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From Interop 2012: Data Center Changes and the New IT

From Interop 2012: Data Center Changes and the New IT  

Carol Blanchar, M.S., CEO, Conexo

 

There are 3 pivot points around which Data Centers (DC’s) are transforming  their architecture and organization:

1.       Decreases in Data Center operational investment and  expense through virtualization

2.       More efficient  IT resource utilization from public cloud scale and multi-tenancy

3.       Increasing organizational success from Innovation  (Consumer productivity, Sustainable transformation)

 

The business case for IT services from large public clouds is overwhelming.  (There is a specific case to be made for a hybrid model where unique innovation and services are kept in-house as part of the core mission.  See Dell’s Interop Keynote, showing a cloud for pediatric genome services for cancer patients.)  A public cloud improves security, flexibility, risk management, investments, expenses,   and technology migration.  Most of all, it frees up internal IT staff to focus on innovation, productivity, and learning.  More about the economics from the Microsoft Azure director in his Keynote.

 

The network may be the key to programmatic control of policy governing availability and access in the Cloud.  Cisco, Juniper, and others are adding network services to  remove functional  and architectural siloes that destroy productivity and IT payback.  The goal is to  keep the data center neutral as to Operating Systems, Browsers, Data Storage, Devices, , and Media, including Video. 

 

The world has already begun to shift as servers  go virtual.  A public cloud provider will often begin with 100K servers, ordering 10K at a time, easily installing and moving as needed, with an administrator ratio of 1 for 200 servers.    Computing power, with demand pulled by devices becoming cheaper and available everywhere, will increase by orders of magnitude in the next 8 years, which means that  more  powerful hardware servers will still be sold year to year, but many times more, and even more powerful, virtual servers deployed at an increasing rate year-to-year.  Check out Intel’s Keynote presentation at Interop for a look at the expected growth in global capability and emerging uses.

 

Virtual servers combine with virtual storage to enable vast new  experiences and information exchanges between people. They are moving to become a single knowledge network that can allow the DC to function as a single ecosystem, or fabric.   One example – Juniper’s Q-Fabric, see their Interop Keynote presentation.

 

Another way to think of the cloud-based Data Center is as “DC as software”.  That is, as virtual, separated from the physical components.  The capability to make the components behave as one virtual machine is largely provided today by VMware, and their Interop presentation can help you understand where they are today, and where they are headed.

 

So we use the word “infrastructure” in a new way, not referring to a part of the stack or a physical data center .  A Cloud-based Data Center is a single infrastructure that delivers services through a complex layer of Apps.

 

“App” is a term taken from the word “application”, a new kind of application.  An App is software that delivers the services of the Data Center infrastructure for safe, effective, productive use.  From a virtual DC ecosystem, Apps deliver value to the consumer, return information to the organization, and enable rapid innovation and transformation.  Billing can be an App, as can storage provisioning, load balancing, business analytics, customer tracking, an operating system, or document management.  In a Cloud infrastructure, if it uses IT services to do work, it’s an App.

 

Current IT organizations find themselves buying infrastructure services, building their own policies, provisioning, and sets of Apps that not only make their own teams productive and effective, but can be made available to third parties with similar needs for their own use and App development.  A great example is Zynga and its Z-Cloud – watch the video of their Keynote address at Interop, and also the Google presentation on Docs and the emerging Google Drive.

 

So the Data Center move to the cloud is underway, as is the IT move to a focus on innovation, productivity and services for ongoing organizational transformation and sustainability.  “Change is the evolutionary process by which everything becomes something else.” (Sign at the Stevens Creek Nature Center marshland.)  This Information Technology change has been a long time coming, it is creating something entirely different, and it will never go back.

The Pivot from IT Cost to IT Value

The Pivot from IT Cost to IT Value

 

Cloud Technology can slash IT center costs and investment, first of all through virtualization and load balancing across system components, and then through a variety of on-demand services that monitor, administer, and even replace key elements of the IT infrastructure.

