Blog Archives
Getting on an analyst’s radar screen
I’ve been spending about a quarter of my time in the Bay Area for the better part of this year, a lot of my vendor-facing time has been with start-ups, and I spent much of my HostingCon time with start-ups whose executives have never interacted with analysts in the past, so a couple of FAQs are top of mind at the moment.
Emerging technology companies often ask me, “How do I get on your radar screen?” and sometimes, “How do I get you to write about our company?” (Venture capitalists often ask the same questions on behalf of their portfolio companies, too.)
I wrote a post about making a briefing request before; if you haven’t read it, I’d encourage you to do so, before continuing on with this post. So let’s assume that you’ve gone and asked for a briefing, and now you’re wondering what you should be doing to use that time to make a convincing case for why an analyst should continue to follow you.
Gartner analysts, as a matter of policy, do not take client relationships into account when deciding whether or not to follow a company. We choose which briefing requests we do or don’t take, and which companies we write about, solely based on whether or not we and our clients find a company to be of interest. If you’re a vendor client, you are always entitled to make an inquiry, tell us about your business, and ask specific questions — i.e., whether or not we find you worthy of covering in general, we are required to fulfill such requests — but it doesn’t get you any other special privileges with regard to coverage.
So, what makes a vendor interesting?
Client interest. If our end-user (IT buyer) clients are calling and asking about you, we want to know as much about you as possible, so that we can intelligently answer questions. If competitors and investors are calling and asking about you, ditto.
Unique vision or technology. If you’re doing something cool and different, either in implementation or the way you’re thinking about the market, that’s always of interest to us. We’re always interested in market mavericks, as well as people along the bleeding edge who might be tomorrow’s market leaders. We’re also hugely interested in blue-ocean companies, doing something that nobody else is.
Meaningful differentiation. Even if you’re not doing something that’s really unique, you should be able to articulate the things that meaningfully differentiate you from the competition, both in terms of where you see your company going, and the actual features and roadmap of your product or service.
Rapid growth. Evidence of market traction in terms of customer wins, especially enterprise customer wins, and fast revenue growth, is an indicator that we need to pay attention to you, because you’re clearly growing in importance. We like metrics, by the way. Knowing how many customers you have, how much you’ve grown recently, and the ballpark of your revenues, lets us know where you are adoption-wise.
Management team track record. If we know your management team from previous successes, we are much more likely to believe that your new venture will succeed, and will exhibit interest accordingly. (Also, if we have a prior relationship with you, our interest in interacting is likely to carry across between the companies you work for.) First-rate investors help, too; they’re usually a sign that some very smart people think you have a clue.
In short, your goal, if you’d like me to cover you, is to try to convince me that I need to know about you, because you’re going to be successful, my clients are going to want to know about you, and you’re going to be doing something interesting that’s worth my time to learn about. In other words, convince me that spending time researching you is not a waste — that I won’t be filling my brain with information that won’t translate to eventual client value.
Recent research notes
Here’s a round-up of what I’ve written lately, for those of you that are Gartner clients and are following my research:
Data Center Managed Services: Regional Differences in the Move Toward the Cloud is about how the IaaS market will evolve differently in each of the major regions of the world. We’re seeing significant adoption differences between the United States, Western Europe (and Canada follows the WEU pattern), and Asia, both in terms of buyer desires and service provider evolution.
Web Hosting and Cloud Infrastructure Prices, North America, 2010 is my regular update to the state of the hosting and cloud IaaS markets, targeted at end-users (IT buyers).
Content Delivery Network Services and Pricing, 2010 is my regular update of end-user (buyer) advice, providing a brief overview of the current state of the market.
Is a Cloud Content Delivery Network Right for You? is a look at Amazon CloudFront and the other emerging “cloud CDN” services (Rackspace/Limelight, GoGrid/EdgeCast, Microsoft’s CDN for Azure, etc.). It’s a hot topic of inquiry at the moment (interestingly, mostly among Akamai customers hoping to reduce their costs).
Some of my colleagues have also recently published notes that might be of interest to those of you who follow my research. Those notes include:
- Andrea di Maio’s Criteria for Government to Evaluate Cloud Computing
- PaaS analysts collaborating on VMware and Salesforce.com: The Beginning of a Beautiful Friendship?
- Adam Couture and Stan Zaffos’s SNIA Launches First Cloud Storage Standard
- Matt Cain’s Make or Break Time for Microsoft Cloud E-Mail
Who’s Who in CDN
I’m currently working on writing a research note called “Who’s Who in Content Delivery Networks“. The CDN space isn’t quite large enough yet to justify one of Gartner’s formal rating methodologies (the Magic Quadrant or MarketScope), but with the proliferation of vendors who can credibly serve enterprise customers, the market deserves a vendor note.
