Last 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:
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).
This is the third and last post in regarding the cloud lock-in. In the first and the second parts I covered the vendor lock-in of IaaS and PaaS. The appealing registration and the low cost overwhelm the new SaaS consumers that often makes them forget that eventually the service will become something they just can’t live without. What will happen if one day your SaaS vendor goes out of business ? In this post I will try to cover the threats and the actions the enterprise should take in order to lower the level of the SaaS lock-in risk.
> > > How does the lock-in of a SaaS application differ from a traditional on-premise application?
SaaS use is actually the consumption of servers, operating systems, middle ware, network connections and more. Switching a SaaS vendor is much simpler as these are not located in your site – shifting to another vendor mainly includes migration of the data without the hassle of ripping and replacing the full app stack. This cheerful answer also provides a less costly and less complex switch than the painful effort and the risky investment of moving an on-site software.
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.
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.
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.
“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.
The three layers of cloud computing IaaS, PaaS and SaaS occupy the headlines with significant capabilities undergo continuous improvement to host services in the cloud. This growing market is slowly changing so that offered services will become generic. The current evolving struggle is the deployment and management of SaaS applications in the cloud, Gartner calls this cloud market portion SEAP (Software Enabled Application Platforms). We will dare to say that developers are from Mars and cloud providers from Venus, let us explain in detail why.
SaaS application developer builds the application architecture structure including the database system, the business logic and the user Interface. The software developer (or the SaaS vendor for that matter) invests on building these main three infrastructure cornerstones in order to bring life to the business idea and launch a new on-line service.
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:
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 –
Three months ago I started this LinkedIn discussion and I keep getting comments about it. People might say that it is just a defiant question for marketing purposes. I say that this question raises many thoughts and opinions that helps marking the strategy of an IT organization. I invite you to read the following comments that can bring you to think a bit more about your current On-Demand strategy and approach.
> > > > > Answer #1: Just a Buzzword
It’s a buzzword. This is a 70’s-80’s technologies evolution. Remember mainframes, VM/370, per-time payments when using machine. Just another evolutionary loop, development of already existent technologies. In my opinion Cloud computing is an evolution. Started with the revolution of Grid computing, then Utility computing, SAAS computing and now it finds its preliminary conclusion in Cloud computing. Thus no it is not a revolution, it is a revolutionary step in the evolution of what is now called Cloud computing. This is just a good name for number of technologies that was ready years before than customers are become ready for it and useful software was written. Many companies added “Cloud” to the titles of their solutions. Any site can be marked “Cloud ready” or “SaaS solution” 🙂 It means that it’s only marketing. This all is possible because people don’t know what Cloud is in details; sellers often talk about it as about some magic. You can use Magic instead of Cloud; meaning stays the same – marketing.
> > > > > Answer #2 : Depends! From the technology perspective: Evolution and from the business point: Revolution
“From a technology point of view I am pretty positive about categorizing it as evolution and not even sure if representing a significant step; from a business standpoint however I think there is much more value in the concept. I believe that Cloud Computing introduces a capability to rapidly map dynamic changes in the business models that is kind of revolutionary”
“My observation is that “cloud” is a description of how IT is supposed to work from a business perspective: flexible, available, efficient (lower cost), secure, dynamic, responsive, etc. If you are an IT specialist, the technology is evolutionary, but the thinking may be revolutionary.”
“I tend to think that the cloud computing Revolution will transform the way all businesses interface include enterprises with technology and communications, and marks the next wave of the fundamental changes that the evolution of the internet has already brought about the Tera Play”
> > > > > Answer #3: IaaS just an Evolution. Massive Scaling, supported by PaaS and SaaS, is the Revolution.