 

Even more,  Cloud solutions and services let IT move at the pace of business today, adding flexibility and rapid scalability which translate into value for the business line / profit center users who need face constant change, enabling the internal IT team to become mission-critical partners for sustainable success and a solid competitive advantage.

The Startup Business Model: A Need for Speed

The Startup Business Model:  A Need for Speed

 

The startup business model is not just used by standalone new business.  A small business trying to launch a second product uses the same startup business model and faces the same performance challenge, as does a mid-size business expanding to a new region or vertical market, or a large enterprise launching a new product family or new technology.

 

Startup ventures face limited talent, capital, and time, high risk and high reward.   Startup IT is a key pacing factor in rapid product development,  market penetration, and revenue growth.    We have all seen startups try to get to market faster than their internal information systems  can support, missing projections and  losing the confidence of investors, partners, and target customers. 

Expanding the Management Consulting Model as a Channel Partner for Cloud Services

Expanding the Management Consulting Model as a Channel Partner for Cloud Services

Carol Blanchar, M.S., CEO, Conexo

 

A colleague wondered if his consulting business to high-tech startups could use cloud service offerings to add more value to his customers.   He himself would gain a competitive advantage over other startup consultants in his market,  and expand his own business model with a stream recurring revenue to  balance his engagement-based unpredictable cash flow.

 

Startups are a clearly defined segment of the cloud services market, as they hope to avoid capital investments in IT and to allow service costs to grow with them.   It would be great if their Management Consultant could help them tap into some key services in the cloud – and the Management Consultant's role, working with managed service providers as partners, could be defined to balance risk and revenue for his own business, plus the rewards of a lasting relationship that maintains a value delivery with a client between engagements with very little additional time from the consultant.

 

The good news is that the cloud solution providers and service providers understand the importance of channel partners exactly like my colleague, to help them penetrate the small business markets.  Here is a brief review of what I've seen recently, from Conferences, papers, and web sites – and these are widely shared and discussed in Cloud venues and publications.

 

It might be interesting to begin with the experience of a technical services startup, like my colleague's clients, who embraced cloud services:

 

“While we decided on laptops and desktops with traditional Microsoft Office and Quickbooks Pro,

everything else we got from the cloud:

 

     • Hosted Exchange,

     • Hosted IP-PBX (yes, even in 2001),

     • Hosted customer survey application,

     • Hosted database application,

     • Hosted conference call service,

     • Hosted e-commerce for online sales of our intellectual property,

     • Cloud-based e-mail campaign and lead generation application,

     • Managed hosting for our benchmark database server,

     • PayPal for various other online sales,

     • A few years later, we picked a cloud-based secure document display system.”

 

That startup said that the cloud gave them a lot of capability with little risk.  They paid as as much as they used, month-to-month, and they only bought networks and PC’s at lost costs.  They rejoiced at their freedom from IT ownership.

 

However, that startup did experience dark sides to the Cloud.  Perhaps these are opportunities for a Management Consultant to add value?  Here are 6 startup, and small company needs, if they adopt aa set of cloud services like the example above:

 

1. Protection from the Complexity of having to deal with so many services providers.  Can a Management Consultant act as a broker / coordinator for agreements and services, pulled together in a single strategy to keep things simple?

2. Due Diligence.  Can a Management Consultant guide service choices to those that are stable businesses, that  value a small startup as a valuable customer, and have a good reputation in that market?  Can a Management Consultant make sure there is a plan if the startup has to switch services down the road?

3. Low Costs.  Can a Management Consultant evaluate value and risk to make sure that the monthly costs represent both safety and flexibility, and that startup or small businesses are not paying for more than needed, and still expanding services appropriately as we grow?

