cloud-connectLast week I attended one of the most popular cloud technology conferences in the world – CloudConnect. The CloudConnect conference started about four years ago. Attending the event gave me a clear understanding of the market maturity and evolution rhythm. Check out the following sections for the main points on what I heard and learned:

Cloud Performance

The underlying infrastructure performance, round trip time, bandwidth, caching and rendering are to be counted as the major features of an online service performance. In an interesting presentation by @joeweinman (known by his famous “Cloudonomics” theory), it was claimed that latency holds the greatest weight among these faetures. I encourage you to check out his new research – As Time Goes By: The Law of Cloud Response Time presents some good formulas, methods and considerations with regards to online services’ performance and latency (including simple facts, for example, that people tend to prefer selecting from fewer options on an online page –  so you can have less content on a page and achieve a better browsing performance).

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On a vacation you often find that the best way to enjoy is to try and disconnect from the regular working day routine. Part of my blogging tasks include searching for knowledge resources and publishing news and articles to my followers. I maintain communication with my readers using social communication means such as Twitter and LinkedIn. Setting that in semi-automated state with twaitter (so I can spend my time with my lovely wife and not with my iPad …) brought me to imagine a living, breathing independent cloud creature that “feeds” itself with information.

Think out of the box and try to imagine the possibility that these lines were written by a smart algorithm utilizing the clouds and their enormous amount of information and logic. Imagine that humans don’t have keyboards but only screens to view what the “intelligent cloud creature” generates using smart BI algorithms running on a complex extremely wide integration. As we speak this integration is sprawling; basic logic routines and cross systems flows developed by humans as well as by machines.

The question “what I would like to eat for lunch ?” can be based on enormous amount of considerations such as who you are, who is connected to you, what you have already eaten today and how it fits with your diet, as well as what your best friend would like to eat because he can join you today while visiting nearby. All of these answers and more are already out there. The enormous growth in the number and the size of apps’ eco-systems, Big Data and the robust physical computing capabilities of the cloud leads to a form of intensive information calculation that can generate accurate intelligent results in an adaptive manner.

Traditional IT systems and logic were confined within their on-premise domain of variables. Collaboration wasn’t really an option and integration was (and still is) always a painful point with respect to huge investments and high risks. API deveopment task was one of the last things on the ISV priorities list. Today things can be different thanks to these clouds. The cloud accelerates the extension of eco-systems and can makes this fantasy a reality. I believe that we are heading straight into a second, even more exciting information technology revolution.

“Ask Siri to do things just by talking the way you talk. Siri understands what you say, knows what you mean, and even talks back. Siri is so easy to use and does so much, you’ll keep finding more and more ways to use it.”

The first time I checked this IPA (Intelligent Personal Assistant) agent was about less than two years ago. I was fascinated by the fact that besides the voice recognition and ease of use, Siri aims to generate its own intelligence using its great eco-system environment to generate suggestions and solve problems in a proactive and self-improvement manner. Eventually, I wasn’t surprised to hear that the most innovative company in the world integrated the solution inside its leading product operating system (I am just waiting for them to stop playing around and release it as part of the iOS, not only for the 4S version).

Another noteworthy example is Boomi. The company that was bought by Dell a year ago is a growing business for out-of-the-box “connectors” (the term they use for their integration widgets) platform. 

“Remember Data Integration is the key to the cloudy future. By having Boomi in its pocket, Dell is well positioned to handle these needs” wrote the cloud evangelist Krishnan Subramanian, in his article Quick Thoughts: Dell Acquires Boomi

I had a great discussion with Rick Nucci, Founder and CTO of Boomi regarding the company’s positioning and its strategy to become the heart of the enterprise business flow. The company’s offering enables the IT Organization to generate a full solution assembled from several systems. The company develops a platform that enables rapid provisioning of “connectors” that enable systems. 

“AtomSphere connects providers and customers of SaaS, cloud and on-premise applications via a pure SaaS integration platform that does not require software or appliances. .. Leading SaaS players and enterprise customers such as, NetSuite, RightNow, Marketo, Taleo, Zuora, Coupa, NASDAQ” Read more on Boomi’s site

Utilizing the cloud the company is able to host and maintain all of its customers’ connectors in its own cloud environment. The company takes responsibility for the connectors’ compatibly and provision them as a SaaS with a SLA. The traditional integration maintenance hassle becomes a small issue. SaaS start-ups are focusing on solving a specific problem and by so doing will not be able to solve a complete business flow. I believe that vendors such as Boomi can be positioned on top of the cloud food chain (I love that term – I encourage you to use it and comment what do you think about it), even before some of the above SaaS providers.

