on-premises tension sets up a complex series of challenges for the ISV including questions of business models, maintenance of multiple product versions, and updating of software to name a few issues. With apologies to last century’s poet Robert Frost, smart money may rest on the ultimate victory of SaaS, but there are miles to go before on-premises sleeps. 

There is – and will continue to be -- a lot of business in existing applications and the on-premises model.

In future blogs I’ll explore ways ISVs can use AppZero to navigate this changing market. But, for now, I’m offering a white paper about the universal need to successfully sell your software.  Titled AppZero Use Case for Software Vendors: Sales Cycle , this paper introduces the ways AppZero can strip the labor required to configure and implement your PoCs and demos – whether on site or in the cloud. Resulting business gains include:

  • Slash configuration and installation time to zero, decreasing the cost of sales, improving PoC quality, maximizing SE resources, and increasing win rate with associated revenue
  • Easily deliver complex systems fully and accurately pre-configured
  • Improve customer experience and perception of quality and competence
  • Focus high-skilled technical service professionals on high-value services rather than on low-margin, repetitive, labor-intensive work that can be automated
  • Reduce time to value for customers and speed time to revenue

The intended audience for this paper is anyone responsible for generating software sales revenue, supporting a software sales cycle, or implementing software for a customer.  Independent software vendor (ISV) sales, professional services, and sales engineers will be particularly interested in how AppZero software can directly impact the sales cycle, while IT professionals will find advantages in the time saved throughout the product lifecycle.

I am always looking for a way to communicate better and cut to the heart of any discussion. So, if you have thoughts on this subject drop me a line at GregO {@} Appzero {dot} com or tweet me at @gregoryjoconnor

Moving enterprise apps to the cloud? Check out this 2-minute video.

In the Cloud: the app is free, but that bucket of nuts will cost you

This week my kids and a bucket of nuts acted out a good allegory for enterprise IT and user cloud provisioning – a cautionary tale. It started with a call from our bank letting us know that our credit card was under suspicion of fraud. Apparently, $134.26 worth of iTunes store activity had been charged to our account in the past 24 hours.  

The bank had correctly guessed that these purchases were news to us, with ‘us’ being the adults in the house. And, if not news to each one of the 5 kids we call ‘ours’, it was also nothing any of them felt like claiming. One family meeting down left us all without a volunteer to claim the shopping spree.

But the truth has a way of finding daylight and the mystery shopper’s identity began to emerge.

Without naming any names here, let’s just say the purchases were made from our (adult) iPad by an application called "Tiny Pets".  Of course, the app is FREE, but apparently a bag of nuts is NOT – a sad fact of life in a world filled with so many hungry tiny pets. So it was that, at $19.99 per bucket of nuts, the free app quickly rang the iTunes debit bell.

Explaining to a 7 year old that the app is “free” but nuts cost money was awkward at best. (Note to parents:  This clever bit of automation is called an ‘in-app purchase’ which, although configurable, is enabled by default.)

Clearly our family had moved to the cloud. But we had done so without giving a thought to any of the ramifications of this move. We had simply moved across the continuum from Cloud what? … to Cloud who? … to what does this mean to me and how do I use it? … to cloud,  uh oh, what now?

Lesson learned: Cloud access from home or the enterprise requires control, visibility and governance.  But I have talked with many organizations where developers regularly bypass IT to jump on AWS, and line-of-business managers grab app instances. They expense the cloud use or back stop their usage with the corporate card. All good?

My story had a happy ending by way of an email from Apple that stated:

I understand that the purchases of Apps were unintentional. In five to seven business days, a credit of $134.26, should be posted to the credit card that appears on the receipt for that purchase. Please note that this is a one-time exception, as the iTunes Store Terms and Conditions state that all sales are final.

Granted, there are not many 7 years olds using the cloud in the enterprise. But I am sure that many companies can tell their own stories about cloud usage that has come off the rails and cost a lot more than planned. Do you think your local cloud provider has an unintended usage refund like Apple?

I am always looking for a way to communicate better and cut to the heart of any discussion. So, if you have thoughts on this subject drop me a line at GregO {@} Appzero {dot} com or tweet me at @gregoryjoconnor

The Elastic Enterprise: IT operations leverages the cloud today

We were all there at the beginning when, “The Internet changed everything,” morphed into the paradigm buster we now call “The Cloud." As an industry, we watched Amazon (AWS) break the $100M revenue mark in 2008; scanned Gartner’s first cloud computing vendor list in 2009; and heard Microsoft declare itself “all in” in 2010. 