3. Customization.  A small startup cannot expect special treatment from a large service provider.  Can a Management Consultant, especially one with a very specific niche target market, with help from the provider or a third party, pre-configure and set up the application and integration settings, as well as infrastructure choices, that map to the special needs of both startups and highly engineered emerging markets?

4. Availability.  Can a Management Consultant define an overall service structure to bypass or replace points of failure that would impact the startup or its customers?

5. Consistency.  Can a Management Consultant help the startup to plan ahead so that overall services remain consistent over time, while allowing for growth and adaptation?

There is encouraging news and a pattern of emerging channel business models that encourage specialized Management Consultants to add value and growth the business with cloud services.  The Everything Channel, quoting a survey from IPED, shows the perceived criteria that End-Customer have for Cloud Deployment.  At least half of those surveyed believe that their target customers want the cloud deployment to provide:

·         Business continuity and disaster recovery

·         Competitive business advantage

·         Increase computing capacity and business performance

·         Reduced IT CAPEX in favor of operation expanse

·         Controlled / improved profit margins

 

Nearly half also want little need for IT, fast implementation, no application maintenance, flexibility, and redundancy.

 

The same survey source reports 1/3 of the respondents believe that both Consulting and Managed Services business models are themselves expected to increase relative to other business models.

 

Finally, a Management Consultant has a variety of relationship choices in the cloud channel.   The Cloud Service Providers try to select partners which add specialized value and complement their own business –  as an example, three levels:  Affiliate (tracking and commission), Referral (if the Management Consultant brings a consulting product that enhances the value to a target market, the provide adds higher commission,  with service education and sales training), or Reseller (a gull channel partner, who adds a discount / margin on the service fee itself).

 

The over-arching goal, from the vendor through the channel to the end customer, is to understand and agree on the value chain, to be able to confirm the added value at each layer of the cloud pyramid, and at each step to customer implementation and usage.  Cloud service providers do try to create and leverage multiple programs to give potential channel partners a choice, but niche services to special markets, like those of my colleague, offer extra value to providers and end-consumers, and can command a premium from both the channel partner and the customer.

 

Exactly what day-to-day revenues do flow back through the cloud?  Currently, fees are often based on a high volume of transactions for very small fees, they may include per app, per user per month, per feature level, per print or per document, per GB stored data, per hour of resource used, per purchase, per data service subscribed, per content downloaded.  End users and businesses are used to charges like this, but they are oddly disconnected from actual shared resource costs in a modern cloud architecture.  All of these kinds of usage charges are being quickly and brutally commoditized  - they are hard to defend and will soon collapse to near zero, if they haven’t already.   Cost-based charges to to cloud service consumers fall far short of the value that cloud service providers deliver to end-users and their business results, especially in partnership with a Management Consultant who can appy it directly to their business needs.

 

A Management Consultant is in a position to connect or bundle-in cloud service fees into more value-based service levels – one example is Optimizer (in person), Accelerator (online) or Educator (reports only)  Depending on the client’s need / level, the services might include:

• Confidential Group Membership
• Face2Face Meetings (no. per year)
• Virtual Meetings (facilitated, no. per year)
• Group Review of Financial Quarterly Results, and Quarterly Reports
• Quarterly Goal Setting and Review
• Best Practices Education Sessions
• Owner / C-Level Participation
• Discount on Consulting Services

Management Consulting fees for levels of service, designed specifically for a target market of startups in a specific market, would introduce the cloud services for the infrastructure and information ecosystem that kind of business needs, along with his consulting, to survive and thrive.

 

From this perspective, Management Consulting is a great channel partner for Cloud Services, and my colleague would seem a perfect fit to build his own value and expand his business by partnering with the Cloud.  A Win-Win! 

Surprise! Distributors in the Cloud

Surprise!  Distributors in the Cloud

Carol Blanchar, M.S., CEO, Conexo

 

That dreaded word, disintermediation, is stalking the channels once again, especially around Distribution, as technology moves to cloud services.  Sales of on-premise hardware and software are losing share to off-premise solutions, and solution providers are creating relationships directly with cloud vendors.   There are skeptics about the contribution a distributor can make to that value chain.

