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Christmas Special: Urban legends, from the kidney heist to the data hand over at gunpoint

Have you ever heard the story of a tourist waking up in a bath hub full of ice missing a kidney? It is a story well told and distributed virally in the western hemisphere. It is not true but everybody who hears it for the first time feels the chill?

While it has been proven to be wrong (have a look here as an example: http://urbanlegends.about.com/od/horrors/a/kidney_thieves.htm) is keeps going. There are three elements that make it so difficult to stop it from resurfacing every now and then.

  • The story has a true core or at least is plausible.
  • It is addresses a bad feeling, a fear or a concern already existing in the listener, sometimes consciously sometimes not.
  • It usually has an element of bad and good or of guilty and innocent.

Let me tell you an urban legend from the world of cloud computing and data privacy.

UK hosting company forced to hand over data at gunpoint:

It has been reported that lately the Patriot Act has shown its true face. Hosting UK ltd. (fictional name) a company that hosts web servers and databases for their customer mainly in the UK also has an office in the U.S.A. where administrators cover off hours support issues. As it happened one of these customers (from Europe) came under suspicion by one US governmental agency. It has not been disclosed so far whether this was a terrorist threat or a corruption investigation.

Rather than addressing this customer of the UK hosting company directly the authorities walked up the US office of the hosting company itself one evening and forced entry. Making use of the fact that Europe was sound asleep and no one was available, they approached an administrator and requested to pull data from the servers in the UK. When the administrator refused to do so for two reasons, 1st he had no right to do so under company rules as well as UK law and secondly because he did not have access to the systems, the agents from the US agency reacted straight forward.

Rather than presenting any legal material, which would have had no effect anyhow as the administrator was no lawyer able to understand it, they pulled their guns and forced the US citizen to gain access through all means. They threatened him that as a US citizen they would be able to detain him and his family for obstructing legal action and forced him into action. He had to ignore rules and laws and pull the data. He was then told to obscure what has happened and threatened even further if he reported on the events of the night.

Have you ever heard this story or a similar one?

I have been told it many times. It often is told to be an absolute fact and used to frighten European customers. It does have an effect on customers and adds to the uncertainty already in the market about the Patriot Act and the fear on data privacy. So let’s check how it fits the three points mentioned in the beginning.

  • The story has a true core or at least is plausible

It has a true core in a sense that there are rules under the Patriot Act that would force hosting companies to hand over data without notifying the end customer. The so called sealed subpoenas are enforced by courts under special circumstances (see below for more).

  • It is addresses a bad feeling, a fear or a concern already existing in the listener, sometimes consciously sometimes not.

There is a fear already instilled in the people about the Patriot Act. It is a fear about data hungry Americans and FBI, NSA, CIA and all other three letter agencies having free access to data. The fear is also that this is not only to answer the terrorist threat and corruption cases. There is fear that the Americans would use their data access to steal patents to give their companies an economical and unfair advantage.

  • It usually has an element of bad and good or of guilty and innocent.

This one is easy, the bad guys are the Americans, their weapon is the patriot act and the three letter agencies’ Ethan Hunts are the enforcers.

So much for the legend, I predict that this one will be a long lasting one. It will resurface at least amongst certain audiences again and again even if it will not be as tenacious as the kidney heist story.  To get a little bit beyond the story and dig into the topic we need to have a look at the Patriot Act and its consequences. These are the only parts we could really get an understanding on. Any James Bond, Ethan Hunt, or whatever agent you favor actions I cannot analyze or judge. These things are outside of our visible world. But if you are afraid on that level you probably do not have any computers anymore anyhow and only do business locally.

The Patriot Act it is we look at. One of the statements that created quite some publicity was a statement by Microsoft during the Office 365 launch in the UK. It was a basic statement that said that there are circumstances under which Microsoft could be forced to hand over customer data even if stored in European data centers. The press picked this up happily and it sounded in many reports as if Microsoft had opened up the gates to customer data while others did not do this, quite an unlucky situation for Microsoft in a sense of unjustified bad press. The Patriot Act is the same for all companies and individuals. It has not been created for cloud computing only and therefore it needs to be viewed in a different light.

More on the Patriot Act beyond this specific view of today’s special can be found in this earlier post:

https://clouddiscussions.wordpress.com/2011/08/12/weekend-special-privacy-the-patriot-act-and-contracting-explained/

Who falls under the Patriot Act? (Not to be meant to be a comprehensive list)

  • American companies and their subsidiaries
  • Non-American companies with a substantial subsidiary in the USA
  • Non-American companies dealing with the USA or companies in the USA

Where company means all companies of any kind and not just IT cloud service providers

What would happen if a company would not follow the ruling of a court to hand over data?

What is the leverage a court would have? It is a debate that started controversial when I first discussed this with different legal experts. But there is one view that was distilled in the end and if you believe it or not, the majority agrees with it.

Whether an end customer is requested to hand over data, the US subsidiary of an end customer, a US hosting/outsourcing/cloud company or even a foreign company’s US subsidiary, the final resolve is all the same. If denied the data the US authorities would put the CEO/ manager of the US subsidiary into detention to enforce the handover of data. As far as I have understood the rules would allow a detention of up to 6 months.

