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On July 19, 2010, Rackspace led the announcement of OpenStack, with a goal of creating an open source cloud software solution for use on industry-standard hardware.  The initial releases contemplate solutions for both cloud compute and object storage.  While these are the first two releases, they are separate offerings.  Remember, cloud storage is not just the storage target for cloud computing, it is one potential storage target for cloud computing, and is in and of itself a stand alone cloud offering of programmable storage.

Now, I have purposely used a term from the clothing industry, "off the rack", to spend a moment looking at a framework for evaluating the opportunities this may present.  With dress shirts, you can buy off the rack, semi custom, or custom, each with a unique value proposition based on fit, choice and cost.   Interestingly enough, this may be a good lens through which to consider the possibilities of OpenStack, and in particular, OpenStack Object Storage.

Rackspace has made no secret of its motivations for leading this initiative, and its desire to focus on "fanatical" service as it's key differentiator versus the fundamental technology on which the service is based.  Fair enough, and so the question becomes, is the rapidly emerging and immature cloud marketplace already "mature" enough to seek homeostasis?  (Homeostasis is the property of a system, either open or closed, that regulates its internal environment and tends to maintain a stable, constant condition.)  Have enough models and innovations, from startups, academia, open source movements and large tech companies, been tested in the marketplace to the extent that we can already race to the common denominator?  Perhaps now is a good time to start, as long as you are willing to acknowledge that the desired results are a good ways off.

Before we jump off into "Off the Rack" software, a quick look back at open source is helpful.  For more reading on the open source software industry a good introduction is The Cathedral and the Bazaar. Six things are particularly interesting: 

1. An open source alternative can emerge as a follow on to a successful commercial technology and can become pervasive versus the commercial offerings it succeeded (LINUX versus UNIX is the reference case here).
   
2. A second result of this approach can also end up with a big success, although in more of a niche than a pervasive replace for the earlier commercial offerings (MySQL versus Oracle, IBM and Microsoft in the relational data base space).  
   
3. An open source effort can also emerge earlier in a technology cycle and come of age as a pervasive solution (Apache Web Server comes to mind here).
   
4. Open source generally requires very careful cultivation of the community of developers, with active interest by academia (and partnering with NASA is part of the formula here).  Commercially sponsored open source efforts are becoming more common, although it as of yet has not been proven as the typical "breeding ground" for most great open source successes.  Eucalyptus, with its roots at University of California Santa Barbara, seems to be a more traditional route.
   
5. Open source is not necessarily reflective of rapid commercial opportunities for success.  Eucalyptus is obviously beginning to maneuver towards a repeat of the commercialization model.  OpenStack is taking the approach most favored by other open source successes like Apache.  A couple of good reads here are this article from BusinessWeek and this. See also Derrick Harris' post over at GigaOm.
   
6. There are also hundreds of thousands of open source projects that had mixed success or languished altogether. A quick look at  SourceForge (an open source project hosting site) shows nearly a quarter million hosted projects. How many of these have languished or had little impact on the market.
   

So, the first issue is that there will exist for some time to come a real question as to the adoption potential of OpenStack.   I believe that adoption is driven by applicability to need.  In a moment we will address a serious issue which OpenStack Object Storage must overcome to be successful, at best, and at worst, will confine it to a niche market.  My views are very much directed at the Object Storage offering, versus the compute offering, which I believe exists in a different space and as a different type of solution.  With this backdrop, let's have a look at the cloud storage marketplace today, and use the analogy of off the rack, semi custom and custom:

• Off the Rack:  implement as is, one size fits all, each with unique approaches for performance, scalability, bit integrity, may or may not provide geo services.
• Semi Custom:  Select from storage types (DAS, SAN, NAS, JBOD), shared or distributed file systems and object systems, mix and match storage for different SLA and cost/usage patterns on the same infrastructure, multiple APIs, meta data and catalog abstracted from storage layer, geo services.
• Custom:  Generally a service only offering and not available as deployable infrastructure, specifics will vary widely based on service provider offering strategy.
  

