Daily Archives: January 7, 2011
Why cloud IaaS customers care about a colo option
Ben Kepes has raised some perceived issues on the recent Cloud IaaS and Web Hosting Magic Quadrant, on his blog and on Quora. It seems to reflect some confusion that I want to address in public.
Ben seems to think that the Magic Quadrant mixes colocation and cloud IaaS. It doesn’t, not in the least, which is why it doesn’t include plain ol’ colo vendors. However, we always note if a cloud IaaS vendor does not have colocation available, or if they have colo but don’t have a way to cross-connect between equipment in the colo and their cloud.
The reason for this is that a substantial number of our clients need hybrid solutions. They’ve got a server or piece of equipment that can’t be put in the cloud. The most common scenario for this is that many people have big Oracle databases that need big-iron dedicated servers, which they stick in colo (or in managed hosting), and then cross-connect to the Web front-ends and app servers that sit in the cloud. However, there are other examples; for instance, our e-commerce clients sometimes have encryption “black boxes” that only come as hardware, so sit in colo while everything else is in the cloud. Also, we have a ton of clients who will put the bulk of their stuff into the colo — and then augment it with cloud capacity, either as burst capacity for their apps in colo, or for lighter-weight apps that they’re moving into the cloud but which still need fast, direct, secure communication with interrelated back-end systems.
We don’t care in the slightest whether a cloud provider actually owns their own data center, directly provides colocation, has any strategic interest in colocation, or even offers colocation as a formal product. We don’t even care about the quality of the colocation. What we care about is that they have a solution for customers with those hybrid needs. For instance, if Amazon were to go out and partner with Equinix, say, and customers could go colo in the same Equinix data center as Amazon and cross-connect directly into Amazon? Score. Or, for instance, Joyent doesn’t formally offer colocation — but if you need to colocate a piece of gear to complement your cloud solution, they’ll do it. This is purely a question of functionality.
Now, you can argue that plenty of people manage to use pure-play cloud without having anything that they can’t put in the cloud, and that’s true. But it becomes much less of a typical scenario the more you move away from forward-thinking Web-native companies, and towards the mixed application portfolios of mainstream business. It’s especially true among our mid-market clients, who are keenly interested in gradually migrating to cloud as their primary approach to infrastructure, hybrid models are critical to the migration path.
The impurity of cloud
I’ve already agreed that people would find it useful to see a Magic Quadrant that is focused solely on a particular segment of the market — “pure” cloud IaaS. That’s why we’re going to be doing one in the middle of this year, as I noted previously. It’s also why our upcoming Critical Capabilities note, which focuses solely on product features, is cloud-only. (A Magic Quadrant, on the other hand, is about overall markets, which means we factor in sales, marketing, etc. — it’s not about fitness for use, whereas the Critical Capabilities are.)
However, I still think it’s important to understand the inherent messiness of this market, which is why we currently have an MQ that covers not just cloud IaaS, but also the hosting market.
I’ve previously talked about how customers have different levels of desire for managed services with the cloud. In that blog post, I also touched on the difference between trying to source cloud for a single important application (or a tightly-related group of apps), and sourcing cloud for a bunch of multiple less-critical applications.
Customers who are trying to source cloud for a single important application are essentially looking at hosting; the cloud is offering them on-demand, elastic resources. That’s why cloud has impacted the hosting industry so strongly — people want the flexibility and agility, but it doesn’t change the fact that they have traditional hosting requirements. As always with hosting, customers run the gamut from those who just want infrastructure, to those who want it fully managed. Customers often don’t know what they want, either, as I described in a blog post a while back, called, “I’m thinking about using Amazon, IBM, or Rackspace…” — which is how you get a weird mix of vendors in an RFP, as a customer tries to explore the possibilities available to them.
Customers who are trying to source cloud for multiple, less-important applications — essentially, the first steps towards replacing a traditional data center with a cloud IaaS solution — have different needs. Their requirements are distinct, but many of the provider capabilities that are useful for hosting are also useful for delivering these solutions, which is why so many Web hosters have expanded into this market.
You can cross “single app or multiple app?” with “what level of managed services?” to derive a set of distinct market segments — in fact, I’m in the midst of writing a research note on market segmentation that does exactly that. I believe it’s still all one market, and that most providers will end up serving multiple segments of that market. I believe that all of those segments are important, not just the ones closest to the cloud pure-play model.
I think, as an analyst, that it can be tempting to follow only the most compelling, fast-growing, quickest-evolving pieces of a market — to get caught up in the excitement, so to speak. My IT buyer clients force me to be balanced, though, because they care about a lot more than just what’s hot. Clearly, right now, they need more help sourcing in specific segments, which is why we’re doing some narrower vendor ratings focused on a more “pure cloud” tilt — but that shouldn’t be taken as an indication that the other segments aren’t important.
Getting there from here
Let me start by saying that I have drunk the cloud Kool-Aid. I am a believer in its transformative power, and in the business models that it is enabling. I believe that the IT world will look very different in 10 years, and the 5-year differences will be noticeable. I believe in the success stories of the fresh young cloud-native companies.
But I also believe that you’ve got to get there from here. While I have the privilege of working with many smaller technology companies, including cloud-based start-ups, the vast majority of Gartner’s clients are mid-sized businesses and enterprises. Those clients have a vast array of existing IT investments, in both infrastructure and applications, as well as people, process, policies, and the like. Most of our clients are excited by the possibilities that the cloud is offering, and they’re interested in adopting all of it — SaaS, PaaS, IaaS. But they’ve got to figure out how to do it, how to make a sensible, risk-controlled move from what they’ve got today, including, importantly, the mindset and culture of what they have today, to the cloud future.
Our clients are looking for solutions to business needs. Many of them are also explicitly looking for an opportunity to use cloud for the sake of using cloud — to get their feet wet, to learn things, to satisfy the demands of a CEO or CFO, and so forth. As an analyst, my goal is to help my clients find solutions that they’ll be successful with. That’s not just purely about technology; I need to help clients find solutions that also work for their culture, their appetite for risk, their ability to manage change, the way they budget, the way they approach operations and applications and governance, the way they source solutions and manage vendors, their available personnel and their ability to learn new things, their timeframes and business needs, and so forth.
IT buyers are slowly transforming the way they think about cloud, as hype begins to give way to reality. We see people doing very sensible, pragmatic things with cloud IaaS, these days. For most organizations, it will be a five to ten year gradual transformation. The successful blending of old and new models, and the transitional models, are both critical parts to that transformation.
I think my feeling on these things is: Get excited, but don’t get excitable. Most of my research is pitched to people making decisions right now, which is typically about IT buyer immediate needs, and vendor one-year and two-year plans. With cloud, I often look at three-year and five-year scenarios, and we’re doing some ten-year scenarios as well, but that also involves having to think about the sequence and timeline for how things occur in the market.
Fast-evolving markets create and destroy new approaches, and there will always be transitional approaches, artifacts of “what tech is available at this stage” and “what customer mindset exists at this point”. The desires of customers at any given point should not necessarily be taken as the future direction of the market and what will lead to vendor success (or even customer success, ironically). Frankly, some of the things customers will ask for during the transition will be flat-out wacky and wrong. But it won’t change the fact that they want them.
CloudPundit: Massive-Scale Computing 