Cloud Partner Programs
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This week I'm in Bangalore attending several partner meetings. One of these was with an application provider who has a very strong business in the telco industry. Their primary delivery model is on premise, but the private cloud portion of their business is at 15% of revenue this year and expected to grow to 40% over the next three years. In the course of talking about how the business will transition to the cloud, the CTO shared an interesting observation: cloud computing creates a desire for a menu of applications.
To explain further, in a traditional IT environment, a customer establishes a requirement for a certain capability. They form a team to define objectives and requirements, establish a budget, issue an RFP, and select a provider for the application. The key to this process is the budget. With traditional computing, there are only enough resources for a fixed solution, both from the perspective of capital expenditures and the people required for deployment. But when a businesses decides to acquire their application capabilities as a service, they are moving to an operational expense model, which frees them from having to associate new functionality with the cost of operations. This, in turns, gives the business the flexibility to consider complementary functions that can be rolled into the new service.
So, the CTO tells us, when a prospect engages with his company to evaluate a specific application, if the delivery model is private cloud, the customer invariably asks about additional capabilities and applications. This is not only an opportunity for the partner in question, it's an opportunity for the larger ecosystem.
This CTO has succinctly expressed something that we hear in a variety of ways from all of our partners: cloud computing implicitly increases demand for application capabilities. An obvious case in point is the plethora of applications on Facebook. When users don't have to install and maintain the applications themselves, they are more willing to install not just one or two, but numerous complementary functions. Of course, anyone who runs a data center would probably say Facebook makes it too easy, but that aspect can be controlled through policy and technology.
More importantly, the increased appetite for a menu of capabilities isn't met by merely providing a nifty catalog of applications. Application providers will meet their customer's needs by participating in a well-structured ecosystem of partners. Catalogs are merely an interface, the real benefit of complementary applications comes from an understanding of how applications fit together, as well as where and when a given partnership makes the most sense. And that requires a partner who can coordinate these relationships without unnecessary interference. Fostering an ecosystem in this way is exactly what IBM is doing with the Cloud Specialty.
With the partners in our program, we are helping them grow marketshare by connecting them to each other. The process is fairly manual for now, but look for tools coming later this year that will help automate some aspects of the program. But complete automation is not the goal, we are not trying to build an online matchmaking service for partners. We intend to provide the worldwide, cross industry market perspective that helps partners make sense of the opportunities they see.
Every partner that we're meeting with this week is on the cloud journey and has exciting plans for how cloud is expanding their marketshare and growing revenue. And in every case, IBM has a role to play in bringing our ecosystem to bear in building our mutual success. We look forward to growing our business with our partners.
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Two years ago, IBM launched the Cloud Specialty. From the beginning, we declared the Specialty—like all IBM Specialties—to be an elite program for partners interested in a deeper investment with IBM. The press and analyst communities received the program with enthusiasm.
The Specialty is built around five partner models for cloud. These models address all partner types, such as ISVs, SIs, VADs, and VARS, and focus on what partners want to do with IBM and cloud. Rather create separate programs for different types of partners, we created a single program with multiple paths, thus allowing each partner to find the right fit for their business’s cloud strategy.
Like any IBM Specialty, the partners demonstrate skills, revenue, and references related to a particularly technology and in exchange, IBM provides marketing benefits. Because the program is elite, the requirements for partners are meant to be challenging, and the benefits from IBM are meant to be generous.
Two years ago, private cloud was in full swing and public cloud—at least for large enterprise clients—was in the early adopter stage. So not surprisingly, the Cloud Builder path, which targets private cloud builders, was immediately popular. For the most part, Cloud Builders came out of traditional VADs and VARs and were accustomed to the requirements of a specialty. We assumed that paths designed for public cloud partners would soon follow in popularity and adoption.
