Monthly Archives: September 2010

Rackspace AppMatcher and SaaS marketplaces

Rackspace has teased a preview page for a SaaS marketplace called AppMatcher. (It looks to be more of a front-page mock-up than anything actual; note that the “1,000 apps”, “100,000 businesses” bits look like placeholders.) The concept is pretty straightforward: app providers provide info about their target customer, and potential customers provide info about their company, and the marketplace tries to hook them up.

Hosting companies have increasingly been talking about doing marketplaces for their customers and their partner ecosystems, particularly in the SaaS space, and Rackspace’s foray is one of several that I know of that are still under wraps. Parallels has gotten into the act on the small business end, too, with the SaaS marketplace it’s integrated into its software. And a ton of other companies in the technology services space are also wanting to jump into the SaaS marketplace / exchange / brokerage business. (And you have folks like Etelos who build software to enable SaaS marketplaces.)

We’re seeing other software marketplaces in the cloud context, of course. For instance, there’s the increasing trend towards cloud IaaS providers offering an app store for rent-by-the-hour or otherwise cloud-license-friendly software — an excellent and important convenience, even necessity, for really driving cost savings for customers. And there are plenty of opportunities, including in the marketplace context, to add value as a broker.

However, I suspect that, by default, these days, if you have a need for software that does X, you go and attempt to enter X into Google, and pray that you’ve picked the right search term (or that the vendors have done reasonable SEO), in order to find software that does X. Anyone who wants to do a meaningful matching marketplace needs to be able to do better than this — which means that the listings in a marketplace need to be pretty comprehensive before it offers better results than Google. What a marketplace offers to the buyer, hopefully, is more nicely-encapsulated information than raw search results easily deliver.

However, many SaaS apps are narrow, “long tail” applications — almost more a handful of features that properly belong in a larger software suite, than they are properly full products unto themselves. That means that it’s harder to make sure that you really have wide and deep listings, and it means that useful community review gets more difficult because the app that’s got a handful of customers quite possibly doesn’t get any thoughtful reviews. And for many of the companies that are considering SaaS marketplace, the length of the long tail makes it difficult to have a meaningful partner model.

So what does Rackspace have that other, previous, attempts to launch general SaaS marketplaces have not? Money to do marketing. And at least thus far, the apparent willingness to not charge for the matching service. That might very well drive the kind of SaaS vendor sign-ups necessary to really make the marketplace meaningful to potential customers.

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More colo coverage

My colleague Alex Winogradoff (alex dot winogradoff at gartner dot com) has begun to pick up an increasing percentage of the colocation inquiry that myself and Ted Chamberlin have previously taken. Ted and I are both hugely busy (if you don’t know him, Ted is my co-author on the Magic Quadrant, and is our primary guy covering the purchase of network services), and Alex has been assigned to learn the data center market, which remains a hot topic among our clients.

Alex is interested in talking with a broad range of colocation and turnkey data center leasing vendors, since these are highly localized markets where we routinely see a mix of global, national, regional, and local players in any given deal that a buyer asks us to look at. Whether or not you’re a client, you can contact Alex and ask to brief him; I highly encourage you to do so if you are a vendor in this space serving typical Gartner clients (mid-sized business, enterprise, government, and technology vendors, primarily).

Alex has spent his career focused on carriers and other network operators. Since he’s relatively new to the data center market, this is a great opportunity to educate him about what you offer, and influence his thinking on the space, as he begins to shape his research agenda.

And for you industry-watchers: Retail colocation remains a relatively weak market this year, but wholesale colocation and data center leasing are certainly growing significantly, both in volume of deals and the degree to which they’re playing a major part in data center sourcing decisions.

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Amazon introduces “micro instances” on EC2

Amazon has introduced a new type of EC2 instance, called a Micro Instance. These start at $0.02/hour for Linux and $0.03/hour for Windows, come with 613 MB of allocated RAM, a low allocation of CPU, and a limited ability to burst CPU. They have no local storage by default, requiring you to boot from EBS.

613 MB is not a lot of RAM, since operating systems can be RAM pigs if you don’t pay attention to what you’re running in your baseline OS image. My guess is that people who are using micro instances are likely to want to use a JeOS stack if possible. I’d be suggesting FastScale as the tool for producing slimmed-down stacks, except they got bought out some months ago, and wrapped in with EMC Ionix into VMware’s vCenter Configuration Manager; I don’t know if they’ve got anything that builds EC2 stacks any longer.

Amazon has suggested that micro instances can be used for small tasks — monitoring, cron jobs, DNS, and other such things. To me, though, smaller instances are perfect for a lot of enterprise applications. Tons of enterprise apps are “paperwork apps” — fill in a form, kick off some process, be able to report on it later. They get very little traffic, and consolidating the myriad tertiary low-volume applications is one of the things that often drives the most attractive virtualization consolidation ratios. (People are reluctant to run multiple apps on a single OS instance, especially on Windows, due to stability issues, so being able to give each app its own VM is a popular solution.) I read micro instances as being part of Amazon’s play towards being more attractive to the enterprise, since tiny tertiary apps are a major use case for initial migration to the cloud. Smaller instances are also potentially attractive to the test/dev use case, though somewhat less so, since more speed can mean more efficient developers (fewer compiling excuses).

This is very price-competitive with the low end of Rackspace’s Cloud Servers ($0.015/hour for 256 MB and $0.03/hour for 512 MB RAM, Linux only). Rackspace wins on pure ease of use, if you’re just someone who needs a single virtual server, but Amazon’s much broader feature set is likely to win over those who are looking for more than a VPS on steroids. GoGrid has no competitive offering in this range. Terremark can be competitive in this space due to their ability to oversubscribe and do bursting, making its cloud very suitable for smaller-scale enterprise apps. And VirtuStream can also offer smaller allocations tailored to small-scale enterprise apps. So Amazon’s by no means alone in this segment — but it’s a positive move that rounds out their cloud offerings.

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