 

On their part, distributors find that it takes serious commitment, patience, and planning to participate in the new services market, and it is fascinating to see the variety of business models that are evolving as a result.   Tiffani Bova, vice president of research on IT marketing and channel strategies, says it’s a steep learning curve and distributors need to get started now to add value – perhaps as aggregate provisioning, billing, metering, and other services like partner recruitment, management, and enablement.  (See “Cloud Turbulence”, CRN, Jan 2012, p.29)

 

Distributors can see the aggregation of cloud services as a mirror of the kind of solution aggregation (pricing, service, support, with apps and portals online for their customer’s instant provisioning, billing, and support.   In a sense, that same value could be found in a cloud solution services aggregator role.

 

In real life, some big distributors each take very individual approaches to creating a role for themselves in the Cloud.  Arrow Electronics’ Enterprise Computing Solutions has launched cloud computing services under the Arrow Fusion brand.  The professional services team provides compliance with monitoring and management services, plus a portal with a view of activities in customer environments.  Under Empower VAR,  Arrow also helps solution providers sell cloud opportunities – helping to build out private cloud infrastructure, and also act as an extension of their services, even building Arrow’s own cloud infrastructure and virtual workbench.  Arrow bought the Technology Innovation unit of InScope International, with 75 employees focused on infrastructure delivery, providing tools that may help customers automate server virtualization and storage consolidation.

 

Avnet Technology Solutions is helping service providers build their own solutions, with educational help as new initiative.  They also offer end user resources for service providers, like cloud readiness assessment, and have a variety of partner initiatives.   (See more of these examples at “Cloud Eight: Distributors’ Game Plans”, CRN, Jan 2012, p.30)

 

You will find a wide variation in estimates of projected cloud service adoption rates.   The payback on distributor plans depends on how rapidly IT investment will shift to decrease IT service expenses or capital investment, or to  gain immediate advantages of scale and expertise offered by cloud services providers.   In addition, all components of IT, including services, seem to be rapidly commercialized for high volumes of recurring revenue with extremely low prices and margins – a far different and untested business model for most channels.   

 

Looking ahead there are sure to be fewer deals, more risk, new and rapidly expanding opportunities –  Game On!

A Place in the Cloud

A Place in the Cloud

 Carol Blanchar, M.S., CEO, Conexo

 

Every day we understand more about the shifts in information technology.  We are in a Perfect Storm – mobility, personal devices, storage capacity, virtualization, each is disruptive, and together they are a whirlwind of complexity that pulls in functions, channels, partners, and end users / consumers.

 

Business models are the means to turn the amazing flexibility, capacity, and reach of new technology into value for customers, and into profit and growth for the entire delivery chain.  From vendor to consumer, we work to provide access to the power and pleasure of this emerging ecosystem.  Together we share in streams of revenue based on increasing usage, functionality, and reach, growing over time.

 

We do this collectively, working together across company boundaries to provide vertical and horizontal integration, adding applications and configurations that help end customer services adapt and grow.  We stay connected to that end customer through initial implementation and beyond.

 

There are speakers and authors who articulate the profound changes to the technology business models – Geoffrey A.  Moore, J.B. Wood, Dion Hinchcliffe, and Alistair Croll to name a few.  They point out that these changes are inevitable and moving with the force and violence of an avalanche.  However, the roles and positioning of technical skills, business know-how, and infrastructure or platform services along the delivery chain remains fluid and undefined.

 

Without offering any answers, and with no data for statistical confidence in predictions, we see some hints about where new opportunities are taking root and even thriving today:

 

1.  Where there is already depth and breadth of serious technical knowledge and experience on the staff, especially of complex products and always-on operations.

 

2.   Where there is a history of successful partnerships for sales and delivery of integrated infrastructure and platform solutions.