But public cloud partners, by and large, have a different heritage. These partners are traditional ISVs and SIs, and many of them resisted the rigors of the requirements. Many found the certification tests onerous and irrelevant, and still others struggled to publicly identify clients who saw their cloud implementations as a competitive advantage. And too often, they concluded that our generous benefits were not worth the cost of qualification. As a result, the application provider and technology provider paths never took off the way we expected.
Meanwhile, entry level programs built around the Ready For concept have flourished with these same partners. In a Ready For, the partner documents their solution in production and in return, IBM provides a badge, or mark, and make the solution available in a catalog. The Ready For SmartCloud Services program in particular has had very broad appeal.
Our partners have voted with their keyboards, and IBM is responding. We are in the process of revising our Cloud Specialty to focus on Cloud Builders and MSPs. The MSP Initiative is a great place to start on working with IBM in variety of geos and industries. Partners interested in working with IBM as a SaaS provider should pursue the Ready For SmartCloud Services program.
Most importantly, these program changes do not diminish the viability of the five partner paths. We will continue to use these paths as the basis for our discussions about what we can do together and how we can jointly drive success for our clients.
How have the five paths helped you? Please let us know how our programs and partner models are working for you.
eWeek is reporting today that a "vast majority" of small business owners are unaware of cloud computing. In a survey conducted by Newtek Business Services, 71 percent of the 1800 respondents said they had never heard of cloud computing. Of those had heard of it, only 26 percent could describe what it was. There were two other questions in the survey, related to offsite backup and data security. Most respondents were not using any form of offsite backup, but they believed that their onsite servers were secure.
The implied conclusion is that someone needs to get busy educating those small business owners. After all, we can't have them left behind as larger businesses move to the cloud.
But if the survey had asked just one more question, we might be able to draw a different conclusion. It would be insightful to know how many of these same business owners are using any of the following:
If the promise of cloud computing is true, small business owners shouldn't have to know what it is. They shouldn't have to be able to describe it. Instead, they would be able to to say things like, "I reduced the fixed costs of running my business and optimized on the variable costs that fluctuate with my customer base."
Small Business Owners are not technologists. But we are. And although we love to articulate the finer nuances of cloud computing, (don't get me started on that silly TV ad where editing family photos is "in the cloud") it should not be our mission to indoctrinate this valuable market segment about what constitutes a cloud and what doesn't. Our mission here is to provide the solutions that make their businesses more efficient, profitable, and successful.
By creating a cognitive computing system that could play Jeopardy, IBM charmed the world with Watson, the system that beat two top champions of the quiz show. Since that famous game in February, 2011, IBM has engaged Watson on more practical pursuits, including solutions for the healthcare and finance industries.
But we’re also using Watson to solve our own problems. In an organization as large as IBM, one of the biggest challenges is knowledge sharing. In IBM, it is generally true that for any technology question, there is at least one person in the company with the correct answer. But finding that person is too often impossible.
Over the years, there have been several solutions to this knowledge sharing problem. The proliferation of wikis and online communities is the most current attempt to provide a repository of knowledge and expertise. While these tools are immensely helpful and go a very long way toward solving the knowledge sharing problem, users still struggle to navigate this vast data source. Successful navigation requires some prior knowledge of who the experts are, and their ontology, or how they logically structure and organize their information.
So we know we have experts, data, and answers to just about every question. But we can’t find a tool to help us sift through that vast store of information.
Watson excels as culling through pedabytes of information and deriving meaning from disparate sources. Watson can associate people with areas of expertise, and can place information in a historical context. Watson, therefore, is the ideal cognitive system for IBM’ers trying to solve problems for clients.
But Watson requires care and feeding to get to that seemingly magical state of expertise. The data store is built by submitting thousands of questions and providing links to the correct answers. It also helps to give Watson a data corpus for a subject area, even something as broad as cloud computing.
