I am OnDemand Predictions2013 has been incredibly eventful for the cloud industry, mostly for making itself an eminent presence in the mainstream IT market. Businesses of all sizes have made their ways to the cloud, confirming my 2013 predictions. Government agencies worldwide take the cloud seriously, as demonstrated by the CIA’s contract switch over to Amazon from IBM. AWS has proven its rapid pace of innovation and has introduced great leaders who have completely replaced the concept of sluggish IT servers with instances. While the market is still small, I believe it will take over the IT market sooner than some of us think. I am not alone in my forecast… another analyst predicted that AWS will become a $50B business in 2015, which means it will multiply 12 times its size from last year. So, have a look at my 2013 predictions and read on to see what 2014 has in store for the world of cloud computing. (read more…)

In this post series, I will raise some basic questions and will delve deeply into this topic to debate the common resistance to what I call “pure cloud deployment”.

Let’s begin with a leading question: Can’t the hybrid economy model live within the public cloud? From the enormous number of conversations with top cloud thought leaders, CIOs, startups, and the like, it seems that the answer is YES. 

The Pure Public Cloud

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Ravello Systems LogoThe cloud market is young, despite AWS’ growth and current worth of a few billion dollars. Most of the enterprise’s IT resources are still hosted on the organizational premise of using VMware hypervisor. The enterprise hybrid cloud challenge is hidden in the cloud utility model’s basic notion of hardware as software, whereas legacy application performance and usages are still based on physical resources capabilities. This difference is the greatest factor when it comes to discussing the evolution pace of the `enterprise grade cloud`. The CIO today is required to show cloud adoption and IT operations’ efficiency. This is consequentially triggering new startups to evolve in efforts to facilitate IT resources to close this existing gap. What follows is a story of such a startup that, in my opinion, has a real chance at becoming a leader in this intermediary cloud adoption phase and the hybrid cloud ultimate enabler, Ravello Systems.

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Last week I was invited to the HP Tech Day in HP’s campus in Houston to learn and hear more about the giant’s cloud offering. I appreciate HP and Ivy very much for the invitation and for a great event where I was able to learn more and see these clouds in real. I had the privilege to meet savvy and professional guys. It is always great to see people who are enthusiastic on their jobs and are proud of their company. Let me share with you HP’s cloud from my point of view.

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It always good to start with Wikipedia’s definition as it helps to initiate a structured discussion, here is Wiki’s definition for Lock-In:

“In economics, vendor lock-in, also known as proprietary lock-in or customer lock-in, makes a customer dependent on a vendor for products and services, unable to use another vendor without substantial switching costs. Lock-in costs which create barriers to market entry may result in antitrust action against a monopoly.” Read more on Wikipedia

Does the cloud present a major lock-in ? Does the move create substantial switching costs?

“Yes !” is the common answer I hear for those questions. In this article I will debate it basing my findings on real cloud adoption cases.

Generally in terms of cloud’s lock-in, we face the same issues as in the traditional world where the move includes re-implementation of the IT service. It involves issues such as data portability, users guidance and training, integration, etc.

“I think we’ve officially lost the war on defining the core attributes of cloud computing so that businesses and IT can make proper use of it. It’s now in the hands of marketing organizations and PR firms who, I’m sure, will take the concept on a rather wild ride over the next few years.”

The above statement I bring from David Linthicum’s article “It’s official: ‘Cloud computing’ is now meaningless”. Due to my full consent with Linthicum on that matter, I will be accurate and try to make a clear assessment of the cloud lock-in issue by relating each of the three cloud layers (i.e. IPS aaS) separately.

In this part, I will relate to the most lower layer, the IaaS lock-in.

It is a fact that IT organizations take advantage of the IaaS platforms by moving part or even all of their physical resources to the public clouds. Furthermore, ISVs move at least their test and development environments and making serious plans to move (or already moved) part of their production environment to the public clouds.