The format of a Who’s Who looks a lot like our Cool Vendors format — company name, headquarters location, website, a brief blurb about who they are and what they do, and a recommendation for what to use them for. I like to keep my vendor write-up formats pretty consistent, so each CDN has a comment about its size (and length of time in the business and funding source, if relevant), its footprint, services offered, whether there’s an application acceleration solution and if so what the technology approach to that is, pricing tier (premium-priced, competitive, etc.), and general strategy.
Right now, I’m writing up the ten vendors that are most commonly considered by enterprise buyers of CDN, and then planning to add some quick bullet-points of other vendors in the ecosystem but who aren’t CDNs themselves (equipment vendors, enterprise internal CDN alternatives, etc.), probably more in a ‘here are some vendor names’ with no blurbs, fashon.
For those of you who follow my research, I’m also about to publish my yearly update of the CDN market that’s targeted at our IT buyer clients (i.e., how to choose a vendor and what the pricing is like), along with another note on the emergence of cloud CDNs (to answer a very common inquiry, which is, “Can I replace my Akamai services with Amazon?”).
Q1 2010 inquiry in review
My professional life has gotten even busier — something that I thought was impossible, until I saw how far out my inquiry calendar was being booked. As usual, my blogging has suffered for it, as has my writing output in general. Nearly all of my writing now seems to be done in airports, while waiting for flights.
The things that clients are asking me about has changed in a big way since my Q4 2009 commentary, although this is partially due to an effort to shift some of my workload to other analysts on my team, so I can focus on the stuff that’s cutting edge rather than routine. I’ve been trying to shed as much of the routine colocation and data center leasing inquiry onto other analysts as possible, for instance; reviewing space-and-power contracts isn’t exactly rocket science, and I can get the trends information I need without needing to look at a zillion individual contracts.
Probably the biggest surprise of the quarter is how intensively my CDN inquiry has ramped up. It’s Akamai and more Akamai, for the most part — renewals, new contracts, and almost always, competitive bids. With aggressive new pricing across the board, a willingness to negotiate (and an often-confusing contract structure), and serious prospecting for new business, Akamai is generating a volume of CDN inquiry for me that I’ve never seen before, and I talk to a lot of customers in general. Limelight is in nearly all of these bids, too, by the way, and the competition in general has been very interesting — particularly AT&T. Given Gartner’s client base, my CDN inquiry is highly diversified; I see a tremendous amount of e-commerce, enterprise application acceleration, electronic software delivery and whatnot, in addition to video deals. (I’ve seen as many as 15 CDN deals in a week, lately.)
The application acceleration market in general is seeing some new innovations, especially on the software end (check out vendors like Aptimize), and there will be more ADN offers will be launched by the major CDN vendors this year. The question of, “Do you really need an ADN, or can you get enough speed with hardware and/or software?” is certainly a key one right now, due to the big delta in price between pure content offload and dynamic acceleration.
By the way, if you have not seen Akamai CEO Paul Sagan’s “Leading through Adversity” talk given at MIT Sloan, you might find it interesting — it’s his personal perspective on the company’s history. (His speech starts around the 5:30 mark, and is followed by open Q&A, although unfortunately the audio cuts out in one of the most interesting bits.)
Most of the rest of my inquiry time is focused around cloud computing inquiries, primarily of a general strategic sort, but also with plenty of near-term adoption of IaaS. Traditional pure-dedicated hosting inquiry, as I mentioned in my last round-up, is pretty much dead — just about every deal has some virtualized utility component, and when it doesn’t, the vendor has to offer some kind of flexible pricing arrangement. Unusually, I’m beginning to take more and more inquiry from traditional data center outsourcing clients who are now looking at shifting their sourcing model. And we’re seeing some sharp regional trends in the evolution of the cloud market that are the subject of an upcoming research note.
And so it begins
We’re about to start the process for the next Magic Quadrant for Cloud Infrastructure Services and Web Hosting, along with the Critical Capabilities for Cloud Infrastructure Services (titles tentative and very much subject to change). Our hope is to publish in late July. These documents are typically a multi-month ordeal of vendor cat-herding; the evaluations themselves tend to be pretty quick, but getting all the briefings scheduled, references called, and paperwork done tends to eat up an inordinate amount of time. (This time, I’ve begged one of our admin assistants for help.)
What’s the difference? The MQ positions vendors in an overall broad market. CC, on the other hand, rates individual vendor products on how well they meet the requirements for a set of defined use cases. You get use-case by use-case ratings, which means that this year we’ll be doing things like “how well do these specific self-managed cloud offerings support a particular type of test-and-development environment need”. The MQ tends to favor vendors who do a broad set of things well; a CC rating, on the other hand, is essentially a narrow, specific evaluation based on specific requirements, and a product’s current ability to meet those needs (and therefore tends to favor vendors that have great product features).