 

The cloud-as-infrastructure journey from promise to powerhouse has been at once exciting and disappointing. Exciting for obvious reasons and disappointing because the reality of cloud usage has largely remained the purview of development.  To date, the predominant use of cloud has been for development/test sandboxes and new applications. 

 

From this vantage point, the cloud is an infrastructure play that has grown from development roots – from virtualization technologies to packaged delivery of computing as a service.  This cloud platform is great for developers and select IT cloudies (forward-thinking elite operations and the devops crowd) who actually get to take advantage of the opportunity. It’s also great for the few bold enterprises that have set out to build their own private clouds in order to reproduce the capabilities of leading cloud providers at price points that match those of Amazon, Rackspace, Terramark, et al.

 

Private clouds are still under construction, lacking critical features, and frequently missing targeted price points. A closer look into the enterprise shows the reality that 99% of production applications remain solidly earthbound, not in the cloud. These are the applications that run the business and consume the bulk of IT budgets. These applications do not enjoy the technical and business benefits the cloud promises. Yet ….

 

The vision fueling the promise is the Elastic Enterprise in which production workloads can be moved across computing resources anywhere – datacenters and clouds – at any time, according to the demands of business. The enterprise extends across clouds at will, receding into familiar datacenters when done … elastic. Instead of the traditional hardened infrastructure that is today’s mix of datacenter and outsourced operation, technology responsively serves the enterprise with agility and speed.

 

 Conversations with so many executives map well to publicized research about what’s holding enterprise applications back from the cloud:

1) a way to move existing applications without punitive manual effort

2) security

3) management

4) lock-in

 

Flipping the negatives, here’s what the Elastic Enterprise needs to get enterprise applications taking advantage of all that great cloud potential:

The elastic enterprise runs production applications across a federated/hybrid operational model.
  • There must be a way to move existing enterprise applications and workloads -- quickly, easily, repeatedly, and securely -- to, from, and across all computing resources in the datacenters and clouds. Workloads must be able to move without any changes across a wide variety of physical and virtual environments including DC, IaaS, and Managed Providers.
  • Existing management tools and processes must be leveraged. In this scenario, the elastic enterprise simply appropriates cloud resources, bringing them into the operational fold.
  • The elastic enterprise will not tolerate lock-in in any form. Operational agility means dynamic provisioning of applications and workloads. The only constant is change.

 

This coming week, at Cloud Expo, AppZero and CohesiveFT will be announcing a partnership that enables the Elastic Enterprise. Now, not later. Coming soon to your enterprise …..

 

I am always looking for a way to communicate better and cut to the heart of any discussion. So, if you have thoughts on this subject drop me a line at GregO {@} Appzero {dot} com or tweet me at http://twitter.com/gregoryjoconnor.

 

Occupy Cloud! movement set to occupy Cloud Expo

As Occupy Wall Street went global mixing grievance with entitlement, the movement quickly became the melting pot for all things protest-able. Taking to the streets with euros, dollars, and yens taped across their mouths demonstrators marched, camped, and otherwise deplored the unfairness of reality.

“But, who will speak up for production enterprise applications?” I thought.  “The reality is that 99% of production enterprise applications are still earth-bound … not on the cloud. Those greedy, lightweight dev/test use cases are monopolizing the cloud.” 

The paradigm-busting, world-changing Cloud technology is enslaved to the business as usual purposes of low-risk development and test sand boxes. Meanwhile, the blood and guts applications that are the DNA of enterprise productivity languish in the land of roll-your-own IT operations. 

Bring me a tent and set up a porta-potty.  I am heading to the streets with a message:  The cloud is ready for enterprise applications today.  And the enterprise is ready for my cause: Occupy Cloud!

If movement of enterprise applications to the cloud is hampered by:  1) fear of lock-in, and 2) the degree-of-difficulty factor for migrating existing applications, then Occupy Cloud! has a bright and immediate future:

AppZero solves for this set in a single solution. Our migration technology tool automates the encapsulation of a running application into an OS-free Virtual Application Appliance (VAA), which can immediately be copied and run on any machine – physical or virtual. The result is enterprise applications that are free to move from cloud to cloud, as well as to and from data centers. 

Quicker than you can say, “People before profits,” your production application is ready to run on any cloud, with zero lock-in. Occupy Cloud!  Mission accomplished.  No app left behind.