Infrastructure	Type	Comments
Eucalyptus	Off the Rack	Limited S3 APIs
OpenStack	Off the Rack	CloudFiles APIs
Scality	Off the Rack	S3 APIs
Mezeo	Semi Custom	Mezeo ReST APIs and S3 APIs
NetApp	Off the Rack	Bycast APIs, NetApp storage
EMC Atmos	Off the Rack	Atmos ReST APIs, EMC storage
Service	Type	Comments
Amazon S3	Custom	S3 APIs
Microsoft Azure	Custom	Windows centric
Rackspace	Off the Rack	Is the basis for OpenStack
Nirvanix	Custom	SOAP APIs, multi node
Google	Custom	Offers S3 APIs
AT&T Synaptic	Off the Rack	Based on EMC Atmos
OpSource, SoftLayer, Layered Tech and others	Custom	Based on Mezeo

As you can see from the summary above, there exist as many views of what constitutes either a cloud storage service or a desirable cloud storage deployable infrastructure as there are service providers and vendors.  Note that a semi custom infrastructure results in a "custom" service as implemented.  "Off the rack" results in very similar services by those who utilize the same infrastructure unless they make their own major additions.  Any offering can be differentiated by service, and the degree and quality of service is critical to customer satisfaction and plays a strong role in value creation.

The OpenStack announcement as it regards Object Store and its approach to cloud storage seems to view cloud storage infrastructure as highly akin to an operating system (or at least a "hypervisor") and more similar to a selection of LINUX or Windows than that of an application or middleware layer.  While I agree that cloud compute is very close to this model, cloud storage is a service oriented architecture, with programmability for new applications that can tolerate Internet latency because of Web Services (like ReST APIs). The industry constantly overlooks this key point as it is consumed with the low cost, pay for use and thin provisioning capabilities of this storage tier.  Solutions for thin provisioning and low cost have been available far longer than cloud storage. Further, pay for use is more of a business decision than a technology. 

In the earliest days of cloud storage, there existed initial confusion that cloud storage was defined by cost, scalability, pay for use, and thin provisioning only and not programmable access (usually via ReST APIs).  ParaScale paid a huge price for not understanding that cloud storage requires Web services (like ReST API) access.  Now, with OpenStack Object Store, we see a follow on case of this same perspective, but with basic APIs for Put, Get and List.   Yes, it provides for Internet access via ReST APIs, but the focus continues to be primarily cost based versus new application enablement based.  It could be argued that the open source approach will provide for the appropriate additions of "advanced services" to be added.  However, even the use of the platform by NASA is more focused on cost of storage than on advanced functionality because NASA stores much more data than almost any institution or enterprise in the world.

I think Savio Rodrigues states this view very well in his post:

"Select products based on business needs, not license alone: It's also interesting to note that very few enterprises are in NASA's position with regards to size of IT investment and skills in-house. While NASA engineers were ready and willing to contribute new features into the Eucalyptus open source community, few companies have the skills or governance to consider allowing their developers to contribute to open source projects.  Summary trend number 7 from the 2010 Eclipse survey results highlighted this issue.

To suggest that NASA's buying or IT decision making patterns represents much more than the top 1 percent of IT buyers would be a stretch."

The overwhelming majority of enterprises would rather pay a vendor to deliver, maintain, support and enhance their private cloud software infrastructure than place that burden on internal IT staff. Whether the enterprise is paying for a closed source commercial product, a commercial product based on an open core product, or a subscription to an open source product, the product selection decision will be made based on business requirements much broader than 'is the product open source or not?' "

Keep in mind that cloud storage is a stand alone service associated with application delivery over the Internet and also associated with low cost, pay for use, scalable storage resources.  Social media applications and many Web based applications exploit these capabilities; for example publishing a file to a URL and significant tagging of files.

This view of cloud storage as nothing more than cost and volume-based ignores its extraordinary importance as a service-oriented architecture for new application enablement.  I believe both views are equally important and need to be equally served.  Will OpenStack, with its pervasive cost focus, be able to drive its community to this additional view of needed contributions of advanced services for cloud storage?  Lydia Leong of Gartner Group provides an interesting view of the open source community issues associated with this in her post:

"At the same time, open sourcing is not necessarily a way to software success. Rackspace has a whole host of new challenges that it will have to meet. First, it must ensure that the roadmap of the new project aligns sufficiently with its own needs, since it has decided that it will use the project's public codebase for its own service. Second, it now has to manage and just as importantly, lead, an open-source community, getting useful commits from outside contributors and managing the commit process. (Rackspace and NASA have formed a board for governance of the project, on which they have multiple seats but are in the minority.) Third, as with all such things, there are potential code-quality issues, the impact of which become significantly magnified when running operations at massive scale."