 

3.  Where there has already been some move to cloud-type service offerings in response to requests from a target vertical market with special needs.

 

The ultimate winners of this challenge will most of all be organizations that learn quickly, keeping their in-bound channels from their end users and consumers open and responsive.

 

In all of this, Conexo acts as a curator of evidence of emerging business models that work.  We combine tech and business experience, especially with profit and growth drivers across channels, to understand and compare models.  We look for sustainability and attraction for scarce technical talent, investors, and strategic partners.  We participate in the stream of learning and dialogue between thought leaders, and capture links to current use cases and experience.   We share our learning, and the related content, on our websites, blog, and through papers and presentations.

 

Together we are all defining new business models that create lasting value from  new  centers of expertise and profit,  and  translate new technology into end user productivity and success – while we each find a place in the Cloud.

Business Customer Needs Drive Emerging Cloud Services

Business Customer Needs Drive Emerging Cloud Services

Carol Blanchar, M.S., CEO Conexo

 

Business needs for mobility, compliance, simplicity, security, and rapid time to market are pulling cloud solutions into mid-market and small businesses through specialized service providers.  Many Value-Added Resellers (VARs) are responding with business pivots to cloud-enabled services.

 

Here are a few of the emerging cloud-based business opportunities for such service providers and their business customer (you can track these and many more at The Insiders Guide to SBM from ChannelPro , a magazine for Value-Added Resellers).

 

Provide Desktop as a Service

This is huge – hosted virtual desktop solutions – stored centrally and accessed over the internet or network.  Although currently an enterprise IT sale, it is penetrating small business markets, and one of the most frequently asked-for cloud services from mid-markets.   Centralized desktops work with different form factors, they are easier to maintain, and with people faced with a move to Windows 7, many hope to avoid that PC upgrade.   This is an emerging area with opportunities for partnership – keep an eye on the service provider programs from companies like Citrix, already moving to work with tablets.   

 

Highly Regulated Markets -  Managed Firewalls or-Discovery for Compliance

Both of these services help a business meet regulatory and risk management requirements in specific markets.  They require staff with credentials in systems security as well as deep product-specific training  around hardware firewalls.  The Federal Rules of Civil Procedure require return of e-material in response to investigations and inquiries – both discovery technical knowledge and lawyers need to be on the staff.  These service providers usually charge recurring fees, often fixed-fee plans to help plan their won cash flow and resources – think of “on retainer”.  Small and mid-sized companies can be in desperate need for both of these services to meet their own business compliance requirements.  For e-discovery, you need a fierce commitment to process and the ability to move fast – litigation is a rigorous, time-sensitive space with enormous pressure for results.  Once again, these are very fast- growing new opportunities for managed service providers.

 

Broker as an Aggregator

Take multiple cloud solutions from different sources and pass them through – one-stop shopping, coordinated service agreements or fees, and additional security, adaptation, integration with legacy systems as needed – as levels of fee services.

 

Broker as an Integrator

Staff several product specialists under one umbrella, merge services from other providers into one – create automated workflows, removing that burden from the customer and getting quickly to increase productivity – one example is contact management from Salesforce.com with Gmail for notification or approval.  High revenue potential – you should already be doing a lot of integration work.  Another twist is the platform integrator – see Jamcracker – a kind of cloud service enabler to help a VAR create an integration platform for themselves.

 

Broker to add Governance

Makes sure other service providers meet regulations and compliance, and helps cloud offerings gain acceptance in highly regulated industries.

 

Broker to Customize

Create extensions to other cloud services for a specific function, tests and maintains them, confirms value contribution.       

 

More about emerging Service Providers in The Insiders Guide to SBM from ChannelPro   and other publications from the Everything Channel.             

 

 

Will Windows 8 Pull Business Users Onto Tablets?