Can you imagine Steve Ballmer going into jail for 6 months, or Larry Page? That is the reasons why the companies clearly state that bottom line if it comes to that they would hand over data. So how would a German company like Deutsche Telekom and their IT division T-Systems act? They claim as a German company with German data centers the Patriot Act does not apply. But T-Systems and Deutsche Telekom do have significant business in the U.S.A. Would it be different for them? My understanding is that they need to follow the same rules but they might see this different.  As always law is not black and white but shades of gray. My advice, not only for T-Systems, is to discuss this with the potential provider. And remember these rules do not only apply to cloud computing but also to all other kinds of business, e.g. Outsourcing, BPO, etc. Also important to understand is that these rules also apply to your customers themselves as soon as they do business in the U.S.A. or have a significant subsidiary there.

I have been in contact over the years with one customer that decided against the cloud. Amongst other reasons one of the dominant ones was that they had decided to rather send their American management into detention and compensate the individuals for that than handing over data. That was a policy we were not able to comply with.

So do not be misguided by an urban legend and dig to through to your own interpretation. Get legal support and create your own view on it.

Here are some Christmas urban legends: http://socyberty.com/holidays/christmas-urban-legends/

I do wish all readers and their families a merry Christmas and a happy new year. Enjoy the time off with families and friends.

The new data centers rock – even the old hands admit that

I do have seen some data centers throughout my career. There were some cool ones among these like the debis (now T-Systems) data center in Munich using a WWII bunker or the Lufthansa data center in Kelsterbach with its two shells that move against each other in case of an earthquake and the airport fire fighters across the road.  The other cool thing in Kelsterbach is a raised floor you can actually stand in. Compared to many other data centers where the raised floor is exactly what the term announces a floor that is raised by about two to three feet max, this makes a major difference.

So you can imagine that I was quite reluctant to do another datacenter tour with customers. It felt a little bit like “have you seen one, you know them all”. But I would have missed something that really felt like the next step of data center computing. I have been to the Microsoft data centers in Chicago and in Dublin and they are fascinating. Container computing sounded strange but actually makes a lot of sense. When you look at public cloud computing it is all about standardization and scalability. And these new data centers scale beyond limits.

Microsoft

The experience started with the trip to the data center. In Chicago the driver passed by it several times without noticing it. It just does not announce itself as a data center.  This is part of the security concept. Nondescript buildings do raise the security. There are then several layers of physical security, e.g. fences, segregated areas of authorization. The computing room itself looks different. It looks much like a parking garage. Only instead of cars or trucks they have parked containers in there.  Surely they still have classic areas of racks in these data centers but the mass of computing power comes in containers. At Microsoft there are even several generations of this approach already in use. The latest is deployed in Quincy, Washington and Dublin. You’ll get a good overview in the video.

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The key component is the container itself which is explained best in this short video:

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One of the common customer questions is what kind of server hardware is used in these containers. I am not spilling any names here but let me tell you that the decisive factor is neither price nor performance. It is the ability to ship the large numbers of servers needed for the rapid buildup of cloud computing power. It is fascinating to see how they connect a container to power, water and network and hand it over to operations within 24 hours. It is determined remotely what workload a container will be used for. You cannot see from the outside whether a container runs Windows Azure, Office 365, bing or Xbox live. Again this is also part of the security concept.  This video gives you an idea on the container delivery and hook up in Chicago:

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So how is data center efficiency judged nowadays. The key measurement is energy efficiency.  This starts with building the data center and its systems through operations and includes retirement of components as well as locations as a whole.  Microsoft’s flagship is the data center in Quincy,WA, and the usage of hydro energy. This creates a new level of efficiency expressed through the power utilization effectiveness value. For Microsoft’s latest generation that is in the range of 1.15 to 1.25 where a classic datacenter would be at about 2.

Colt / Verne Global

Colt has stepped up to drive the rapid deployment idea and the clean energy approach to new heights.  Verne Global wanted to build a data center in Iceland for its natural energy sources of hydro and geothermal energy. It was Colt coming up with a modular design that made this 100% clean energy approach real and deployed a full data center in record time. A classic bespoke data center would have taken 12-18 months to build. Colt built the data center within 4 months. And we are not talking about a small around the corner computing center in the basement but a fully fledge large datacenter (500 square meter).

Verne had chosen the location quite cleverly for several reasons. First of all there is the mentioned energy advantage, secondly the location allowed to tap into network cables for Europe and the U.S.A. alike and finally by having obtained a retired NATO base physical security is starting with the lay of the ground already.

You can find more information on the Colt approach and the Verne Global story on http://tomorrowsdatacenter.com

Google and others

I have not had the chance to visit a Google, Salesforce.com or Amazon data center yet. On Amazon you do find only very few information about their data centers. The same applies to Salesforce.com more or less. They do speak a little bit more about the technology but do not share a detailed view on the data centers.

Google has created a video on their data center approach. This video though is from 2004 and would be unfair to claim that their power utilization effectiveness value, 1.25 for Google, has been surpassed by Microsoft, 1.15-1.25 with Gen4. I assume that by now, 2011, Google also has improved further.  Nevertheless here is the Google video:

UPDATE UPDATE UPDATE

Here is some news about the Google data center in Finland: http://www.wired.com/wiredenterprise/2012/01/google-finland/

Beyond these obvious major players there are more players driving data centers to the next level. T-Systems as an example runs a project with Intel where they generate the power and the cooling for one of their data center cells completely by a hydrogen fuel cell.

The race is on and we all benefit from it

Even so much of this data center innovation happens outside of the general visibility we all benefit from it. These optimized data centers create the same computing power at a much lower energy usage as distributed computing would do. On top of that many of the technology innovations created as a part of this will also improve smaller data centers or even single server systems.

If you get the chance to visit any of these data centers, go for it.

Weekend Special: The perfect business device – Apple’s iPad?