Read more about shifting legacy systems to the cloud by Ben Kepes

Discussing with a public IaaS consumers, it always come to the point where I ask “do you feel locked on your cloud vendor ?” most, if not all of the companies’ leaders claim that the public clouds’ values (on-demand, elastic, agility,ect) overcomes the lock-in impact so they are willing to compromise. As a cloud enthusiastic it is great for me to see the industry leaders’ positive approach towards moving their businesses to the cloud (again too general – any of them refer to a different layer). I do not think that the lock-in is so serious.

For sometime this claim sounded pretty reasonable to me though on second thought I find that the discussion should start from a comparison with the traditional data center “locks”. Based on this comparison I can already state that one of the major public cloud advantages is the weak lock-in, simply because you don’t buy hardware. Furthermore, companies that still use the public cloud as an hosting extension to their internal data center, don’t acquire new (long term or temporary) assets that they can’t get rid of without having a major loss. In regards to its lock-in the public cloud is great !

Another important explanation related specifically to Amazon AWS products which support SaaS scalability and operations. Smart SaaS architect will plan the cloud integration layer, so that the application logic and workflow will be strongly tied with the underlying IaaS capabilities such as on-demand resources auto provisioning.

Read more about the relationship between web developers and the cloud

For example, the web can use the cloud integration layer to get on-demand EC2 resources for a specific point when a complex calculation occurs. In a superficial glance, the fact that the cloud API used as a part of the application run-time script holds an enormous lock-in risks. I disagree and let me explain why.

As a market leader, Amazon AWS will be (already is) followed by other IaaS vendors. Those will solve the same scalability and operational issues by the same sense and logic of AWS. Basically this means an evolution of IaaS platform standards. Smart cloud integration layer will enable “plug & play” a different IaaS platform or even orchestrate several in parallel. To strengthen my point I bring as an example several cloud start-ups (solving IaaS issues such as governance, usage and security) that developed their product to solve issues for Amazon AWS consumers and seriously target support of other IaaS vendors’ platforms such as Rackspace cloud and vCloud. In regards to lock-in the public cloud is great !

The IaaS vendors in the market recognize the common lock-in drawback of moving to the cloud. Vendors such as Rackspace brings the OpenStack which is a cloud software platform, so cloud vendors can build IaaS solutions upon it. Rackspace showing off on their blog site –

OpenStack™ is a massively scalable cloud operating system, powering the world’s leading clouds. Backed by more than 50 participating organizations, OpenStack is quickly becoming the industry standard for public and private clouds. Read More

It should be noted that applications and data switching between clouds is still complex and in some cases not feasible though believing in the public cloud’s future comes with understanding of its weak lock-in and will lead to visionary and long term strategic plans.

What about the private IaaS ?

Following my on going research on what is the best cloud option (i.e public, private or hybrid), I found that outsourcing the IT environment to a private or an hybrid includes a major lock-in. Implementation of a private or an hybrid cloud includes lots of customization, hence lack of standards. Private and Hybrid clouds have their benefits though lock-in is not one of them. The contract with the vendor is for 3 to 5 years at least (a data center’s typical depreciation period) on a non standard environment leads to an extreme, long term lock-in in terms of the “on-demand world”.

In order to decrease lock-in the IaaS consumer must prove the organization need for a private cloud by planning strategically for long term. Besides the ordinary due diligence to prove the vendor strength, the contract must include termination points and creative ideas that can weaken the lock-in. For example renewal of initial contract under re-assessing of the service standards, costs and terms in comparison with the cloud market, including the public one. The private cloud vendor must prove on-going efficiency improvements and costs reductions accordingly.

In his article Keep the ‘Cloud’ User in Charge”, Mark Bohannon, VP at Red Hat, Warns:

by vendors to lock in their customers to particular cloud architecture and non-portable solutions, and heavy reliance on proprietary APIs. Lock-in drives costs higher and undermines the savings that can be achieved through technical efficiency. If not carefully managed, we risk taking steps backwards, even going toward replicating the 1980s, where users were heavily tied technologically and financially into one IT framework and were stuck there.”