The other day Byte had a WebCast about whether a Microsoft tablet running on Windows 8 would increase tablet adoption by business users, or even replace some share of PCs /Notebooks  in US businesses.   The presenters were Larry Seltzer, Editorial Director, BYTE, and Vishal Dhar, President Marketing,  iYogi, (an Indian IT services provider to US businesses)

 

The presenters shared market research results from a fall, 2011, survey of iYogi  US customers, including users, regarding the upcoming release of MicroSoft Windows 8.  Responders were older that average, better educated than most, and only 15% of the 1400 subscribers to iYogi services in the survey said that they have / are using tablets today.  (Neither presenter uses a tablet for work, and one called tablets in business as “The Barbarians at the Gate”.)

 

The presenters distinguish the Microsoft  design approach to the tablet as coming from Notebooks /PC’s, (rather than adapted from a mobile device / phone platform), and they wondered whether a Windows-based tablet – that is, one that can be secured and managed by IT, with features expected by Windows managers and users – will indeed drive increased tablet adoption.  Not surprisingly, given their own focus and position in the value chain, their conclusion was that Windows 8 tablets are greatly anticipated by most users, but that adoption will still be slow, and that tablets will certainly not replace PC’s nor decrease PC markets.

 

The presenters say that a tablet compatible with Windows would be welcomed by the users, but tablet lack of a keyboard and small screen makes it impractical for content creation – some new PC’s/Notebooks include an attached, swivel keyboard, and speculation that with a touch screen, perhaps that form would ultimately replace both tablets and notebooks.

 

There was brief mention of the Metro app manager on the proposed Microsoft tablet, with a possible App Store someday, but the presenters do not consider “apps” a driving factor in business tablet adoption.  On the cost side, there was no mention of the license fees for Windows 8 or MS Office on a tablet. 

 

Above all, the presenters believe that tablet adoption, beginning with the iPad, is driven by user delight and a great desire to simply use it, and that the same, unpredictable user emotions will drive all tablet adoption, so nobody yet knows how a Windows 8 tablet will be received, or exactly why. 

 

Reference: BYTE Live WebCast:  “What Impact Will Windows 8 Have on the Tablet Market?”,  Mar 14, 2012

You can view this free at

https://www.techwebonlineevents.com/ars/eventregistration.do?mode=eventreg&F=1004171&K=6IK

 

Carol Reflections:  For my part,  I am a happy Samsung Galaxy user because I can keep my business infrastructure free of iTunes tyranny and it’s a little friendlier to MS Office and Windows.  I also use the keyboard stand to enter text and do work – love it!  I do live in a family of happy iPad users, who pay more to stay compatible with their iPhones and iPods and the world’s biggest choice of apps.  

 

In my opinion, the key adoption driver and tablet choice for the individual, (and we don’t make a distinction about work or home since tablets are personal), is the app catalogue, balanced against  price and worries about Apple or other vendor “lock-in”.  The size and variety of app catalogues represent a set of micro-decisions by independent developers, who will be looking at how much they can keep for themselves when their app is purchased by end users, and who like open rather than closed, proprietary stacks for their own reach and profitability. 

 

Tablet app developers will probably be more eager to integrate with emerging cloud platforms, Software-as-a-Service offerings,  and mobile devices going forward, and  perhaps be a little less eager to program apps for Windows or Metro platforms.  The Windows tablet could find itself with a smaller catalogue size, fewer choices, and diminished or later apps than those offered to other tablet users – making it difficult to capture much market share, even  for “business” users. 

 

As a matter of procurement strategy, companies themselves are generally  moving away from expensive software licenses like MS Office Suite to expensed on-tap services and “micro-transactions”, billed in small increments to end users / consumers as they occur.

A Link to CRN and Business News About Cloud Service Providers

In September, 2011, Scott Campbell  of CRN magazine (print version) published a cover story, “ The Rise of the Cloud Provider”,  about Service Providers as channel players who are profoundly impacted by cloud technology and changes in vendor and IT / end customer business models.  