Traditional ISV must take action in regards to its eco-systems, both those it owns and those it participates in. Traditional ISVs have vast experience and owns data and logic that can be utilized by the new and agile SaaS developer. The ISV can leverage this experience in the cloud and take strategic steps to increase its public interface services to extend its eco-system and generate additional revenue stream. 

> > > > > Back to Reality

Without the crowd input, the user collaboration and the contribution of the fast running web developer the cloud content, systems integration and eco-system can not evolve and grow. The next IT revolution combined from the connected world and big data is just outside knocking on our door and it lies on top of a rapid pace of cloud innovations and evolution.

> > > Don’t forget to comment – What are the layers of the “cloud food chain” ? < < <

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.

Starting with a research on optimizing the SaaS customers’ acquisition funnel, I decided to focus on analyzing the conversion from a visitor to a registered free trial user. I examined about 50 SaaS systems starting from the most known ones, such as Salesforce.

Checkout I Am OnDemand YouTube Channel and rate those 26 free trial jumps.

Software professionals such as product, development and operation managers tend not to give the free trial mechanism the right attention, as the free trial is just a “single simple form”. From their perspective it is part of the product’s marketing website and ins’t part of the whole service. This approach brings some of the SaaS vendors to spend almost all of their planning and development investments on the application. No doubt that this is a mistake, the free trial process has a very important role in the SaaS business life. The free trial mechanism should not be left behind, it is an integral part of the product and must be smart, measured precisely and improved continuously.

Trying to categorize the different “free trial mechanisms” was a bit tricky due to the plenty considerations that should be taken in mind: what is the target market? What model does the system support – B2C? B2B? Enterprise? How complicated are the business values that the SaaS offering present (Social software requires less setup info than financial software)? Etc.

Finally I decided to categorize the products I tested, by the visitors’ effort needed to convert, hence the duration till the new visitor converts to a new user. Categorizing by this feature doesn’t means that faster is better, it is just faster. This segmentation might not fit to all the different SaaS offerings:

  1. Small – Registration straight from the www site homepage, with almost no setup actions.
  2. Medium – The free trial process requires switching through several pages in the “www site” (I use this term to talk about the marketing website of the product).
  3. Large – The free trial process includes jumping to the mail box in order to complete the registration stage and login to the application.
  4. Extra Large – The free trial process doesn’t end with login to the application and the visitor will need to wait for someone to return a call.

Visitor efforts on free trial conversion.png

Most of the applications I tested fit into the 2nd and the 3rd categories. I am sure that some of those vendors can improve the process easiness by stepping up to the 1st category or at least move from the 3rd to the 2nd. There are several considerations in belonging to the 4th like the maturity of the product, some of the young vendors will want to have a personal touch with their visitors on the alpha phase to understand their potential market needs. Some vendors will not want to reveal the application on a free trial due to competition. I also heard some saying that for enterprise software solutions free trial is not part of the customer acquisition process, for my opinion this approach holds a lack of vision.

The free trial 3 steps model

Your visitors don’t want to spend time if the service’s value is not clear and they will not mind spending time if the value presented is clear to fit to their needs. Most of the free trials jumps I tested can be entered into “the free trial 3 steps model” including 3 pages, that the visitor goes through at the free trial sign-up procedure.

> > > > > 1. The WWW homepage

Clarizen Free Trial Button

Make sure that the www homepage presents the application’s basic values in a glance and give an option to drill down to read more. Make sure to know your audience’s needs, not only the specifics you can help them with, and provide an appealing and relevant content. Use graphics creative design to catch your visitors’ eyes and social tools to strengthen the communication with them. There are no limits to the creativity that you can present here, think out of the “Salesforce free trial box” and don’t forget to measure your visitors’ habits.

There are some leading SaaS vendors that designed their free trial process to include the pricing page. The main button on the www site homepage is “Pricing and Plans” button, clicking it forwards the visitor to the pricing page that includes also an option for a free trial. When I am interested in buying something I first want to understand that it solves my needs and only then I will ask for its price. I believe that the free trial button is still essential and I suggest giving an access to the free trial and then the option to check the pricing plans.