I do remember Steve Ballmer’s story about a fund-raiser trying to get money from him using an iPad to present. He made some fun of it with regards to how to hold the iPad so that all can see and that a Notebook or Tablet PC (the notebooks where you flip the screen) is superior. Apart from presenting to the Microsoft CEO by using an Apple device not being a clever move I do believe Steve Ballmer underestimated or misjudged the iPad based on this early experience.

In a certain sense the iPad represents the almost perfect business device. Before you scream and disagree or applaud in favor of this statement take a step back to understand where the iPad fits into the enterprise landscape.

User segmentation

It is one of the approaches used to address SaaS in the form of Google Apps or Microsoft Office 365 to enterprise customers. As a matter of fact one size fits all is history. Today enterprise IT departments are on the lookout for standardized solutions that cater for different kind of needs. The same approach is needed to understand the iPad in an enterprise context. While the iPad is no device for content creation, it is just perfect for content consumption. So the user groups you would target with an iPad are those that mainly consume / present content rather than create it.

Examples for these roles are: Retail sales roles, mobile sales roles, and mobile service and support roles

Another group to target with the iPad are executives that would switch between devices and where the cost factor is not the main decision factor. But there is a third group as well. These are roles that create content in a much formalized fashion through forms. This could range from the traffic cop through to teller roles in a bank and many more other roles.

So there is a user group ripe to use a content consumption and limited creation device. While all these would be able to work with a Notebook as well, the Notebook is not always the best solution. And as mentioned above  the times for “one size fits all” are over.

Advantages of the iPad in a business context

Do you remember the efforts IT departments were taking to make PCs secure? I remember the days when banks ordered IBM PS2 machines without disk drives and actually paid more for less. Or the efforts that are needed nowadays to turn off USB ports. Deployment always is an issue and there is one simple solution to it – cloud computing. Rather than deploying the software you let it run in the browser. The iPad and Smartphones are the perfect cloud devices – always connected!

Another issue in the area of security always has been local storage and access to it. With centrally available storage solutions, that are accessed through the cloud,  the risk of critical content being stored locally is eradicated.

Where does the iPad fit into this story?

The iPad has no USB port and limited local storage. On top of that it connects well to cloud services. You even would be able to create and deploy your own enterprise apps in case you want to step out of the browser. With support for encryption, remote wipe even through the Exchange Management Console or from Outlook Web Access and many more security features the iPad really qualifies as an enterprise ready device. Most people do see an iPad as a consumer device but if you dig a little bit deeper you’ll find many enterprise class features. Have a look here for more details: http://www.apple.com/ipad/business/docs/iPad_Security.pdf

Still to come to make it even better

There are some areas where the iPad could be improved to even better fit enterprise requirements. The obvious point is the need for iTunes. A full integration into Asset Management, Device Management and Software Deployment tools already used in companies would strengthen the iPad’s position big time. This would also address the fact that IT departments do not seem a hundred percent happy with the current functionality around remote wipe and policy enforcement. This is more hassle than a full blocker though.

While Facetime is nice the Google+ hangout concept is much closer to the Enterprise needs. The hangouts actually do challenge Microsoft’s Lync on a broad base especially since content sharing and even screen sharing have been included. So a natural integration of Google+ would actually position the iPad for a broader use. The question would be whether it is Google’s job to create the App or Apple’s interest to even drive a closer integration of that with iOS.

Arguments against it that do not work

The one argument you here over and over again is that the iPad does not work as you cannot create content on it that is bigger than a short email. While some would challenge that I do agree that I would not want to write e.g. my blog on an iPad. This is no argument though to stop iPads from adding value to enterprise sized companies. First of all there are things like extra keyboards you could use (I personally do like the Logitech iPad 2 keyboard case). Secondly remember what we discussed earlier with regards to user segmentation.

Another argument is the risk of theft (employees as well as external thieves). I do not agree that there is a risk of theft that would prevent the enterprise use of iPads. Theft is an issue for all mobile devices from Smartphone through iPad to Notebooks. The risk connected to theft is twofold.

Data Loss

This can be prevented through encryption and remote wipe functionality. It does therefore not work as an argument against the iPad.

Value Loss

Every business item stolen is an item too much. But the facts that stop me from accepting this as an argument against the iPad are obvious if you think about it. Most Notebooks used in companies represent a higher value than iPads and these are stolen as well with nobody arguing against mobile computing. The other thing is that enterprises usually are insured against these thefts.

Conclusion

The iPad is a perfect business device for a selected group of users within an enterprise. These users must not automatically be the executives as there are other roles that would benefit even more. The iPad is a cloud device and the better the cloud backend is integrated the more value the iPad does deliver.

How will Windows 8 tablets stack up against the iPad?

This article featured the iPad as that is available on the market. To what degree Windows 8 tablets will be able to challenge the iPad’s position as an enterprise device remains to be seen. The UI of Windows 8 looks interesting and the promise of a higher integration into the management environment of Windows devices is a plus. There are risks as well. In case Microsoft creates another tablet device that is a full-blown PC in a different form factor it misses the point of a tablet as a consumption and cloud device. It will also be interesting to see whether Microsoft favors the WP7 approach to specs and requirements, very rigorous and narrow, or the PC approach, open to the OEMs to define completely.

How Microsoft could boost Office 365 and challenge Google Apps

Apart from both companies claiming to be in the lead, Google is in a great position to make the next step with Google Apps. As predicted earlier on in this blog Google+ for the Enterprise is becoming reality (revevol in France has confirmed they pilot it already). This is a major risk to Microsoft. They key question would be how quickly enterprise customers will be willing to pick up social business ways of collaboration and whether they will choose Google over SalesForce.com and Yammer. The second blocker is more a regional one with regards to data privacy rules in Europe and Google’s approach to meet them or even not. But let’s keep data privacy aside for this view on the business.