Imagine, if you will, that you had the opportunity to submit questions and answers for Watson about cloud computing, What questions would you want Watson to be able to answer? There are obvious questions, like “What is cloud computing?” and there are thousands of questions related to the technical depths below the umbrella phrase of “cloud computing.” But what about less obvious questions? For example, is there agreement on who first coined the term “cloud computing?”
In the next few weeks, I’ll be contributing to the database of cloud computing questions for Watson. If you have questions you think I should include, feel free to post them here.
In December 2012, IBM published the 2012 Tech Trends Report, an annual research study conducted jointly by IBM developerWorks and the IBM Center for Applied Insights. In this study, IBM surveyed more than 1,200 IT professionals and more than 700 students and academics from 13 countries. Not surprisingly, for both the IT and academic communities, four primary technologies are transforming business: social, mobile, analytics, and cloud computing.
This research dovetails with IBM’s CEO study, published in May, 2012. In that study, CEOs reported for the first time that technology was the most important force affecting their organizations, ahead of people skills, market factors, and macroeconomic factors. This is significant, because when technology is top of mind for the worlds top CEOs, it indicates that we are in the midst of a major technology shift.
And cloud computing is fundamental to that technology shift. It provides a viable platform for the compute requirements of social, mobile, and analytics. All of these technology trends require fast response times, vast stores of data, and a highly elastic backbone of networks and servers. Not only can cloud deliver on the technology requirements, but it can also serve an important financial model: funding through operational expenses instead of capital expenses.
It is the combination of a technology shift and a financing shift that puts cloud computing on the forefront of CEOs minds, because it opens up new possibilities to reinvent business. We call those CEOs on the forefront of this technology shift pacesetters, and they are creating new business opportunities, moving into new markets, and driving higher efficiencies in their business. These pacesetters are treating cloud computing as a strategic opportunity, not a threat to the status quo.
Social, mobile, analytics, and cloud are each interesting in their own right, but when treated strategically and as a whole, reinventing business is not just a possibility, but a concrete business plan. IBM is working with companies who are using cloud computing as the flexible platform for new applications that use analytics to comb through social media to more precisely target a customer with the products and services they need. In this way, customers derive immediate value and never feel “spammed.” They are consuming this value through their mobile devices, and increasingly have little patience for more traditional application interfaces.
At the same time, pacesetting CEOs are using cloud computing to drive higher efficiencies within their own businesses. Companies that are dabbling in cloud computing often presume that the only value of cloud is lower cost of IT operations. But the pacesetting organizations have learned that cloud computing allows for more nimble operations, faster time to market, and ultimately a way to expand the business.
Although the Tech Trends study reveals that we are witnessing an exciting shift in technology, it also exposes a looming skills gap at a worldwide level. IBM is ready to help with our expansive cloud computing resources right here on developerWorks. Please use and share our materials, and of course, let us know what else you need to make your business a pacesetting success.
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Today is an exciting day for IBM's Cloud Computing initiative. Hopefully, you're confirmed your registration for one of our 40 partner events that we're hosting worldwide. 20 of those events will take place in one 24-hour period, starting at 9 am on the East Coast of the US. The rest will be rolling out over the next three weeks. Just in case you missed the invitation, it's not too late to register:
Registration URL: http://event.on24.com/clients/ibm/358234
In all of these events, we'll be introducing you to a great new way of describing our cloud computing strategy to your clients: the cloud adoption patterns. It's widely accepted that IBM's breadth of cloud offerings is unmatched in the industry, but it's not always easy to make sense of it all for your clients. With these adoption patterns, you now have a way to quickly hone in on what your clients need most and then identify a project that delivers results for them and revenue for you.
Based on more than 2,000 cloud computing engagement with clients, IBM has determined that when clients approach cloud computing, they typically adopt it in one of four ways:
Cloud Enabled Data Center: Integrated service management, automation, provisioning, and self service capabilities for private and hybrid clouds.
Cloud Platform Services: Integrated stack of middleware optimized for automated deployment and management of heterogeneous workloads that dynamically adjusts.