Following my free trials research here are a few insights regarding the www homepage –

  1. Put links to your social tools and show blogs’ content.
  2. Use videos to present the application and to show you customers’ success stories.
  3. Content should be dynamic and change according to the visitors reactions.
  4. The free trial button must be unique and available on all website pages. Also make sure that it is visible when scrolling.
  5. Although it sounds obvious, please make sure there are no errors on the page, specifically when clicking on the free trial button.

> > > > > >   2. The Registration Form

Once your customer decided to take the free trial, you should make it is perfectly easy and smooth (I would say fast as well) to start the application trial. When planning the registration form, I suggest to start from understanding that an email and a password is enough to be able to convert a visitor to a user. You should examine carefully all other fields that seem to be necessary to start the trial (URL, number of employees) or any other information you like to get from your visitors (Phone#, how did you hear about us?).

  1. From the visitor perspective the details submission is an instantaneous step before jumping into the application hence he will be fully focused on a quick submission of the form. I found some that show minimal content such as a quote of a happy customer, this is nice but why bother the eyes, the registration form will be enough.
  2. Once submitting the form the visitor should immediately be forwarded into the application. Even for security products a good option to solve identity issues will be by activating specific features inside the application by an email confirmation.
  3. Again don’t forget to measure. For new SaaS vendors I will strongly suggest to go with Multivariate Tests to optimize the registration form.

> > > > > >   3. The Application Landing Page

Once the free trial form was submitted and the visitor becomes a user, the user will be forwarded to the application’s landing page that has a very important role in the free trial jump. The first moves in the application must reveal the user to the benefits and present clearly how those align with the business needs. It is important to control the users’ actions and make sure that they demonstrate the system values, so don’t forget to measure! and improve continuously. Here are some points that you should consider when planning the application’s landing page:

  1. Emphasize basic actions to lead the customer to the main system work flows. For B2B systems an option to check a specific role view and workflows can be nice (check SugarCRM free trial as an example).
  2. Put links to training materials and knowledge. Some systems implant support videos in the landing page to help the visitor get started.
  3. Depending on your customers’ support capabilities, you can put an option to contact a person for an immediate live support.
  4. Make sure that the trial account includes default values so the user will see the application at work.
  5. Suggest and do not force Setup of the account.
  6. Link to pricing and show how much time is left for the free trial.

I found the following presentation and would like to share it with you as it is a great resource for understanding how to design your sign-up process.

Designing For Sign Up 

There is a lot more to consider when planning the customers’ acquisition funnel of a SaaS system: How to increase the awareness of the www site? How does the email to the new user look like?  How to present the pricing plans? How to measure? How long should the free trial be, 15 or 30 days? Although I thought that this subject is mature enough, I found that it is not. The free trial jump is still evolving and I feel that there is plenty of room for new creative ideas, just don’t forget to measure !

To continue the free trial discussion you are welcome to join the my LinkedIn discussion.

This year, April study conducted by independent research firm Ponemon Institute and sponsored by CA Technologies, surveyed 103 cloud service providers in the U.S. and 24 in Europe representing a mix of cloud service and deployment models. 70% said they allocate 10% or less of IT resources to security and control-related activity.

Who is most responsible for ensuring the security of the cloud resources ?

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cloud security considerationsFrom an attacker’s perspective, cloud providers aggregate access to many victims’ data into a single point of entry. As the cloud environments become more and more popular, they will increasingly become the focus of attacks. Some organizations think that liability can be outsourced, but no, and I hope that we all understand it cannot. The contract with your cloud vendors basically means nothing, the ISVs or should I say the `SaaS providers`  still holds the responsibility, so rather than focusing on contracts and limiting liability in cloud services deals, you should focus on controls and auditability.

“Dropbox, … deceived users about the security ..The FTC complaint charges Dropbox with telling users that their files were totally encrypted” Wired Magazine

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Continue from my last post about NIST, I found the IEEE targets Cloud Interoperability Standards and for that matter the organization established 2 work groups

P2301 – Guide for Cloud Portability and Interoperability Profiles (CPIP): ”This guide advises cloud computing ecosystem participants (cloud vendors, service providers, and users) of standards-based choices in areas such as application interfaces, portability interfaces, management interfaces, interoperability interfaces, file formats, and operation conventions. This guide groups these choices into multiple logical profiles, which are organized toaddress different cloud personalities.”

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