Microsoft has one asset though that could create a loyal group of users which will actively help promoting Office 365 if only it would be integrated into that.

That is the Microsoft Project product line.

With Microsoft Project and Microsoft Project Server Microsoft has ensured themselves a solid position in a market in which neither Google nor the other competitors mentioned above do play. It is a huge question mark to me why Microsoft has not taken their project management tools into the cloud yet. Not only would it enrich the overall value of Office 365 but it would also make absolute sense to have the project management hub in the cloud and available through all means of connecting to a SaaS service. The benefits are manifold.

Improved cost allocation to projects – as you book the service per project rather than keeping licenses in stock you can better allocate the cost as well as reduce the overall cost by letting unused licenses sit around just in case.

Easier integration of customers and partners – As the service would sit in the cloud rather than your own “holy” company network, the effort of giving external employees, partners and customers access to the project platform. Imaging the project server sitting in a cloud and role models are becoming real so that all parties involved can participate. A direct result will be improved reporting with less hassle.

Book it for the time you need it – Some project run several years while other only last a few weeks or months. Still the need for professional project management supported by the best tools is a commonality to all projects. By moving MS Project up into the cloud and offering it as a SaaS with variable subscriptions models would add real value to customers.

Mobile integration – Not all projects do take place in the head quarter; often you have mobile or globally dispersed teams. In the present it is a hassle and security discussion to implement mobile or remote access to resources in the company core network. Likewise it is a hassle to set up a DMZ just for a project and manage that setup. The cloud with its established ways of separation, integration and extensions like mobile phone access reduces that big time while delivering additional value to the users in an Office 365 setup with SharePoint and even E-Mail.

Without any doubt an approach like this would boost the take up of Office 365. I would even suggest including Microsoft Office 365 Project Management into Office 365 at no extra cost. Surely it will have an impact on the license sales for the classic MS Project and Microsoft Project Server but it would be worth to make sacrifices with regards to these revenues for a stronger uptake of Office 365. It is a bit like Google does it with Google Apps. They keep increasing the value through new bits and pieces. Only this thing would not be bits and pieces but a real chunk of value that would give Microsoft’ Office 365 a real marketing boost as well.

Another benefit would be that it will give folks access to Microsoft Project that might not have had it in the past and through that cement Microsoft’s position in the project management tool market.

The Energy Cloud – How Cloud Computing is an essential part of solving the world’s energy problems

When you mention cloud computing and energy in one sentence everybody has the energy consumption of huge cloud computing data centers in mind. Even if the consumption there is quite high they are usually well-managed and the unused loss of energy is low compared to a standard consumer household. Starting with the wrong way of ventilating the bedroom through energy wasting while cooking to outdated household appliances that drain the energy budget it could be said that environmental pollution and energy cost are impacted by everybody’s life.

Currently there is a very strong focus on managing the financial crises in the US and Europe and the impact of these crises is not something just up in the news but gets real for many individuals. This can be observed very well in the Unites States of Americas where many people lose their homes over mortgage costs. In a sense this is only the beginning. There is a much bleaker scenario around raising energy costs and people losing their homes over these costs.

With the oil level getting lower / the cost for accessing oil depots rising and the decline of the nuclear power plant (Germany already decided to get rid of them completely) it is obvious that energy costs will rise. Even today the energy costs already eat up a whole lot of the monthly budget of an average family. In the future energy will be the major cost position.

So much for the dark outlook on the future, how can cloud computing help? The future and clever energy generation and consumption consists of two major components.

        • Understanding and managing the demand
        • Generate energy in multiple ways and manage energy generation and storage

Both these components will depend heavily on cloud computing on a global level. Energy is not a local issue any more and therefore the solutions addressing the challenges need to be global as well.

Understanding and Managing the Demand

Standardized formulas and systems to predict demand do not work. The complexity of life that impacts the energy demand is too high. On the other hand there are many predictable dependencies. To discover these dependencies and to creating listening channels will enable energy providers to predict demand much better and as a result improve the energy management.

Just to give you an idea I want to put forward a small and simple example. If the washing machine is started and would notify a cloud system about the load, the program and the duration, the cloud system would be able to predict that by the end of the program in the washing machine the dryer will be started. The dryer could not only be informed wirelessly on the load and the best program to save energy based on the washing machines “experience”, the energy provider also can predict the energy use at a specific given time, in this case the time after the washing machine finished. It enables the energy provider to have the energy readily available for the best price due to knowledge of the upcoming demand.

If you now think about more dimensions of energy consumption in a household you get more and more ideas where this can have an effect. The first step is the improved local management within the house and you can see the first steps being made in that direction. If we want to make a huge leap in preserving our planet through better energy management than we need get the information up on the cloud and start driving improvements based on the information we could gather there.

Two of the sideline effects are a more comfortable management of the house for its inhabitants and an exchange of the majority of the household appliances for more efficient current models. Maybe the latter could also create consumerism that helps with financial crisis as well.

How I am looking forward not to crawl under the roof to turn the heating back on once it is getting colder. Today these household networks are kind of custom and expensive. To really drive towards a better future the prices need to come down and the volumes need to go up. The good thing though is that in the Western world the majority of properties is already connected to the internet one way or the other so the connection to the cloud is the lesser issue.