One last comment on this business of vendor lock in and cloud storage APIs (another focus of the OpenStack announcement).  I would submit that while a specific set of APIs has the potential to create vendor lock in, this is a much smaller problem than what is experienced in other technologies.  If you are really worried about it, you probably have never actually written a ReST API call.  It is written in many languages, and we have seen cases where applications that run on S3 run unchanged on Mezeo.  Others need very minor modifications, and still others are excited to take advantage of some of the unique Mezeo services.  It just is not a problem, and this is much more related to FUD (fear, uncertainty and doubt) and marketing zealotry than it is associated with technological reality.  The APIs of choice will shake out, and it is far to early to say if it will be S3, OpenStack, CDMI or a combination of all of these, and others, as yet unforeseen.  (At Mezeo, we have never believed there will be one winner, and instead focused on architecture to enable easy and effective delivery of whichever APIs stand the test of time.)

The interesting view that seems to be missing here is that marketplace competition by service providers already serves to drive down the price of cloud storage, so a commoditized stack embraced by most is unlikely to yield extraordinary incremental savings.  At the same time, while the competitive market conspires to drive cloud storage costs ever lower, the need to differentiate, and deliver solutions as well as a programmable storage to enable multiple new and exciting types of applications will rapidly replace the pure cost and scale focus of current cloud storage offerings.  Sometimes, the "new" application is simply enabling it in the cloud, to produce the same result at a lower cost!  This requires significant cloud storage functionality in order to make this easy and productive.  Amazon continues to prove this with their many additions and capabilities which differentiate their service.  Mezeo sees much the same view on the part of our customers.  The focus is on what cloud storage can do, what problems will it solve, what business opportunities does it create, what new applications can it enable and all of these views assume it will be competitively priced.

Cloud storage represents significant opportunities for institutions, the enterprise (see my recent post on the business case for enterprise cloud storage) and for the IT service provider.  Cloud storage is substantially different from cloud compute, and requires that you understand this difference in order to effectively evaluate the impact of this announcement, as well as your next steps.

Austin, Texas - The Mezeo team has been at HostingCon this week.  This is our third time at this show, and each year we have seen the show grow and mature - reflecting the maturation of the hosting industry itself.

What we are observing at the show this year - and in the industry itself when we talk to customers - is a coming of age for the hosting industry and cloud storage.   Vendors and service providers truly "get it" now, and realize that they have to go to market with more than just a platform.  They need a solution that solves a customer problem. 

At the same time, we are seeing technologies maturing, more vendors coming to market with cloud storage offerings and more of what we refer to as "cloud enabling" solutions (i.e., solutions like TwinStrata's CloudArray and CTERA that target storage clouds).  The result is more solutions that help solve real business problems and help service providers push more data to the cloud.  
So, yes, the hosting industry continues to mature.  It's an exciting time to be in the industry and we only see great things to come.

We see a lot of coverage about cloud storage these days - and why it is or is not being adopted. One way to look at cloud storage adoption is to view it as an evolutionary process which changes over time, as both the organization matures and becomes adept at leveraging the new technology, and as the technology itself evolves to meet the real needs of the end-user.  The common name for this sort of thinking is a "maturity model."

With that in mind we developed this simple maturity model for cloud storage, based on the actual cloud storage adoption process we're witnessing in the industry. We'd like to hear your thoughts - are you seeing the same trends?


PHASE ONE: Public Cloud Storage

Description
There remains significant marketplace confusion about what constitutes cloud storage.  Cloud storage is a persistent storage for unstructured data accessed via Web services APIs over a network (LAN or WAN), with the additional  characteristics of rapid provisioning of both new accounts of any size as well as rapid provisioning of increases (or decreases) in account size, along with a pay for use model, Some believe that cloud storage is just the provisioning and pay for use model with access method being varied between older technologies (CIFS/NFS) and http (Web services API access).  Public, multi-tenant storage clouds as delivered by service providers clearly meet our definition, as traditional access methods like CIFS/NFS are not useful over the Internet.