Business & IT as a Service: Capabilities provided to consumers for using a provider’s applications running on a cloud infrastructure.
Cloud Service Provider: Advanced, reliable, highly secure and scalable platform for creating, managing, and monetizing cloud services.
When a client sees these four adoption patterns, it's a straightforward discussion to determine which pattern most closely matches their business goals. In this way, we avoid a technology-led discussion and instead focus on the client's requirements.
Once we establish the most logical adoption pattern, the next step is to identify a project to get started. Under each of the adoption patterns, we have created 3-7 projects that a client can undertake for cloud computing. The projects are discrete and tangible, and designed to deliver near-term results for the client. It is only after we identify a project that we start talking about offerings and products from IBM. In this way, we can leverage the breadth and depth of our offerings without overwhelming a client.
As part of our cloud launch today, we've opened our Cloud Computing Virtual Briefing Center. Please visit the center for video presentations on the client adoption patterns, webcasts on the projects, and a host of papers, brochures, and podcasts that explain all aspects of the products and services that we're launching today.
I look forward to working with all of you in delivering cloud solutions to our clients.
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In June, I attended three cloud events in 10 days: Cloud Expo East in New York City, Cloud Ecosystem in Frankfurt, Germany, and IBM’s ISV Executive Summit in Stuttgart, Germany. Prior to these events, I prepared to be inundated with questions about IBM’s intent to acquire Softlayer. But the more recent current events related to the Prism Scandal turned almost every conversation into a discussion about data privacy, security, and cloud computing.
The Europeans interpreted the events very differently from the Americans. In the US, the conversation focused on who was responsible and the whereabouts of Edward Snowden. In Europe, the conversation was about the outrage of learning that data—really any data, anywhere, anytime—is accessible by people with the right credentials. At least in my meetings and conversations, Americans were less focused on individual freedoms than the Europeans.
In Europe, there is strong consensus that the best way to control access is to maintain the data in country. Germany, with some of the strictest laws around data privacy, is viewed as a good location for any data center that supports the European Union. But sometimes, even when the data sits on a disk in a data center in a given country, the owner of that data center might employ administrators from other countries, like maybe India, to maintain that system on a regular basis. So while it’s important to know where the data sits, it’s equally important to know where the administrator sits.
More importantly, there are basic data security policies that apply regardless of where the data resides. Is the data encrypted? If so, at what level and who holds the encryption keys? These are the same questions organizations should be asking, whether the data is on the CEO’s laptop, in a secured data center, or somewhere in the cloud. Good data security policy transcends any technology infrastructure, even cloud computing.
There are articles telling us why the Prism program portends the end of cloud computing, and there are articles telling us the very same program will lead to growth in cloud computing. And there are articles telling us that we shouldn’t worry about government spying anyway when we so freely give our personal information away to social media sites and online marketers.
Whether we’re talking about government sponsored surveillance programs, online marketing, or illegal hacking, the warning is the same: as individuals we need to be vigilant about who is maintaining our online data and how. And as technology vendors, we need to ensure that our policies and practices are well designed, transparent and audited.
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It’s been two weeks since IBM announced its new program for Managed Service Providers (MSPs). We’ve been working with these types of businesses for years, but with the launch of this program, IBM is acknowledging how MSPs are at the forefront of using cloud computing to reinvent business.
Throughout the industry, the term “MSP” is broad and vague. Its roots trace back to the Application Service Providers of the late nineties. Back then, we had some notion that increased bandwidth could enable small businesses to get out of running their own data centers and simply pay an offsite service to manage their applications. Over time, this notion blossomed into a business model where service providers add value through their expertise in application usage, systems management, and business process.
MSPs, then, do much more than keep the data center running: they provide expertise that businesses of all sizes—not just small businesses—simply cannot maintain on their own.