Another area where you can see cloud computing already at work and which is applying many of the things mentioned above is the managements of electrical powered cars. The challenges are similar. Where and when will energy be needed and how could it be predicted. Daimler, the German car maker, has created a pilot project where they combine electrical powered Smart cars with the power of the cloud. They have created an application in the cloud that not only connects the driver through his smart phone to the car but also allows the application to collect information on energy usage and demand which ultimately will result in a more efficient energy management across a whole fleet of cars. You can find some details on the project on Microsoft’s reference case story as Daimler built this system on Windows Azure.

Generate Energy in Multiple Ways and Manage Energy Generation and Storage

What are the big trends in energy generation and the challenges?  Next to solar, wind and water/wave powered energy generation there is one trend that is not discussed on a global level. That is geothermal energy. I do have the local generation of energy in households in mind where every household has its own geothermal power plant in the basement. That is energy generation in a sense of crowd sourcing. Many small energy companies rather than very few big ones – an energy 2.0 approach.

The challenge with this is the same as with solar, wind and water/wave as energy sources. Generation of energy is not analog the consumption so there is a need for storage of energy. While cloud computing is no solution for the storage itself it can help managing the grid of energy power plants, large and small, and storage locations.

The first topic of managing the energy generating grid through cloud computing with regards to local geothermal power plants is to collect information on immediate local usage and how much energy will be fed at what point in time into the public energy grid. It connects closely to the knowledge of the immediate consumption and demand in the household itself but also regional demand to ensure that energy is used without loss of transportation or will be sent to storage while more expensive energy is being sent to the consumer. This is a question of knowing the local generated amount of energy, the local demand and also of the cleverest ways to manage these.

Secondly it is about managing the wider grid as well as including all kinds of consumptions not only private homes but also electrical powered trains, cars, factories, etc. Cloud Computing is the connection link between all these. Without cloud computing as a way to gather the information but also to interact with power plants, the grid itself as well as the consumption side, we will not be able to optimize our energy consumption on global level.

One huge challenge remains though. We would need certain global standards to let this vision become real as well as a way to make this way of managing energy attractive to growth regions like China. My suggestion would be not to wait for these but to get started. Much like Germany decided not to use nuclear power plants any more without waiting for others around them to agree on this.

It is a huge opportunity for profit as well as the right thing to do for the future of the planet.

One thing in addition you might find interesting is a concept Volkswagen and a company called Lichtblick are driving. They are installing a local gas-powered power plant in your basement and you pay, next to a one-time fee, based on your consumption only. The consumption is not based on gas but on the temperature.  It is very similar to a cloud computing model as it includes the hardware and maintenance for the power plant completely. Volkswagen provides some additional information on the webpage: http://www.volkswagenag.com/content/vwcorp/info_center/en/news/2009/09/volkswagen_energy_partnership.html

 

 

 

A new global player in the public cloud game – Fujitsu

So far Fujitsu was mainly visible as a technology provider to build and optimize self-hosted IT environments (some call it private cloud) and a partner of Microsoft for Azure and Office 365. Today Fujitsu announced that they are going to offer a SaaS service themselves.

Fujitsu will be offering a CRM cloud system based on a OpenSource infrastructure.

This is quite notable in several aspects.

  • Fujitsu starts with CRM as the first own public cloud SaaS

It is not email or databases or anything else. They start with CRM and seem to have taken an example in SalesForce.com. But also Microsoft’s first cloud service for the enterprise has been CRM (USA & Canada only until recently). While Microsoft did it mainly through an acquisition as far as I know Fujitsu built this on its own.  

 

  • They base it on Open Source

Is this a surprise? On a bigger picture it certainly is not. Look at what VMware is currently doing with the “Microcloud”. But it probably was a surprise to Microsoft given the fact that Fujitsu in one of the very few to build the Azure Appliance (which itself seems stalled).

 

  • What is Fujitsu’s target market

Some guessing on my side here as Fujitsu has not announced this yet. I do assume two things here. First Fujitsu will target the Asian market primarily and secondly they will aim at small to mid-sized companies.  I do draw this conclusion based on the simple fact that a SaaS CRM is a great solution for the small and medium-sized companies that so far were not able to afford CRM solutions. The large and very large enterprises do expect customizations and that contradicts SaaS.

The aspect with Asia is an assumption based on the fact that in the Western market there is already a fierce competition with SalesForce.com, Microsoft, SAP, etc. just to name a few. Fujitsu in Asia has a strong foothold in the market in general and can build upon its brand. So the market potential with regards to quick growth is much higher in Asia. The other advantage with Asia is Fujitsu’s existing infrastructure aka data centers and network connectivity. This is something all the western companies do struggle with (where to pu the d/c, how to create data redundancy…).

 Why did they choose CRM if that is a market already well covered? The answer is easy, it is a market also well prepared for the SaaS delivery model. The cost of sales would be much higher if Fujitsu would create a new market as a starting point. It will be interesting to see to what degree Fujitsu will attract a channel to resell the cloud CRM or whether they focus on their own sales force. I am likewise curious how the strategy beyond CRM looks like if you think of the social enterprise vision created by Marc Benioff’s SalesForce.com.

Let’s keep a close eye on Fujitsu and its next steps. I will update this article with new findings, announcements, etc.

 

 

The Cloud Confusion in the Enterprise is a great thing

Do not get me wrong confusion usually never does any good. But in this case actually the many definitions and interpretations of what cloud is or could be have a very bright side. Let me outline some examples of the confusion first.