Many technologists and almost all non technologists, make the initial mistake that cloud storage is simply the storage used when using cloud computing.  In fact, a cloud computing image (CCI) may very well be provisioned and stored when not in use on traditional iscsi type storage systems, and is often dependent on very high speed access associated with a locally attached device.  Many times, the data needed for the application supported by the CCI is often stored on shared storage devices within the same data center as the CCI, for application performance reasons.  The data for these CCIs may also be block, or data base data.  This is storage for cloud computing, but it is not "Cloud Storage"!  This confusion permeates the marketplace in Phase One.  Many vendors, particularly traditional storage vendors, have confused the marketplace by claiming to be cloud storage based on "thin provisioning" attributes with traditional data center access versus HTTP access. Cloud storage may also be accessed and utilized by CCI based applications, but that is not a defining attribute of cloud storage.  Cloud storage is accessed by applications on both CCIs and dedicated servers, as well as clients on PDA's and PC's, wherever they are and whenever they need access.  The use cases are very tolerant of the latency associated with the Internet. The thin provisioning and pay for use model of cloud storage does deliver the important cloud storage attribute of transferring storage costs from a CAPEX to an OPEX basis, if you are acquiring your cloud storage form a service provider on a pay for use basis.

 The IT service provider space is the earliest adopter of cloud storage, for both offensive and defensive purposes.  Many service providers are hosting workloads on dedicated or virtual servers (CCIs), and the workloads are new applications that utilize cloud storage from companies like Amazon S3, Rackspace Cloud Files, Nirvanix, and SoftLayer CloudLayer. Since the amount of data can be very large, it is difficult to move without downtime. And since the processing is relatively easy to move, IT service providers recognize the need for their own cloud storage service in order to provide a complete offering to their customers and to promote retention.  Without the associated cloud storage, the application server workload can easily move, usually to the provider who provides the storage cloud.  This is the defensive argument for service providers to offer their own storage cloud.  On the offensive side, cloud storage is growing rapidly in terms of adoption, provides a new revenue stream, can attract new hosted workloads (cloud or otherwise), and drives increased (and very profitable) bandwidth use.

The web hosting industry also saw the initial development activities associated with adoption of Web services APIs, which provide many programming capabilities that are now resident in the storage, and easily enabled new applications that are delivered via the Web.  These services, including tagging, searching and filtering, sharing, publishing, and collaboration, all exist within the APIs of a storage cloud, and are easily implemented within the application.  While the enterprise has not yet adopted this new functionality, it has become quite pervasive within social networking apps, enabling new apps on mobile devices, file sharing services, and online file services, and backup and archive services.

Cloud storage is currently offered by only a few service providers including Amazon (S3); SoftLayer (CloudLayer); Rackspace (CloudFiles), Nirvanix, and is only available as a service.  Enterprise adoption is limited to development only, primarily testing, and enterprise adoption has not yet occurred, primarily because of security concerns.

Key attributes

Adoption Drivers:
Business drivers: low cost, rapid scalability and on-demand capacity
Technology enablers: New programming capabilities

Adopters:
- SMBs/ SMEs
- Developers
- Consumers

Use Cases:  
- Testing and application development
- SaaS (Consumer & SME/SMB users: Backup, file sharing, additional device storage, rich media)

Differentiators:  
- SLA variability
- Pricing elements

PHASE TWO: Public & Private Cloud Storage

Description: As large enterprises start to fully comprehend the benefits of cloud storage, their interest grows.  While security concerns keep them from adopting the public cloud, they begin building private clouds behind their firewall. A private cloud provides them with the level of control and security that they are comfortable with and improves the utilization rates of their existing storage infrastructure, because of thin provisioning and potential for technology reuse. Enterprises start to roll out advanced capabilities such as file sharing and collaboration to their employees and their partners. The initial use of storage cloud services allow the enterprise to begin initial development of storage cloud based applications.  They also start to move backup and archives into their  own clouds. Since these applications do not require the highest performing storage, enterprises are able to reuse decommissioned hardware. This effectively starts the process of "tiered storage." 