For example, Doug Mow, Senior Vice President of Sales and Marketing at Velocity Technology Solutions, explains that what clients value about Velocity’s managed service is their deep expertise on Infor applications. There are several functions that most businesses only perform once or twice a year, such as processing bonuses or adjusting payroll deductions. For on premise environments, teams often have to relearn how to perform these functions every time they do them. But an MSP like Velocity performs these functions regularly on behalf of many clients, thus increasing efficiencies for everyone involved.
MSPs bring expertise and economies of scale to their customers. In turn, IBM brings affordable, robust technology, worldwide marketing reach, and business transformation support to the MSPs. For more information on how we’re working with MSPs to reinvent business, visit our MSP Virtual Briefing Center.
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Ten months ago, we delivered the Cloud Business Model Readiness Assessment for ISVs, a tool that not only helps ISVs determine where they are in their cloud journey, but also shows the most profitable next steps. Co-developed with TechStrategy Labs, this tools focuses on the business model transformation required to fully maximize profits for a cloud solution.
Commonly referred to as the Business Model Self-Assessment, the tool is an online survey available to all IBM Partnerworld Members. Once logged in with a valid Partnerworld userid and password, ISVs answer about 20 multiple choice questions related to the ISV’s SaaS technology, cloud business model, and pricing structures. Once submitted, the results are run through an analytics engine that produces a customized four-page report for the ISV. The report includes an assessment of the ISV’s current SaaS model, as well as recommendations for next steps.
Like any tool, the self-assessment is not a silver bullet that guarantees success in the cloud. The report does not contain a magic formula for generating profits from from nothing. But when used correctly, the report can provide insights that help a business focus on profitable action items.
For example, I recently worked with an ISV in the data warehousing space. Their solution provides insights to retailers and relies on integrating data from multiple sources, both inside and outside a business. It’s easy to recognize why a cloud delivery model is ideal for this type of application, but prioritizing the technology investments required to get there is less obvious.
The ISV completed the self-assessment a few days before our scheduled meeting. We all reviewed the report in advance of the meeting, and we agreed to use the report as a working agenda for our meeting.
The discussion was insightful and productive. Based on their input, the report showed they had not done any virtualization of their solution, but they had completely enabled mutli-tenancy. We honed in on this part of the report, and quickly discovered that they had misunderstood our definition of multi-tenancy. With that question quickly resolved, we were able to turn our attention to their business model.
Although it might seem
that this ISV should first focus on virtualizing their infrastructure, the financial modeling section of the report revealed that they would achieve significant cost savings through a
more systematic approach to their significant data integration issues. IBM’s Websphere
Cast Iron product set is ideal for their requirements, and they are
currently investigating how to best put this offering to work for their
business. Once they have solved the data integration issues, they will then turn their attention to virtualization and multi-tenancy. One of the many golden nuggets in this report was the realization that although virtualization is important, it's lower on this ISV's priority list than data integration.
Importantly, this partner is free to run the self-assessment tool as many times as they desire. As they adopt new cloud technologies, they can play with various cost and pricing scenarios to see how these investments improve their business.
The SaaS Business Model Self-Assessment tool is available to all application providers who have Member level status on Partnerworld. Please feel free to use it, and we’ll be happy to meet with you and talk about the results. And comment here on how the tool is working for you.
Welcome to the Cloud Partner Programs blog!
This is a forum for exploring the cloud-related programs that IBM is building for its partners. Our objective here is to have an ongoing, active dialogue about what IBM is delivering for partners and how we can continually increase our success together.
My name is Amy Anderson and I am the manager of the Emerging Technology team for IBM's ISV & Developer Relations organization. My team and I have been responsible for SaaS programs for the last several years, and as cloud computing takes off, we are expanding our scope to include a broader range of partners and cloud-related technologies. In 2011, we’ll be launching a new Partnerworld program for Cloud. Partnerworld programs are designed for partners to earn points for skills and successful product deliveries, and in exchange receive benefits from IBM.