Learn how your enterprise applications can join the empowered 1% at my talk, The Elastic Enterprise: Application Agility Holds Key to Hybrid Clouds . And visit us at Cloud Expo booth 422. 

I am always looking for a way to communicate better and cut to the heart of any discussion. So, if you have thoughts on this subject drop me a line at GregO {@} Appzero {dot} com or tweet me at http://twitter.com/gregoryjoconnor

Misunderstanding server application virtualization made simple

Perception shapes vision.  I remember as a kid in school, being bored looking at a black and white sketch of some woman sitting at her mirror.  It got more interesting when the teacher told us that it was really a picture of a death’s head.  And instantly I saw a skull.* What you think defines what you’ll see. 

AppZero’s bread and butter is the virtualization of server applications, not servers.  The challenge for the category is that server virtualization (hypervisors/VMs) and desktop application virtualization (think Microsoft App-V) shape most people’s perceptions of what problems we solve and use cases we fit. 

One of the questions I get asked most frequently is, “How is AppZero different than App-V?”  Until somewhat recently the answer was pretty simple, “App-V virtualizes desktop applications; AppZero virtualizes server applications.”  Desktop …… big boy apps. 

We had a hallelujah moment here when Microsoft announced that App-V would be handling server applications.   After all, with Microsoft throwing its hat in our ring, they’ll also be throwing their marketing machine in right along with it.  Good news for us.  Right?

Not so fast.  It turns out that Microsoft Server App-V is not a stand-alone product.  You can’t buy it off the shelf or download it from Microsoft’s volume license site because it is a feature of Microsoft’s System Center Virtual Machine Manager 2012.  So, 1) it’s not a product 2) it’s not available yet  and 3) when it is, it will only be for Windows (2008?) – marked destination Azure.  Contrast:  AppZero virtualizes Windows, Linux, and Solaris server applications today  …. Leaving us in a category of one.

Speaking with so many cloud providers, ISVs, Fortune double digits, and technology giants on pretty much a daily basis, I sense a big shift underway.  The cloud and all of its potential has fueled a general hunger to exploit barrier free utilization of resources – whether in the cloud (federated or hybrid) or in the datacenter – in any combination, according to the needs of the business. 

Enterprise applications – both desktop and server; homegrown or ISV – all need to be provisioned as quickly and easily as an app store.  Provisioned and seamlessly moved as often and to as many different types of destinations as needed to provide IT as a service, applications must be agile to add value in the days to come. 

In a recent blog (Measuring cloud agility in lunches, not days), I concluded, “Lunch is agile.  Days are not.”  An enterprise application travelling on top of a VM is in days territory, not a player in on-demand, barrier free resource utilization.  That same application, packaged as an OS-free AppZero VAA is suited up and ready to play with agility in the Elastic Enterprise.  (More on that one soon)

For now, I’ll make it simple:  server application virtualization is perfectly suited for:

  1. ISVs who want to do instant demos and PoCs, and who want a streamlined, customer-proofed way to distribute their applications
  2. Anyone who wants to move server-based applications to and from the cloud – any cloud.

* Link to: Skull or girl?

I am always looking for a way to communicate better and cut to the heart of any discussion. So, if you have thoughts on this subject drop me a line at GregO {@} Appzero {dot} com or tweet me at http://twitter.com/gregoryjoconnor

Progress meets déjà vu, entrepreneurial style

What do a day at the beach and bringing absolutely unique technology to market have in common?  They are two of my favorite things.  Half educator, half evangelist, I spend my days carving out the difference between virtualizing server applications (AppZero) and virtualizing the servers they run on (Hypervisors VA/VM). 

I’ve been here before.  In 2000, I had the opportunity to gather some of the best and brightest people together as I co-founded Sonic Software with Bill Cullen (product brain and Sonic CTO; now AppZero CTO).  At the time, we saw a market-making opportunity to take the AppServer world standards (formal/XML or market driven/Java) and apply them to the EAI market.  The first ESB to market -- Sonic XQ (Xml Queue) -- was shipped in February 2002.  Sonic itself was bought by Progress Software.

In an entrepreneurial act of déjà vu, I’m at Progress Software’s Revolution conference in Boston.   I am struck by the irony of how very much I could have used the technology I now bring to my fellow software executives, who are struggling to balance revolution and cost. 

If you sell software, you’ll appreciate this observation

Growing Sonic Software, we faced two universal hurdles that significantly impacted our business – and that of pretty much everyone who sells software:

  1. Winning or losing – labor-intensive demos, proof of concepts (POC), evaluations, and trials had a huge impact on our growth rate
  2. Installs that did not go perfectly, resulted in fire drills, lost business,  and a sharp dip in customer confidence

(These facts of software life are some of the acute pain points we solve here at AppZero.)