At the same time, the public cloud storage offerings continue to grow.  The availability of deployable solutions to create your own storage cloud begin to arrive in the market, enabling IT service providers to quickly implement storage clouds versus being faced with a roll your own development effort.  Public storage cloud service offerings become more pervasive and better accepted as security and awareness increases.

Key attributes (Private Cloud Storage)

Adoption Drivers:
Business drivers: low cost, rapid scalability, high security and control
Technology enablers: new programming capabilities, cloud gateways (such as Blue Thread, Entropy)

Adopters:
- Enterprises

Use Cases: 
- Application Development
- Testing
- Backup
- Archiving
- File Sharing and Collaboration

Key attributes (Public Cloud Storage)

Adoption Drivers:
Business drivers: Low cost, rapid scalability, on-demand capacity
Technology enablers: new programming capabilities, cloud gateways generating multi-cloud usage

Adopters:
- SMBs/SMEs
- Developers
- Consumers
- Enterprise Evaluators

Use Cases: 
- Testing and application development
- Backup
- SaaS (Consumer & SME/SMB users: Backup, file sharing, additional device storage, rich media)
- Personal cloud storage with access clients
- Backup and archiving using cloud gateway
- Special use cases enabled by cloud gateway
- File server replacement
- Availability of CIFS/NFS access within the data center

Differentiators: 
- SLA variability
- Pricing
- Scalability and performance
- Access options

PHASE THREE: Public, Private and Hybrid Cloud Storage

Description: The maturity of the cloud (both private and public) has enabled many new applications which now require all the advanced services of a storage cloud (Web services API access, tagging, search, sharing, collaboration, etc).  Capabilities such as Geo Access (accessing files from a repository closest to the requester) and Geo Replication (policy driven replication across geographies to facilitate disaster recovery) are realized.  As Internet latency is constantly improving, more and more applications become "cloudy" in terms of storage, and cloud location becomes slightly less important as associated with performance.  Cloud storage is now a requirement of developers and development platforms.  Most SaaS applications also expect the availability of cloud storage.  Everyone is storing everything!  Most importantly, the improved security in public storage cloud offerings begins to blur the distinction of importance of security as being where data is stored (in public or private clouds).  Instead, applications utilize both public and private clouds, for reasons associated with location of data, disaster recovery and backup, and CAPEX versus OPEX.   Only the most sensitive data still retains a private cloud requirement.  Performance is a more salient driver of where the data is stored, does it need to be on a LAN in the same data center as the application?

This use of both public and private clouds as solutions for storage, often by the same application, becomes what we refer to as the Hybrid Cloud.

Key attributes (Private Cloud Storage)

Adoption Drivers:
Business drivers: Low cost, high security and control, rapid scalability, compliance and forensics
Technology enablers: New programming capabilities, cloud gateways
 
Adopters:
- Enterprises

Use Cases:  
- Application development
- Backup
- Archiving
- File sharing and collaboration
- Geo access

Key attributes (Public Cloud Storage)

Adoption Drivers:
Business drivers: low cost, rapid scalability, on-demand capacity, clouds become more pervasive
Technology enablers: new programming capabilities, cloud gateways generating multi-cloud usage

Adopters:
- SMBs/ SMEs
- Developers
- Consumers
- Enterprise evaluators

Use Cases:  
- Testing and application development
- SaaS (Consumer & SME/SMB users: Backup, file sharing, additional device storage, rich media)
- Personal cloud storage with access clients
- Backup and archiving using cloud gateway
- Special use cases enabled by cloud gateway
- File server replacement
- Availability of CIFS/NFS access within the data center

Differentiators:
- SLA variability
- Pricing elements
- Scalability and performance
- Access options
- Multiple clouds vs. single cloud

Key attributes (Hybrid Cloud Storage - a mix of Public and Private Cloud Storage)

Adoption Drivers:
Business drivers: lowered average cost obtained via a mix of public/private cloud, reduction of DR/BC costs, optimized mix of capex and opex
Technology enablers: improved security