PWC study

Today someone shared a PWC study with me. I admit I had high hopes but was utterly disappointed. They created a wild mix of private and public, compared apples to pears and even had some misleading, if not straightforward wrong, information on data privacy in there. I know some of the folks they cited personally and how they think about cloud. That you create a total confusion of a topic by mixing these topics and people is no surprise. Still they had a professor signing it. Strange enough isn’t it.

Discussion with an ECM software company

They stepped up deliver services on top of their software. While this is a great decision in itself they got lured by the big hype in the market to call their hosted solution a private cloud. Do not get me wrong, their solution is great and it is a fantastic first step into the right direction but it is no cloud in a religious sense. Much like Microsoft did with BPOS-Dedicated which was no cloud either but nonetheless their starting point for a journey towards multi-tenant cloud services.

Battle between Larry Ellison and Marc Benioff

It was fun watching these to alpha males battling themselves. But actually what did they discuss? They discussed technology and bits and bytes rather than the value cloud computing could deliver. I am convinced that Marc has a better story (see cloudforce videos) but he got lured into this “my technology is better than yours” battle. Apart from the technology experts and the cloud experts they left the world baffled. What is it these two are discussing? Is it relevant? Is it relevant for me?

That and many customer discussions I have had, have proven that confusion is all around us. So I believe nobody would battle that statement. But what is about this one?

I actually do tell you the confusion is great.

Surely, you would argue,  it is good for someone like me helping customers to identify business potential and make the whole cloud discussion business relevant but that is not my point today. It is good for the whole industry!

The Cloud Confusion opens doors that would have otherwise been closed.

It creates a need to talk the whole cloud thing through. It gives folks a chance to sell their solution as a cloud, against cloud or disguised as a cloud. It is a conversation starter that keeps the discussion between customer executives and service providers, technology providers and consultants alive. You might go from there into the direction of virtualization or CRM or social collaboration or the creation of a new mobile application or many other things. But at least you go somewhere. Even if you do not sell cloud computing at all, so neither technology nor a real service, you do benefit from this discussion as it has potential to free up resources for what you want to achieve.

So in that sense the confusion is great. If everybody would have a united understanding of what cloud computing is and where the benefits are, the sales profession would be much harder.

Remember: You can only sell fridges to Eskimos if you talk to them in the first place!

The art of selling SaaS to enterprises

Selling Software as a Service (SaaS) is like all sales – it is an art. I remember the theme of art and science that Austen Mulinder introduced to Microsoft when he joined the Enterprise and Partner Group.

You have to master the science to be an artist or the best artist (seller) cannot thrive if he does not play along the basic science rules. Anybody still remember the World Class Selling Formula. Put in a comment with you translation of C A R E.

I do come back to all this thinking especially when I observe how SaaS is being sold in the market. Or should I say how it is tried to be sold?

Let’s cover the science piece first. You need to understand the basics. The basics are simple but still involve work to really master them.

  • Understand the features and the differences to the feature sets on premise
  • Read and understand all the contract documents
  • Especially take an effort to understand the SLAs
  • Get into local data privacy requirements and how you answer theses
  • Understand the price model and transition routes from classic licensing

I have met too many people who have tried selling SaaS but actually never read the contract or understood which contract documents were needed and where these were stored. I do know that the bandwidth from architecture and features through contracting and data privacy up to pricing models is quite broad but that is why you hopefully get paid some good money. I personally have always enjoyed working in tandem with an architect to be able to cover the nitty-gritty technical details while he was happy that I am a deep pool of knowledge when it comes to contracting, privacy rules and pricing. I have yet to meet someone who excels in all areas.

Once you have covered these basics you are in a good shape to start thinking. Yes, thinking and not selling is the next step. The majority of the sales people out there selling cloud services does stop here and goes selling. They sell the science. You can see this in all these pitches talking about technology, talking about features and bit and bytes. And you can see this as well in discussions with them about their competition. I remember a discussion I had with a seller who asked me on their competition and who I would see. I told him I do see three kinds of competition.

  • Do nothing
  • Some obvious cloud competitor
  • A classic hoster/outsourcer

This answer completely surprised him. He said the third group do not offer cloud services why are they competitors. The answer is easy. Look at it from a customer perspective and not a technology and label perspective. The customer has a business need and analyses all options to meet this business need. There is no customer out there going shopping for the cloud. They all look for answers to their business needs. The seller’s mistake was that he took the feature view. He was fooled by the marketing and sales story that focuses on bits and bytes rather than the business need.

They sell what is under the hood rather where the ride could take the customer.

This is now where the art comes into play. And do not get fooled there are many kinds of arts. One art is the art of building relationships which makes the distinction between a good and a great account manager.

Another art and that is the essential one for a successful sale of cloud services, is the art of storytelling. It is all about taking the bits of information you gathered in the science lesson and to transfer these into a story that relates to your customer, to the customer’s business and finally to the customer’s current and future needs. The art is about creating a vision that resonates with customer and instills a need that might not be there yet or by answering a need in a new way.

This approach is not used today. Only very few cloud sellers do create stories that resonate with customers. It starts at the top. Look at Oracle’s discussion of the cloud. It is all about the technology and not at all about the business benefits. Look at the discussions about the cloud in the streams (whether you look at Google+ or LinkedIn or wherever) it is all about features and bits and bytes. Look at the books out in the market, they are all about installing and migrating and configuring. But they are not about the business scenarios cloud computing might help with. Look at the job openings which are all for architects, developers and other technology roles.

Cloud computing today is ruled by scientists.

A trend can hop along for a while on the backs of the specialists but to really become a mainstream topic and not die down as just another technology buzz it needs the artists.