There are several key objectives for our program. First, it is critically
important that we have one partner program for cloud computing. The last thing we want to do is to announce a disjointed set of offerings that confuse both our partners and clients and get in the way of our mutual success. A single program with multiple paths makes it much easier for partners to figure out where to start and how to fit in.
Second, cloud computing often changes the nature of how we
interact with our partners. For example,
ISVs and Systems Integrators might both deliver an asset as a cloud service, so
running separate programs for ISVs and RSIs would not be the most effective way
to on-board solutions to our cloud. The cloud program will focus on what partners want to do with cloud computing, and delivers benefits that meet those needs.
And finally, creating a single program for cloud computing lets us fully demonstrate IBM’s value proposition to our partners as well as our clients. As our partners have told us, the value of working with IBM on cloud computing is both the breadth and depth that IBM can bring to our clients. Partners in particular perceive that IBM has a much more complete ecosystem for cloud than our competitors, and this is a key reason for doing business with IBM. It is through a comprehensive program that IBM can deliver this ecosystem.
After some detailed analysis, we have established six paths for cloud. Each path is defined by what partners need from IBM for cloud, not by technologies or how we traditionally classify partners. For each of these paths, we’ll have a variety of partners who want to participate; some partners will participate in multiple paths.
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As we enter our second year of PureSystems, it’s a good time to step back and reflect on how the PureSystems family is complementary to our SmartCloud Services offerings, particularly for our partners.
To review briefly: PureSystems represents the family of private cloud offerings from IBM. These industry leading solutions, which include PureFlex, PureData, and PureApplication Systems, combine hardware, software, and services under a single order number. These systems vastly simplify the installation, administration, and management of a private cloud.
SmartCloud Services refer to IBM’s family of public cloud offerings. SmartCloud Enterprise is our entry level cloud featuring easy onboarding and simplified options. SmartCloud Enterprise+ is our enterprise-class managed cloud providing a range of SLAs and levels of managed support ideally suited for mission critical applications in large enterprises.
The good news for ISVs is that these two families come together at the application layer, in the form of application patterns. An application pattern is a description of the application, including its architecture, middleware components, tuning parameters, and security settings. ISVs create the patterns once, and then clients deploy the patterns on either PureApplication System or SmartCloud Application Services (SCAS).
Application patterns drastically reduce time to deployment and the overall management of the application. And patterns give developers options for both public and private cloud deployment. ISVs who leverage application patterns do not have to choose between enabling to public or private cloud.
In 2001, IBM published the concept of Autonomics, which was a general description of computing systems that are self-managing. Autonomics sought to address the issue of growing systems complexity by proposing technologies that were self-configuring, self-healing, self-optimizing, and self-protecting. Although IBM delivered many products that provided aspects of autonomic computing, it was all delivered in the traditional data center. Application patterns deliver the promise of autonomics in the cloud.
IBM is publishing examples of how application patterns are changing the game for both ISVs and our joint clients—and we’re eager to hear more success stories. Please let us know how application patterns are working for you across private and public cloud.
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In a recent CNBC interview, Marc Benioff, CEO of Salesforce.com, said that the future of IT will belong to those firms who are investing in social, mobile, and cloud. Then he went on to point out how well his company has invested in these areas and how poorly his rivals are investing.
In an October 22, 2011 New York Times editorial, columnist Thomas Freidman wrote about a recent visit to Silicon Valley and reported on an IT revolution “driven by the convergence of social media...with the proliferation of cheap wireless connectivity and Web-enabled smartphones and 'the cloud'...” Again: social, mobile, and cloud.
From IBM's perspective, the social-mobile-cloud sound bite is 75% correct. Cloud computing, mobile technologies, and social business are inextricably intertwined, and IBM also believes that those companies investing in these technologies will be tomorrow's IT leaders. But IBM has a more complete view of the future, and it's based on our last 100 years of success.