At Sonic, we were often faced with a 5 day evaluation for a prospect:  1 day to setup our software on their environment, 3 days to do the work they requested, and 1 day show off the results.  When the 1st day did not go as planned, we always lost.  

Always.  Every single time. No exception.

A cautionary tale:  If you sell software, you are guilty until you prove yourself innocent

Oh, and here’s how I learned that an imperfect install can still bite you long after you have successfully fought to win a customer (in this case a market icon).  A full year after having won the business and implemented our product at the New York Mercantile Exchange, I received a call from the CIO.  He had some new concerns, “Sonic messaging system appears to slow down under load”. 

Arrgggh.  How could this be possible?  Sonic was ahead of its time with elastic scaling, continuous availability, and best in class through put.  This could not be correct.  As it turned out, it wasn’t. 

But determining and fixing the “root cause”  took 6 labor-intensive weeks filled with tons of anxious phone calls, numerous pointing fingers (with chewed fingernails), and a couple of flights to NYC by our top troubleshooter .  Life got very unpleasant before it returned to good.

The culprit? A bug in the Java Virtual Machine (JVM) and Java Runtime Environment  (JRE) that would not do garbage collect (free memory) under load.  Now, long before that fateful phone call, we at Sonic knew all about this issue.  We had documented it, changed our install and packaging to make an easy fix. 

(Cue scary music) But then the customer got involved.  

Someone, somewhere along their line had installed their company’s “certified” version of the JVM/JRE thereby putting our product and reputation at risk.

“It wasn’t my fault” just doesn’t matter.  It took a long time, involving many smart people to find the 2 files that needed to be changed so that all the oil futures in the world could once again flow over the Sonic messaging system.

Morale of the story: Once a customer has your software, things happen.

If I had a time machine, I would bring the AppZero product to my(then)self 

AppZero not only solves the PoC puzzle for software vendors, but protects their Windows and Linux server applications from customers.  We make it possible for applications to be pre-installed, pre-configured and then provisioned onto a physical or virtual OS -- in minutes, perhaps over lunch.  

This capability effectively changes the math around POCs in a big way: we reduce the install, setup and configuration time to zero.  If I had been able to use AppZero at Sonic, I would have freed up a whole day to actually do the customer requests on every single PoC.   What would a 33% increase in productive time have meant?  I’m going to guess a higher win rate against the competition, faster company growth, bigger promotions, and more time spent with the wife and kids.  

And if I had had AppZero at Sonic, our very cool software would have been safely isolated from the customer’s operating environment instead of deeply enmeshed in it.  Innocent from the start.  Hey, how’s this for a new tag line? “AppZero -- protect your software from your customers.” 

I am always looking for a way to communicate better and cut to the heart of any discussion. So, if you have thoughts on this subject drop me a line at GregO {@} Appzero {dot} com or tweet me at http://twitter.com/gregoryjoconnor

Cloud market crosses the chasm; wins, sign posts, and deals

Nothing says fun like a hurricane party, a bottle of “Jack,” and a little game theory debate as lights begin to flicker across New England. And speaking of “Jack,” what can possibly explain the handlers at HP letting Leo Apotheker get off the reservation long enough to proclaim the obvious market shift brought on by the iPad?

Note to Leo: Never tell the world your business problems right before you put up the “for sale” sign. Never.

Note to Larry: Please put Leo, the board and shareholders out of their misery.  Can you imagine?

Ahhhhh.  I feel better.  Now … turning to the chasm-crossing cloud market ...  I am fascinated by how the maturing of this market changes the competitive landscape as players reposition where they’ll compete and investors ask, “Where is the smart money?”

So, with a nod to Geoffrey Moore’s iconic taxonomy, here’s my cut at a bare-bones outline of Cloud computing’s rise from evolution to revolution.

2006/07 – Innovators:  Launch initial offering

Key milestone: Packaging server virtualization into a solution called “Cloud”

Amazon announced a limited public beta of EC2 on August 25, 2006, just six months after the launch of Twitter.  This move is a Cloud Computing equivalent of shipping the iPad. New idea has been funded, team built, 1.0 product is “good enough.”  The race has begun and hardly anyone has noticed it yet.