  • The art of translation
  • The art of storytelling
  • The art of thinking beyond bits and bytes

You might want to argue that in any larger organization there are already artists. I agree but these artists usually are not ready yet or never will be ready for the art needed for the cloud. Let’s look at the big companies.

Microsoft’s artists are software business artists and struggle with the concept of cloud.

Google’s artists are consumer and search artists that struggle with the large enterprise story.

Oracle’s artists are technology artists that are probably more scientists than artists in the first place.

IBM has the artists but does not seem to believe in public cloud services so does not let their artists loose.

This is a reality even though you might argue based on exemplary exceptions. The providers have not yet woken up. They need to start getting artists in and they need to realize that an artist is more expensive than the usual scientist. But it will pay especially if you do get your troops organized before your competition does.

Social Enterprise – Quo Vadis Microsoft

It is crunch time for Microsoft and the clock is ticking.

The real battle for the future of Microsoft is taking place in the enterprise space. It is all about Microsoft’s future role as the player in the collaboration space as well as bringing the business software to use in a new century kind of way. Let us not dwell on the competitors. I have covered Google and Salesforce.com before.

Let’s first look at the two major components needed:

  • Internal collaboration
  • Collaboration with customers and consumers in social networks

So far Microsoft’s position in the market for collaboration enterprise tools is quite strong. Exchange is the major corporate e-mail system, SharePoint is growing at fantastic rates and even Lync is gaining foothold. With Office 365 Microsoft has even introduced a “Software as a Service” (SaaS) offering where Microsoft runs the programs mentioned above for their customers in the cloud. As a matter of fact though these cloud versions do have a limited feature set. This is especially true for SharePoint.

Next to this Microsoft does have CRM software, which again is available as an on premise version as well as an online version, SaaS, from the cloud.

So it looks like from a component perspective as well as the market position Microsoft seems to be in a great spot. That is only half the truth. Microsoft is facing some real issues when it comes to making the step towards a fully integrated collaboration stack:

  • Lack of social collaboration component
  • Separation of products / lack of integration
  • Cloud not being the primary focus

You might remember the old day when the interface for Word looked completely different from Excel and you wondered how that could have happened? The easy answer is that two separate groups with minimal alignment created their products like standalone versions. To a high degree that is what is happening within Microsoft still today. Not only is the obvious demarcation line between CRM, as an acquired product line, and the classic Office programs doing harm. There is more to it. There is an undecided dispute about the direction of cloud delivery and many still believe that cloud delivery must be forced to be less feature rich artificially. This is not only to harvest the classic software business margins but also to protect existing empires within the organization.  CRM Online only with the latest version was shifted onto the same platform as the Microsoft Online services. Up until then it was delivered on the Windows Live consumer foundation. The integration mainly happens at the front end; a real integration as one collaboration system has not taken place yet.

And there is a missing link as well. Rather than being a step ahead on collaborative needs of enterprise customers Microsoft has been overtaken by the likes of Yammer and Salesforce.com. While e-mail will not go away its importance is diminishing. New ways of communication and collaboration are taking over and Microsoft is struggling to embed these into their products. Admittedly SharePoint does have bits and pieces like WIKIs but not in an easily integrated fashion and again there are limitations to the cloud version.

Let’s look at the second part of the recipe now – Collaboration with customers and consumers in social networks. This is even more difficult for Microsoft as they do not have any legacy in this business they would be able to build upon. Microsoft tried to drive identity with the Live ID but other than Google, who only lately took the identity business serious, they have not build a social network around it. Salesforce.com is lacking the social network as well but they cleverly integrated Facebook into their world.

So on the “connect to consumer” sides of things the Microsoft options are somewhat limited but there is one asset Microsoft has. Social connection does not only take place B2C but also B2B. With the still existing spread of their products in the enterprise space they would be able to build the connections between enterprises. Time is running though as Salesforce.com is not only pulling customers over to their side but also building integrations into SharePoint for those wanting to stick to the “old world”.

Quo Vadis Microsoft?

If you ask me there is no question that Microsoft needs to get its act together quite quickly. It is without alternative that they become a player on both sides of the social enterprise urgently. But how can they do that? As always in life there are no easy answers but I have tried to put together some actions.

Internal collaboration – Acquire Yammer.com and focus on O365

The cloud delivery is the future for these standardized components. So a focus on O365 and feature parity should be a mantra within Microsoft. To speed things up it would make sense for Microsoft to buy Yammer.com. Only with their stack of services, their mindset and their customer set Microsoft can really get into the race. Salesforce.com has a clear lead and Google, once they understand the potential of Google+ for the Enterprise, will be following suit.

Yammer also makes sense from a delivery perspective. Due to their strong cloud focus they force Microsoft to put the cloud integration first. Any on premise spin off of the Yammer software has to wait. And actually this order of priorities makes a lot of sense.

Internal collaboration – Fully integrate CRM

The separation of CRM from the other products is causing issues. Salesforce.com has proven that actually CRM as the major deposit of information is the backbone of the collaboration infrastructure. Microsoft should reconsider the suite of services. This goes into the direction of the actual software itself but also its sales. Even today the CRM sales people are more or less separated within the Microsoft field. The future is an integrated collaboration story including CRM and this only works with integrated solutions and services but also a consistent integrated value story told by one force.

External collaboration – Integrate with Google+ and Facebook

Let’s face it, with Microsoft’s image and two major social networks already existing the probability of creating another successful social network under the Microsoft label are more than limited. Accepting this as a fact leaves not much alternative. Microsoft would need to make sure to make the best out of the open APIs to integrate into these social networks.