“I’ve seen global Trading and risk systems, (30,000 node compute grids, nano second trading platforms), some true cutting edge platforms. And this is really a complete transformation of IT. If you’re thinking just IaaS then it’s just evolutionary. True SaaS and PaaS is a revolution. The fact that Salesforce (and the force.com platform) can deliver millions of users and 97500 customers on a single multi-tenant platform with three major upgrades per year. That’s the power of the cloud. Giving a small 10 user non-profit the same reach and scale as a multibillion dollar organisation. The cloud. No admin or maintenance, pure development and software business process IP. What other technology can scale from 1 to 100,000 users. It can take much less than 10% of the traditional development to build a SaaS app compared to traditional platforms. Cheaper , faster AND better . That’s a revolution. “
“The prior comment reflects a deep misunderstanding about what timeshared (outsourced) mainframe computing was all about. Cloud is just another swing in the pendulum. The business owners in the 60’s were right: why should we buy and maintain our own computers when we can better spend the money by renting the computing resources from somebody who knows how to take care of all that “stuff”? It’s not new. We’re just coming around to the fact that PC computing set the industry back 40 years and we’re now where we would have been if PCs had not taken 25 years to “grow up”.
“As amorphous as this question might be, the analogy to mainframes is highly misplaced and not very useful. Among other defining characteristics, cloud services allow software developers to control infrastructure resources programmatically. This means that applications specifically designed for cloud environments can bypass the historically slow and error prone layer of IT administrators that maintain computing resources through largely manual, error prone processes. Companies that use such functionality to enable auto-scaling, such as Netflix, are doing so without the need to invest capital into stranded computing capacity that may or may be fully subscribed. I’ll leave the ever so important question of evolution vs. revolution to you, but explain to me how the Netflix development team could have replicated their “
“Revolution – Cloud is a disruption of everything internet and application as we know them. The very large infrastructure and service vendors are racing to rework their offers and slow things down to keep their competitive advantage. Revolutions are messy – like a massive earthquake or coup d etat. Evolution is what you study afterwards when learning which creatures adapted and which went extinct.”
> > > > > Revolution by Wikipedia takes place in a short period of time
“According to the Wikipedia definition: A revolution (from the Latin revolutio, “a turnaround”) is a fundamental change in power or organizational structures that takes place in a relatively short period of time. So how this aligned with the “Cloud Computing Revolution” that doesn’t seem to come up in a short period of time?… I remind you that Amazon started its AWS 11 years ago… ” I asked
“Ofir – most revolutions have a long lead up time where the angst ferments underground and bursts out in a moment of time when the underlying ability to organize action is catalyzed by some event – Egypt for example (mobile devices & Facebook). Think of the internet revolution in 1995-1997. The internet was slowly building out (DARPA net, etc) with organization by the scientific/defense communities and catalyzed by Tim Berner Lee public gift of http/html. The corporate world was seeking a way to collaborate beyond the bonds of one company’s offer, like IBM & MSFT. Within two years the Internet exploded into the corporate world, literally revolutionizing the ways companies marketed themselves. The coup was over when Bill Gates announced that Msft was an Internet company and Netscape dropped $25 in a day!”
This month Christian Verstraete, HP’s Chief Technologist also raised this question in the CIO magazine. In his post he writes:
“One of the questions that came on the table was whether cloud computing is a revolution, a paradigm shift, or not. I’d like to answer, it’s both.
I say that the cloud computing is Evolving faster to become a Revolution,
what do you think ? Join the discussion
Traditional ISV conversion to become a pure SaaS vendor should carefully plan its application deployment strategy. Below you can find the steps list how to start suggested by David Linthicum. By learning the PaaS Market and selecting relevant vendors traditional ISV will present a fast go-to-market and eventually a smoother conversion to a SaaS vendor –
Here are some important criteria for ISVs to consider in evaluating PaaS provider:
Do you still have a lack of knowledge with basic market definitions? Check I Am OnDemand Terminology Page
Adopting the cloud must come with a management solution strategy. Cloud Management refers to all cloud environment aspects and their related tasks. Tasks include deploying, monitoring, analyzing and more. Many IT organizations today running to adopt the new disruptive cloud methodologies. Choosing to run a business on a cloud is a strategic decision, picking the right way to orchestrate your cloud resources should be an integral part of your cloud adoption strategy.
I asked Amazon support:
“I am looking for a tool that will let the ISV’s customers an option to enable an environment by themselves with a back office for its administrator to control the different customer accounts. For example for an e-learning environment that also includes rules such as the total hours enabled for a single formation/cluster that support a few hours class a day”.