Some of the private cloud offering today have similar characteristics as the traditional data center, to me it seems that the former comes with a stronger lock-in impacts. In case of an IT transition companies who decide to go that way should expect a considerable switching costs and long term recovery of their IT operations hence of their business.

The second part will discuss the cloud lock-in characteristics in regards to the SaaS and the PaaS layers.

As the founder of Cloudonomics.com, Joe Weinman is one of the most known cloud computing evangelists in the world. Weinman researches the economics of the cloud. Among other cloud aspects he examines, he also relates to the cloud financial operational costs together with its buisness benefits. Following I Am OnDemand last posts summarizing and discussing several Cloudonomics researches, we asked Mr. Weinman to meet for a brief discussion. Last week I had the honor to interview him for about an hour and hear his clouds’ perceptions and vision.

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The first part of Weinman’s lecture discussing the basic “go to the cloud” and demonstrating cloud environments’ loads of different corporations’ web applications. In this part we will bring 6 scenarios presented by Weinman, each includes a brief analysis and proof of its cost and benefits.

First lets start with several assumptions and definitions:

> > > 5 Basic assumptions Pay-per-use capacity model:

  1. Paid on use – Paid for when used and not paid for when not used.
  2. No depend on time – The cost for such capacity is fixed. It does not depend on the time or use of the request.
  3. Fixed unit cost – The unit cost for on-demand or dedicated capacity does not depend on the quantity of resources requested (you don’t get discount for renting 100 rooms for the same time).
  4. No other costs – There are no additional relevant costs needed for the analysis.
  5. No delay – All demand served without any delay.

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Joe Weinman is well known in the cloud computing community as the founder of Cloudonomics. Presenting complex simulation tools, Weinman characterizes the sometimes counterintuitive business, financial, and user experience benefits of cloud computing including its on-demand, pay-per-use and other buisness aspects. Last month I had the pleasure of participating in Weinman’s webinar. Weinman discussed several interesting points which I would like to share with you.

Weinman started by contradicting what seem to be the fundamental assumptions regarding the Cloud and its benefits. There was nothing radical about what I heard but it made me think and challenge all the things I took for granted –

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“How fast will federal agencies make the transition? InformationWeek Government and InformationWeek Analytics surveyed 137 federal IT pros in February to gauge their plans. Our 2011 Federal Government Cloud Computing Survey shows a big jump in the use of cloud services, with 29% of respondents saying their agencies are using cloud services, up 10 points from last year. Another 29% plan to begin using the cloud within 12 months, which means adoption should surpass the 50% mark in the year ahead. “

I read so much about the cloud trend and it seems to be moving very fast.  You are welcome to read more about U.S. government cloud embracing on Information Week.

Interesting prespective on private clouds bringing to you in 2 parts by the SaaS guru, Mr. Waineright summarize : “In a nutshell, an enterprise that builds a private cloud will spend more, achieve less and increase its risk exposure, while progressing no further along the path towards building a cloud applications infrastructure. It’s a damning indictment of the private cloud model from two top enterprise cloud architects who have practical, hands-on experience that informs what they’re saying. Their message is that private cloud is a diversion and a distraction from the task of embracing cloud computing in the enterprise. It can only make sense as a temporary staging post in the context of a systematically planned transition to public cloud infrastructure.”

I agree with the viewpoint and I think that the private cloud is a tool to support this temporary stage of moving applications and data into the public clouds. Phil is mentioning Adrian Cockcroft’s (The Cloud Architect for Netflix) that talks about the “fear” of the CIO about the “unsecure public cloud”. I personally think this is an excuse and this will slow down a positive evolution, though don’t be suprised if a much faster adoption will hit the current expectations of the analysts (i.e Gartner).

Read more on Zdnet SaaS blog –

Private Cloud Discredited Part 1 ; Private Cloud Discredited Part 2