Will Google try to protect their world? I guess so but giving the current climate with regards to market control I do believe Microsoft has a lever to keep the doors open.

Bottom line

So what is blocking Microsoft to go down this path?

  • Lack of cash to buy Yammer?

No certainly not, Microsoft would be able to make this strategic acquisition

  • Organizational agility to make changes needed?

Yes, for sure. This is the major blocker. To drive the integrated vision of collaboration, Microsoft has to break up its organizational kingdoms. Microsoft has to make the shift to the cloud for real.

  • Vision not formulated

That is another issue strongly impacting the ability to make organizational changes. Lacking a broader vision people can buy in, thrive to achieve and are willing to take risks for, they will stick to their comfort zones and protect their silos.

It is crunch time for Microsoft and the clock is ticking. I just hope that the Microsoft management is not too distracted by phones, tablets, etc.

 

 

Weekend Special: Is Cloud Computing as a trend over and actually deceiving CIOs?

Cloud Computing is a constant theme in the news-streams and still rated as a trend. While this suits me well as a cloud computing evangelist it makes sense to take a step back and try to understand whether it really is the transforming trend.

Let me start by recapping some of my thoughts expressed throughout my blog.

  • Cloud Computing as a term is too broad
    • At least a distinction into consumer cloud and enterprise cloud computing is needed
  • Cloud Computing is a business concept
    • Though the majority of the discussion is technology focused cloud computing remains a business approach
    • This is where Oracle sets the wrong focus in the discussion. They display what is under the hood rather than talk about the ride that is enabled.
  • Very few real private clouds are being built. The majority just use enabling technologies.
    • More or less a direct result of the technical focus of the cloud computing debate

On that foundation I’d like to get to another level of crispness. Cloud Computing is all about IT Operations in a different way. It is just another arrow in the quiver of an IT department to deliver IT. Therefore the margins are marginal and only through scale it can work economically. And in that per se it is a cost cutting approach which in itself is of limited business value.

The business value of cloud computing is elsewhere. It is in the areas enabled through cloud computing. It lies in the possibilities to create small and grow big without the restraints of investments into operations and brick. It is about enabling creativity by giving business departments the power to trial, to create and to share. The magic of software is what makes the difference and cloud computing gets software into places where it was too expensive before or other blockers were in place.

So can a CIO ignore cloud computing? I would say no but also would argue that cloud computing should not be front and center of a CIOs mind. Sounds strange to you? Think about it, cloud computing is a delivery option and therefore needs to be evaluated whenever something must be delivered. A CIO should focus the thinking around how to deliver business value. This is not a new statement and is a constant demand on CIOs for years. Nevertheless the reality makes it difficult for CIOs to live up to that demand and it will become more difficult due to cloud computing. Cloud Computing enables business departments themselves to become creators in an IT sense. The IT department is reduced to provide the technical abilities to cater for this creativity. They service the engine so to say. There are two areas though where the CIO needs to have a clear strategy

Define and manage the rails for business department developments

While cloud computing enables business departments to create themselves it is important for an overall functioning system as well as to avoid duplicate work to set guidelines and guard these. You want to avoid that anybody just creates on any platform; you would want to ensure a minimum quality and enable sharing.  It is the CIO’s job to set the rules that enable rather than stifle creativity. It is the IT department’s job to provide the foundation on which developments can happen. And it is up to the CIO and his team to tightly observe the developments. Here are some ideas to drive further value:

  • Application Store
    • Create an internal application store where business department solutions are presented and available for other departments to use.
    • Make it mandatory that all developments are open for sharing
    • Make it mandatory that the source code is openly available
  • Development Team
    • For those departments having ideas but lacking development capabilities the IT department should offer development services
    • This can also help to ensure that business departments are not creating their own programming sub groups
  • Budget Control
    • Work with the board to come up with rules on what percentage of budget a business department can spend on developing applications on their own and by when it needs to be sourced to or through the IT department
    • Also set clear rules on application maintenance and support. Who does what and who pays for it?

Collaboration internally and externally

In the past the internal collaboration was put in the desktop services group within the IT department. Let’s face it; working on desktop services is not the place to become loved by everybody. The users did not like the desktop services folks if not to say they hate them because the users never get the Apple Mac or the nice flat screen or that other mail system they prefer. With Microsoft licensing in the back and a regular need to upgrade not only the front-end but also the back-end desktop services are also a constant thornin the side of the CIO.

Why should that area be a focus of the CIO then? The reason is simply because a huge shift, a transition or if you want to call it that, a paradigm shift is taking place. It is about transforming the separated streams of communication (email, voice …) towards an integrated experience. It is about using the means of social media to improve internal collaboration.  The bits and pieces that are currently delivered under the theme desktop services need to be evaluated and either discarded for a new integrated world or if kept upgraded into the new world of collaboration.

Internal collaboration though is only half of the story. Even though an improved internal collaboration already has a long-lasting business effect combining it with external collaboration creates real business value. Actually let us call it what it is – creating the social enterprise

This is the current challenge for a CIO. Identify how a social enterprise should look like and create it with maximum force and speed. It could make the difference to your competitors if you listen to your customers where they do not. It certainly will be one of your major benefits attracting talent to your company as the next generation will expect to have the social media tools in place.

And this is where cloud computing as an enabler comes into play again. It is a viable business option for the collaboration tools needed but also you need to consider a bridge to the consumer cloud in case you customers are consumers. If your customers are business customers only you need to create bridges to their social enterprise systems, if they have any, or let them participate in yours, if they have not.

These are the challenges a CIO should focus on. Cloud Computing as a focus topic in itself is over!