From the 2011 IBM CIO Study and the CMO Study, as well as several third party studies, analytics is one of the top investment areas for executives who control IT spending. The social-mobile-cloud sound bite completely misses that point. True, the cloud makes the explosive growth of analytics possible, and the explosive use of mobile and social gives everyone more to analyze, but it is an oversight to leave analytics out of a vision for what is hot now and what is driving the future.
In addition, IBM describes the future through what we call the 2015 roadmap, and it has four elements: growth markets, analytics, cloud computing, and Smarter Planet. Taken together, these initiatives encompass social business, mobility enablement, and cloud computing, and put them in the context of a global market. The roadmap is also more complete than the sound bite in that it includes a timeline and revenue targets. It's one thing to say that the future depends on investment in a few technologies, and it's another thing to publicly commit to a deadline for showing actual results from those investments.
The roadmap is not merely a technology statement. IBM's success over the last century is due in no small part to being able to nurture compelling technologies and create markets for them. We look forward to working with our partners turning these exciting new opportunities into success stories for our clients.
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This afternoon I was talking with Sumitro Sarkar from TechStrategy Labs, who provides pricing and cost analysis for cloud implementations. Wall Street media were abuzz today about a "massive sell off" of cloud-computing related stocks, spurred by earnings warnings by two fairly visible cloud-related companies, Equinix and Autonomy. Articles on Barrons, Forbes, and other sites expressed alarm that Equinix adjusted their earnings estimate downward based in part on "greater than expected discounting..." Barrons listed several other data center vendors who posted losses on the day.
Yet IBM closed the day up 0.18. Although Sumitro and I both agreed that there is no measureable correlation right now between the industry's perception of cloud computing and IBM's stock price, there is--at least possibly--some insights to be gleaned from these data points.
The cloud computing market is much bigger than data center vendors. Indeed, UK--based Autonomy, also cited in Barrons as issuing a warning that spurred the sell-off, is a software infrastructure provider. And Autonomy's business is broader than the cloud, so a warnings statement from them is not exactly a bellweather of the state of cloud computing. There are many aspects to cloud computing--from the tools that enable applications on the cloud to virtualization technologies to the applications end users access--so it's a bit dangerous to draw dire conclusions from the stock fluctuations of a few companies in the data center and hosting business.
But there is an even finer point to observe in the Equinix statement. There are discounting pressures on the hosting providers. This is a sign of a market moving out of the nascent stage, and that has a distinct pattern in the computing industry: In order to continue winning business, cloud vendors will need to differentiate themselves and provide demonstrated value. This will be true for vendors across the entire cloud ecosystem. A "me too" approach at any layer of the cloud will not suffice, regardless of the discounts provided.
There is plenty of room at the table for vendors of all sizes and value propositions. There is plenty of opportunity for growth for all the current participants in cloud. But any vendor who wants a long future needs to be absolutely clear who they serve and how they deliver value.
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Last week, IBM announced a new SmartCloud Enterprise Trial. This is an exciting option for customers and partners interested in trying IBM’s IaaS and PaaS offerings before they buy.
Under the trial, which is for new customers only, users create an account, build images, and use the cloud for up to 60 days at no charge. At the end of the second billing cycle, users’ trial accounts automatically convert to fully featured SmartCloud Enterprise accounts. Their images, data, and settings all remain intact.
In years past, IBM would offer limited-time, 90-day trials, usually in the spring and fall. The 90 days were fixed to the calendar, so developers had to be watching for the promotion in order to take advantage of the full 90 days. It was easy to enroll, but feedback was clear: clients and partners wanted an ongoing try-and-buy option. The SmartCloud Enterprise Trial addresses this longstanding requirement.
At the same time, many of our partners have taken advantage of the developerWorks Trial, which has been available since May, 2012. It is a no-charge, 90-day offering for individual developers. The 90 window begins when they create an account. At the end of the 90 days, their assets are purged from the system and there is no option to migrate the images to a permanent account. It truly is a “sandbox” for developers.