2008 – Innovators: Get proof and “traction”

Key milestone: Amazon (AWS) does $100M in revenue

Zero to $100M in 2 years is proof enough. Early adopters -- technology enthusiasts -- flock to Amazon AWS and would-be competitors hastily plot their entry into this new market. The debate begins:  what is cloud computing and what are posers (a.k.a. “cloudwashing”).  These questions consume the blogosphere and keep early twitter users off the streets.  

2009 – Early adopters Part I:  Cloud breakthrough defined, validated, and gaining a foothold

Key milestone: Gartner issues their 1st cloud computing vendor list

Cloud computing is recognized as a generational epoch on par with Mainframe, Minis, PC and Web.  Amazon AWS does $250M in revenue. Traditional IT vendors stop asking “What is it?” and put on their acquisitional hats to answer, “How do I get into the game?”

2010 – Early adopters Part II: Cloud love fest in full swing

Key milestone:  Acquisitions, open source initiatives, and (drum roll) Microsoft is “all in”

The seriousness of the game is now completely clear to anyone who is paying attention. Game changing events (time will tell) add fuel to the cloud computing buzz:  CA acquires 3 companies in the space; HP and Dell duke it out for 3Para in a sky’s-the-limit arms/price race.  In July 2010, Rackspace Hosting and NASA jointly launched a new open source cloud initiative known as OpenStack and, in March 2010, Steve Ballmer gives a speech declaring: “Microsoft, for the cloud, we're all in.”  Apple released the first iPad in April 2010, selling 3 million of the devices in 80 days. Amazon AWS does $500M in revenue. The movement is clearly a juggernaut.

2011 – Early majority: The US government pushes hard to the cloud; enough said

Key milestone:  Acquisitions move up the stack

The year starts out with many transactions around owning a cloud (“Look ma, I’m just like Amazon too, no hands …”). Terramark, Savvis, and Navisite all get gobbled up as PC era’s transition to Cloud becomes a done deal. iPad will sell close to 50 million units this year. Amazon AWS is on track to do $1,000M in revenue.

Then there is the matter of both Cloud.com and CloudSwitch going for something like 100 - 150 times trailing twelve month revenue. (If Apple Cloud were to get that kind of valuation it would be worth 15 trillion dollars -- enough to pay off the entire US debt). These 2 deals are outliers that tell us something important about what is now required to win. They signal a new game with a higher ante.

Look at the CloudSwitch Verizon deal, in light of Verizon’s recent $2B purchase of Terremark. Terremark is one of the most advanced Clouds available and Verizon just spent another $140M to protect that initial investment -- and provide a capability that other clouds cannot.

Lessons learned: It is no longer sufficient to have an advanced Cloud. You need something more in order to compete. You need to be able to move applications in and out and around all things Cloud.

2012 and beyond:  We all agree that Cloud is the next generational computing epoch. So what will the market do? It has already moved from the Wild West to early settlement times. Companies are settling down for the long haul, building stonewalls to stake their claims. As the market shifts, leaders will look to add capabilities that broaden and differentiate their solutions (CloudSwitch/Verizon redux). 

I expect the next 12 months to show a lot of Cloud related action in management tools, gateways/connectivity, and Platform as a Service (PaaS). And, unless the Mayan calendar turns out to be right, Cloud is likely to dominate the next decade, throwing some innovative curves along the way.

Note:  Now seems like a good time for the next installment of GregO's cloud valuation exit/acquisition score-card.


Time             Company                                          Valuation*

Q1 2010        3Tera /CA                                          $90M   @ 30  EV/R(ttm)

Q2 2010        3Para/HP                                            $2.4B   @ 12  EV/R(ttm)

Q1 2011        Facebook/Private IPO (GS)               $50 B   @ 25  EV/R(ttm)

Q1 2011        Terremark/Verizon                             $1.9B   @ 5.4 EV/R(ttm)

Q2 2011        Navisite                                               $230M @ 2.1 EV/R(ttm)

Q2 2011        Savvis                                                   $2.9B   @3.0 EV/R(ttm)

Q3 2011        Cloud.com                                           $218M   @100 EV/R(ttm)

Q3 2011        CloudSwitch                                         $140M   @125 EV/R(ttm)

*Valuation – includes debt

EV – Enterprise value or market cap + cash + debit

R(ttm) – Revenue for trailing twelve months

 

I am always looking for a way to communicate better and cut to the heart of any discussion. So, if you have thoughts on this subject drop me a line at GregO {@} Appzero {dot} com or tweet me at http://twitter.com/gregoryjoconnor

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