Adopters:
- Enterprises

Use Cases:  
-  Incorporates use cases for private and public clouds

Differentiators:
-  SLA variability
-  Pricing elements
-  Scalability and performance
-  Access options
-  Multiple cloud vs. single cloud

PHASE FOUR: Federated Cloud Storage

Description: With the advent of greater security, flexibility and interactivity, users will demand applications that provide real time dynamic interaction within their supply chain. Regardless of where their data may reside, partners, customers, employees and consumers will want a seamless, transparent access capability. Enter the Federated Cloud. Through a common management layer, Federated cloud will connect private and public clouds exposing all storage as a single name space. Through federated identity management and creation of trust relationships amongst various vendors and enterprises, authorized users (human or programmatic) will be able to authenticate to their cloud and be able to access information that resides anywhere across the globe. Excess capacity will be easily pushed over a grid and be sold and consumed as a true utility. Ultra-high utilization rates will be achieved, and within the trust circle security and compliance requirements will be defined and met. Interoperability will be ensured by continued maturity and standardization of APIs and applications.

This truly will culminate in a meaningful internet of knowledge and commerce.  The "Semantic Web" has arrived!  Note that, for matters of very high security, agencies and enterprises will continue to use private clouds.

Key attributes (Federated Cloud Storage)

Adoption Drivers:
Business drivers: need for real time dynamic interaction with partners/customers on different clouds, ability to sell excess capacity within the trust circle, optimized infrastructure utilization, establishment of trust relationships
Technology drivers: federated authentication and provisioning across clouds, streamlined cross-cloud management, standardized APIs  
'
Adopters:
- Service providers
- SMEs/SMBs
- Consumers
- Enterprises

Use Cases:  
- Supply chain management
- Ad-hoc capacity capacity enhancement
- Non-sensitive and sensitive data hosting

Differentiators:
- SLA variability
- Pricing elements
- Scalability and performance
- Access options
- Security
- Governance and regulation compliance

Based upon our experience in the marketplace, a large majority of the organizations are still in the first two phases. There is an undeniable appetite by the early adopters to be at the forefront, however, unlike many other emergent technologies, cloud storage comes equipped with a very compelling economic model and that is really helping justify the move into the cloud.

There are relatively few options for early adopters to implement private clouds that deliver the appropriate capabilities.  This is why Mezeo focused on a deployable platform versus only offering cloud storage as a service.  With the deployable platform, enterprises can implement their own in house cloud, and also take advantage of a "private" cloud hosted on their behalf at a service provider.  See my discussion of this topic in my post: Cloud Storage for the Enterprise - Part 2: The Hybrid Cloud

In summary, those of us who hail from the IT service provider industry are very comfortable with cloud storage.  We see the adoption as proceeding, and the issues are being knocked off as they arise.  We are in an early technology cycle but with innovative early adopters we see a bright future.

According to a recent Gartner press release, 20% of businesses will own no IT assets by 2012:

Several interrelated trends are driving the movement toward decreased IT hardware assets, such as virtualization, cloud-enabled services, and employees running personal desktops and notebook systems on corporate networks.

The need for computing hardware, either in a data center or on an employee’s desk, will not go away. However, if the ownership of hardware shifts to third parties, then there will be major shifts throughout every facet of the IT hardware industry. For example, enterprise IT budgets will either be shrunk or reallocated to more-strategic projects; enterprise IT staff will either be reduced or reskilled to meet new requirements, and/or hardware distribution will have to change radically to meet the requirements of the new IT hardware buying points.

This is a bold statement. If we believe Gartner, it means that we are at the beginning of an explosion in cloud-based services managed by trusted providers on behalf of the enterprise. Of course not all businesses will choose this path, but a substantial number of industries can and will. As I blogged about earlier, the message from the CFO office is clear. We will see adoption rates rise dramatically as the benefits of cloud services become more obvious to business leaders.

A second point of interest is the prediction that by 2012, India-centric IT services companies will represent 20 percent of the leading cloud aggregators in the market (through cloud service offerings).