Both the SmartCloud Enterprise Trial and the developerWorks Trial provide a subset of the services available on SmartCloud Enterprise. The SmartCloud Enterprise Trial is available immediately in major markets, and will roll out to other countries throughout June and July. The developerWorks Trial is available in all countries where SmartCloud Enterprise is sold.
So why have two trials? The key difference is the preservation of the images and data upon completion of the trial. The SmartCloud Enterprise Trial is designed for anyone who intends to be a long term cloud user but would like to try the service before buying. Thus IBM maintains the images and data created during these trials. When the Trial account converts to a Pay As You Go (PAYG) account, all services and images become available for purchase, but the images created during the Trial persist.
Developers can use the developerWorks Trial for a variety of purposes that often don’t need to persist past 90 days. For example, developers building application patterns for PureApplication System can test their patterns through the SmartCloud Application Services.
In providing two trial options, IBM is addressing the needs to different user types. Please let us know how these options are working for you and your company. We love to share success stories.
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In high tech circles, the term “ecosystem” is used to maddening effect. Leaders toss the term around as though it is the answer to every business problem: Can’t build the solution your clients need? Just tell them you’ll deliver the extra capabilities through your ecosystem. Can’t reach all markets? Just tell your investors that you’ll get there through your ecosystem. Need to expand your sales force? Just add “the channel” to your ecosystem.
But what is an ecosystem, how do you know when you have one, and how do you ensure its ongoing success? The term ecosystem is borrowed from the biological sciences, where it refers to a collection of living and nonliving organisms that are “linked together through nutrient cycles and energy flows.” There are three important features of this definition when we transfer it to the high tech business: assessing living and nonliving organisms, understanding the difference between nutrient cycles and energy flows, and appreciating the whole ecosystem as separate from the sum of its parts.
These features are especially insightful when we apply the ecosystem to the industry disruption created by Cloud Computing. We’ll look at each feature separately, starting with living and nonliving organisms.
A Collection of Living and Nonliving Organisms
First, the ecosystem is a collection of living and nonliving organisms. In biology, the ecosystem includes both plants and rocks, or water and sand, for example. In high tech, the corollary is people and assets. When building ecosystems, it’s often easy to focus on either people or assets in a vacuum, an approach that will rarely succeed.
For example, several years ago, we were building an offering for the small business market. This was a new venture for IBM, since at the time we didn’t have offerings that reached below the midmarket and cloud computing wasn’t commercially viable. We had an appliance for small business, and we needed applications to ride on top of that platform. A very large ERP vendor had an application that they were building for the small business market and they were looking for a viable platform on which to deliver it.
The match seemed ideal. Both companies flew enthusiastic architects between locations to meet and build presentations that displayed the elegance of the combined solution. Marketing teams built plans on how to roll out the new offering. Executives agreed over dinner that the partnership would be fruitful for both sides.
Everyone was focused on the nonliving organisms—the platform and the application. But the project never got out the door because once we started looking at the living organisms—the sales teams—we realized that neither side had a channel that could reach our new target audience. We lacked the people who were most crucial in turning the asset into mutual profit.
At least as frequently, partnerships are formed when two companies realize great synergies between their teams. The companies might share a common mission or have similar organizational cultures. Often they have a competitor in common. Highly optimistic conversations about the boundless possibilities of a strong alliance reverberate up and down the organizational chains of both companies.
But without assets, these partnerships are what one pundit called “Barney Relationships.” Barney, the friendly purple dinosaur from a long running children’s show, sings, “I love you, you love me….” While this is charming for kids, in business it’s all just talk. Partnerships, and ultimately ecosystems, need assets that drive revenue for all the parties involved.
An ecosystem starts with very basic building blocks: people and assets. In Part 2, we’ll look at how variations of those building blocks feed on and interact with each other.