Also, we’ve decided the CC note is going to be strictly focused on self-managed cloud — Amazon EC2 and its competitors, Terremark Enterprise Cloud and its competitors, and so on. This is a fairly pure features-and-functionality thing, in other words.
Anyone thinking about participation should check out my past posts on Magic Quadrants.
The last quarter in review
The end of 2009 was extraordinarily busy, and that’s meant that, shamefully, I haven’t posted to my blog in ages. I aim to try to return to near-daily posting in 2010, but this means creating time in my schedule to think and research and write, rather than being entirely consumed by client inquiry.
December was Gartner’s data center conference, where I spent most of a week in back-to-back meetings, punctuated by a cloud computing end-user roundtable, a cloud computing town hall, and my talk on getting data center space. Attendance at the conference is skewed heavily towards large enterprises, but one of the most fascinating bits that emerged out of the week was the number of people walking around with emails from their CEO saying that they had to investigate this cloud computing thing, and whose major goals for the conference included figuring out how the heck they were going to reply to that email.
My cloud computing webinar is now available for replay — it’s a lightweight introduction to the subject. Ironically, when I started working at Gartner, I was terrified of public speaking, and much more comfortable doing talks over the phone. Now, I’m used to having live audiences and public speaking is just another routine day on the job… but speaking into the dead silence of an ATC is a little unnerving. (I once spent ten minutes giving a presentation to dead air, not realizing that the phone bridge had gone dead.) There were tons of great questions asked by the audience, far more than could possibly be answered in the Q&A time, but I’m taking the input and using it to figure out how to decide what I should be writing this year.
Q4 2009, by and large, continued my Q3 inquiry trends. Tons of colocation inquiries — but colocation is often giving way to leasing, now, and local/regional players are prominent in nearly every deal (and winning a lot of the deals). Relatively quiet on the CDN front, but this has to be put in context — Gartner’s analysts took over 1300 inquiries on enterprise video during 2009, and these days I’m pretty likely to look at a client’s needs and tell them they need someone like Kontiki or Ignite, not a traditional Internet CDN. And cloud, cloud, cloud is very much on everyone’s radar screen, with Asia suddenly becoming hot. Traditional dedicated hosting is dying at a remarkable pace; it’s unusual to see new deals that aren’t virtualized.
I’ll be writing on all this and more in the new year.
Hype cycles
I’ve recently contributed to a couple of our hype cycles.
Gartner’s very first Hype Cycle for Cloud Computing features a whole array of cloud-related technologies and services. One of the most interesting things about this hype cycle, I think, is the sheer number of concepts that we believe will hit the plateau of productivity in just two to five years. For a nascent technology, that’s pretty significant — we’re talking about a significant fundamental shift in the way that IT is delivered, in a very short time frame. However, a lot of the concepts in this hype cycle haven’t yet hit the peak of inflated expectations — you can expect plenty more hype to be coming your way. There’s a good chance that for the IaaS elements that I focus on, the crash down into the trough of disillusionment will be fairly brief and shallow, but I don’t think it can be avoided. Indeed, I can already tell you tales of clients who got caught up in the overhype and got themselves into trouble. But the “try it and see” aspect of cloud IaaS means that expectations and reality can get a much faster re-alignment than it can if you’re, say, spending a year deploying a new technology in your data center. With the cloud, you’re never far from actually being able to try something and see if it fits your needs.
My hype cycle profile for CDNs appears on our Media Industry Content hype cycle, as well as our brand-new TV-focused (digital distribution and monetization of video) Media Broadcasting hype cycle. Due to the deep volume discounts media companies receive from CDNs, the value proposition is and will remain highly compelling, although I do hear plenty of rumblings about both the desire to use excess origin capacity as well as the possibilities that the cloud offers for both delivery and media archival.
I was involved in, but am not a profile author on, the Hype Cycle for Data Center Power and Cooling Technologies. If you are a data center engineering geek, you’ll probably find it to be quite interesting. Ironically, in the midst of all this new technology, a lot of data center architecture and engineering companies still want to build data centers the way they always have — known designs, known costs, little risk to them… only you lose when that happens. (Colocation companies, who have to own and operate these data centers for the long haul, may be more innovative, but not always, especially since many of them don’t design and build themselves, relying on outside expertise for that.)
Cloud IaaS adoption survey
My colleagues and I are planning to field a survey about cloud computing adoption (specifically, infrastructure as a service), both to assess current attitudes towards cloud IaaS as well as ask people about their adoption plans. The target respondents for the survey will be IT buyers.
We have some questions that we know we want to ask (and that we know our clients, both end-users and vendors, are curious about), and some hypotheses that we want to test, but I’ll ask in this open forum, in an effort to try to ensure the survey is maximally useful: What are the cloud-adoption survey questions whose answers would cause you to change your cloud-related decision-making? (You can reply in a comment, send me email, or Twitter @cloudpundit.)