Here’s the take-away:

Gartner is seeing India-centric IT services companies leveraging established market positions and levels of trust to explore nonlinear revenue growth models (which are not directly correlated to labor-based growth) and working on interesting research and development (R&D) efforts, especially in the area of cloud computing. The collective work from India-centric vendors represents an important segment of the market’s cloud aggregators, which will offer cloud-enabled outsourcing options (also known as cloud services).

We are witnessing examples of what GE innovation consultant Vijay Govindarajan calls reverse innovation in IT. Natarajan Chandrasekaran, the CEO of Tata Consultancy Services notes:

I’ve seen the new cloud-based computing models for applications and processes gaining currency in emerging markets. Rural cooperative banks and small and medium businesses in India are actually far ahead of their western counterparts in adopting these models. In fact, companies from emerging markets, buoyed by strong domestic revenues and revival in growth, have been making adjustments to their global strategies and fine-tuning their investments in order to be part of the recovery process in the west and build on their global expansion plans.

As the enterprise embraces the cloud, they’ll need a maturity model to help them on their journey. My next post will explore what the maturity model for cloud storage looks like. 

The Parallels Summit has been very successful for Mezeo, with excellent booth traffic, a number of leads and we still have this afternoon to go. Our business development and partner discussions have also been productive.

Why blog about this? Because this is representative of two secular trends in the hosting industry. First, the industry is maturing, the business issues are more compelling and the opportunities and the vendors are more serious and engaged. Second, the interest in the cloud and cloud storage is at an all time high. It’s really that simple and that visible.

A recent report by Forrester's Andrew Reichman titled Business Users Are Not Ready For Cloud Storage: Current And Planned Adoption Of Storage-As-A-Service Is Minimal For Now paints a picture for cloud storage adoption, that at first blush, is not encouraging.

He states:

In Forrester's Enterprise And SMB Hardware Survey, North America And Europe, Q3 2009 survey, we asked businesses about their interest in "hosted storage capacity" offerings. Interest was minimal at best. Forty-three percent of all respondents said that they were simply not interested, and another 43% said that they were interested but had no plans to move forward.

While it could be argued that as a cloud storage supplier, I am necessarily bullish about the ultimate prospects, I believe the data is actually quite good and clearly represents what we are experiencing in the marketplace.  Now, Mezeo is engaged with many service providers, as well as the early adopters in the enterprise space as they begin their evaluations.

When I look at enterprise cloud-storage adoption based on Everett Rogers' diffusion curve I see a pretty clear view of the typical market place approach to adoption of disruptive technologies:    

For new, emerging, and potentially disruptive technologies, we should look for what the next practices are, i.e. the practices of the innovators and early adopters. The survey reflects the typical technology adoption cycle and re enforces what we are experiencing in the market place.

11% of companies are taking the plunge - these are the early adopters and innovators.  The early majority (43%) is interested, and watching.  The late majority is not in the game, yet.

So we are on track. And to prove it, let's look at one of these enterprise-level innovators: General Electric.

According to IBM storage expert Tony Pearson, GE has implemented cloud-based backups and archive for GE Corp, NBC Universal and GE Asset Management divisions running at only 32 cents per GB/month, representing a 40-60 percent savings over their previous methods. This includes backups of their external Web sites, archives of their digital and production assets, RMAN backups including development/staging databases. They plan to add out-of-region compliance archive in 2010. They also plan to monetize their intellectual property by offering "CloudStorage Manager" as a software offering for others.

A lot has been written about the reluctance of many to use the cloud for their mission critical applications, and in particular, the enterprise.  While this may be a popular topic from the perspective of many, the Cloud is most certainly seeing a significant increase in adoption as more and more companies build their SaaS offerings on platforms from Amazon, Google, Force.com and Microsoft.

Platform as a service (PaaS) is defined in Wikipedia as "the delivery of a computing platform and solution stack as a service. It facilitates deployment of applications without the cost and complexity of buying and managing the underlying hardware and software layers, providing all of the facilities required to support the complete life cycle of building and delivering web applications and services entirely available from the Internet--with no software downloads or installation for developers, IT managers or end-users. It's also known as cloudware."