I expect survey data will help vendors alter their tactical priorities and may alter their strategic plans, and it may assist IT buyers in figuring out where they are relative to the “mainstream” plans (useful when talking to cautious business leadership worried about this newfangled cloud thing).
Somewhat peripherally: Following up on earlier confusion, a potshot was taken at the popularity of surveys at large analyst firms. I’ll note that I’m very much a fan of surveys, and if I had infinite budget to work with, I’d probably field a lot more of them. Surveys are (hopefully) not just blind firing of questions into the populace. Intelligent survey design is an art form (as is proper fielding of a survey). Asking the right questions — forming testable hypotheses whose implications are actionable by clients, and getting good information density out of the questions you ask (looking for patterns in the correlations, not just the individual answers) — is incredibly important if you’re going to get something maximally useful out of the money you spent. Data analysis can drive insights that you wouldn’t have otherwise been able to obtain and/or prove.
The Magic Quadrant, Amazon, and confusion
Despite my previous clarifying commentary on the Magic Quadrant for Web Hosting and Cloud Infrastructure Services (On Demand), posted when the MQ was published, and the text of the MQ itself, there continues to be confusion around the positioning of the vendors in the MQ. This is an attempt to clarify, in brief.
This MQ is not a pure cloud computing MQ. It is a hosting MQ. Titling it as such, and making it such, is not some feeble attempt to defend the traditional way of doing things. It is designed to help Gartner’s clients select a Web hoster, and it’s focused upon the things that enterprises care about. Today, our clients consider cloud players as well as traditional players during the selection process. Cloud has been highly disruptive to the hosting industry, introducing a pile of new entrants, revitalizing minor players and lifting them to a new level, and forcing successful traditional players to revise their approach to the business.
The most common question asked by outsiders who just look at the chart and nothing more is, “Why doesn’t Amazon score higher on vision and execution?”
The answer, simply, is that the hosting MQ scores five use cases — self-managed hosting, mainstream (low/mid-end) managed hosting, highly complex managed hosting, global solutions portfolio (ability to provide multiple types of service packages at multiple price points, globally, for very large multi-nationals seeking global hosting options), and enterprise applications hosting. The final rating is a weighted composite of these scores. Amazon scores extremely highly on self-managed hosting, but has a much more limited ability to support the other four scenarios.
Amazon lacks many capabilities that are important in the overall Web hosting market, like managed services, the ability to mix in dedicated equipment (important to anyone who wants to run things that don’t virtualize well, like large-scale Oracle databases, as well as colocate “black box” hardware appliances, like those used for transaction functions for some e-commerce sites), the ability to isolate the environment from the Internet and just use private network connectivity, etc. Their lack of these capabilities hurts their scores. (Note that some capabilities that were missing may have been disclosed to us as part of Amazon’s roadmap, which augmented their Vision score positively, but similarly, stances taken that would definitively shut out some features would be penalized.)
Clearly, we don’t think that Amazon sucks as a cloud provider; it’s just that they don’t play as broadly in the hosting space as the best of the traditional players, although they are certainly a competitor against the traditional players, and a disruptive entrant in general.
The same could be said for many of Amazon’s cloud competitors, although those with some background in traditional hosting may have fewer product-portfolio gaps. Original innovation is a component of Vision but it’s only part of the overall Vision score, so being a fast follower only hurts you so much.
We recognize the need for a “pure cloud compute” vendor rating, and have one in the works.
Cloud computing adoption surveys
A recent Forrester survey apparently indicates that that one out of four large companies plan to use an external provider soon, or have already done so. (The Cloud Storage Strategy blog has a good round-up linking to the original report, a summary of the key points, and various commentators.)
Various pundits are apparently surprised by these results. I’m not. I haven’t been able to obtain a copy of the Forrester report, but from the comments I’ve read, it appears that software as a service and hosting (part of infrastructure as a service) are included as part of the surveyed services. SaaS and IaaS are both well-established markets, with significant penetration across all segments of business, and interest in both IaaS and SaaS models has accelerated. We’ve wrapped the “cloud” label around some or all of these existing markets (how much gets encompassed depends on your definitions), so it shouldn’t come as a surprise to already see high adoption rates.
Gartner’s own survey on this topic has just been published. It’s titled, “User Survey Analysis: Economic Pressures Drive Cost-Oriented Outsourcing, Worldwide, 2008-2009“. Among its many components is a breakdown of current and planned use of alternative delivery models (which include things like SaaS and IT infrastructure utilities) over the next 24 months. We show even higher current and planned adoption numbers than Forrester, with IaaS leading the pack in terms of current and near-term adoption, and very healthy numbers for SaaS as well.
CloudPundit: Massive-Scale Computing 