In general, PaaS offerings include workflow facilities for application design, application development, testing, deployment and hosting as well as application services such as team collaboration, web service integration and marshalling, database integration, security, scalability, storage, persistence, state management, application versioning, application instrumentation and developer community facilitation. These services are provisioned as an integrated solution over the web.

We just saw another Cloud validation as three established ISVs announced offerings on platfoms from PaaS providers.  Both BMC Software and CA announced their intent to offer apps built on Force.com next year. Quest Software also announced the launch of its first set of Software as a Service (SaaS) Windows management solutions on Microsoft Azure.

Note also the following examples of SaaS services built on AWS, Google AppEngine and Force.com.  This "explosion of entrepreneurship"  further the case that platform-as-a-service is rapidly gaining acceptance in the market.



What we are witnessing is a boom in platform-based businesses, made possible by the cloud model: pay-per-use, instant scalability, and the elimination of up-front capex costs.

We have built a free Cloud Storage Toolkit for Service Providers to help them answer the question: “Should we enter the Cloud Storage marketspace?”

The toolkit includes a tutorial and a spreadsheet - both of which are accessible immediately when you sign up for our Cloud Storage Strategy newsletter.

THE TUTORIAL is a 15 page document which shows you how to use the Cloud Storage: A Business Model for Service Providers spreadsheet. It explains each of the 15 variables which make up the model, step-by-step.

[15-variable spreadsheet model]

THE SPREADSHEET is a customizable spreadsheet which takes in your input and is made up of three distinct parts: Inputs, Results, and Graphs.

You will input your individualized business model cost drivers which will in turn calculate your revenue generators.

The business model also calculates and graphs your gross margin, cumulative cash flows, and plots your monthly recurring revenue against your monthly gross margin.

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The announcement that Salesforce is integrating directly with cloud-storage Box.net is the tip of the iceberg when it comes to the future of the cloud:

Techcrunch explains what Box.net is thinking:

CEO Aaron Levie says that this is the first step in Box.net's plan to give businesses a secure way to share their files across multiple services on the web. He says that many of the cloud services geared toward the enterprise don't work well together -- oftentimes you'll have to reupload the same content to multiple sites to share or edit it. Box.net wants to help unify these services by serving as the central hub for your uploaded files, which you can then access from these other web-based services. Levie hints that we'll be seeing more integrations with other services in the near future.

What we are witnessing is the future of enterprise IT infrastructure. We have been talking about programmatic access through RESTful APIs for some time now.  This move by Saleforce is an evolutionary step in how enterprise IT will manage its IT infrastructure - it will be a cross-cloud platform, with applications and open access to the storage cloud of your choice.

Security is not an issue, and the future is about cross-cloud collaboration.

Phil Wainewright says that Box.net wants to be the "Switzerland of Data" - he's right and wrong.  Cloud Storage, provided by the various service providers are going to be the "switzerland of data storage."  Vendor lock-in is going by the wayside.

ReadWrite is spot on when they say that "you can start to see how platforms will evolve into service networks - where enterprise users may subscribe and get access to applications that they pay for on a per use basis."

The biggest threat then, is to traditional software vendors, and applications like Sharepoint.  We will see heated debates on this very topic in the days and weeks ahead.

The phrase “razor sharp focus” is a tired cliché in our field, but you have to hand it to Google. They have just announced a “two-click data migration tool which allows employees to easily copy existing data from Exchange or Outlook into Google Apps.”

By building a tool to make this migration a “point-and-click” experience, they are hastening the defection rate for businesses looking for an alternative to Microsoft’s office suite. What’s more, three service providers - NuVox, Netfirms and IKANO - have already begun offering this tool to their customer base.

Google Apps Sync, as the migration tool is called, has already been put to use at enterprises like Genentech and Avago. Here’s some compelling Google propaganda:

It’s a case-study in business model disruption. The cost? One-sixth the price of Microsoft.

Of course we’re still in the “early days” and the jury is still out. Microsoft will surely counter with Azure, but you can see why Ray Ozzie is worried.

For Google, on the other hand, the state of cloud computing is promising. They claim around 1.75 million companies are running Google Apps. The enterprise, as Gray noted earlier, is ready for Cloud Computing. And why is this?  We’ve mentioned the economics before, but here is Google’s take on the benefits of Cloud Computing.