 

In an effort to understand current Service Provider positioning in this dynamic marketplace, Everything Channel  begins by defining a new segment called “Transformative” service providers – having no revenue from on-premise solutions, and a large majority of new sales coming from recurring revenue.  These competitors have been highly disruptive to traditional service provider channel players, they are aggressively competitive and have been growing very, quickly – in September they were estimated to hold 20% of the market.  In contrast, “Progressive” solutions providers, the majority of current service providers, move more slowly to recurring revenue, often in line with new services or capabilities that do not disturb their current services.   “Vintage”  solution providers continue to make their money selling hardware, software, and services, and generally take title to the product, generating little recurring revenue.

 

If you are interested in changing market roles for service providers, you can see this entire article by clicking here.

We Believe in Recurring Revenue

 

As we transition our own business model here at Conexo, from engagement to subscription, we are walking a path that our colleagues and partners in the Cloud walk with us.  Although current cloud products usually still present themselves in a familiar sales and delivery process across the channel, it is truly not a stand-alone point sale.  Each cloud adoption is simply the beginning of shared learning in relationship.with everyone in the channel.  Increasingly, they are going to be offered and priced on the basis of increasing value going forward, pulled by end user / consumer use, as the cloud services are more fully implemented and integrated into the overall ecosystem.

Consumers and their IT advisors face dynamic shifts between great technical flexibility on the one hand, and the long-term commitment and patience necessary gain transformational growth and payback from the Cloud's reach and agility.  At every step between vendors and end consumers of information technology, new cloud business models need rigorous analysis and evidence that each value contributor in the chain can attract investors, compete for talent, and inspire confidence in their target markets. 

The Wiki definition of a business model) is "the rationale of how an organization creates, delivers, and captures value."  That is, it is the map we follow to get from ideas to money, and so to thrive and grow.  The transition to cloud business begins by blurring the value distinctions between hardware, software, and services - and it ends by using the cloud to offer the combined value as an on-demand stream in a communication mesh of sharing between people.  On-tap value and recurring revenue - a new world!

 Here is a golden link on this topic of Recurring Revenue!  A short article published in the Harvard Business Review blogs, by  Anthony K. Tjan, CEO, Managing Partner and Founder of the venture capital firm Cue Ball and vice chairman of the advisory firm Parthenon., “The Best Business Model in the World”, http://blogs.hbr.org/tjan/2010/03/the-best-business-model-in-the.html , 11:00 AM Thursday March 18, 2010.  E-mail me or send a comment –  would really like to share thoughts!

 

The Word for the Day: VALUE

The Word for the Day:  VALUE

Carol Blanchar, M.S., CEO, Conexo

 

Value is just being defined for  current Cloud solution vendors and channels.  The new technology is a fundamental shift in solution architecture that profoundly changes price-performance and investment decisions for business buyers and consumers.   Emerging cloud infrastructure and platform services are increasingly easy to customize and scale for specific markets without repurchase or much delay, and can also be adapted going forward based on experience and business results.  However, they do require technical skills and experience with a wide variety of integration, linking, security, testing, monitoring, diagnostics , and vendor coordination. 

 

Based on their trusted relationships and deep knowledge of a target market, channel partners help their customers buy cloud solutions and services, selling and recommending  emerging cloud solutions.   They also guide solution design and technology development - vendors plan product strategy through broad surveys of channel experience about  customer need and market demand. 

 

This is an uncertain business.  We are going through a huge transformation in how IT investments are analyzed and budgeted, changing how IT departments  and the businesses they serve,  purchase technology.   At the same time, business IT vendors, partners, distributors, service providers, and resellers are redefining their own roles in sales, delivery,  and implementation.   Many are moving to increased. ongoing participation in IT operations, administration, and management -  business models across the channels at all levels are driving to recurring revenue streams that better map to cloud service costs and value delivery.

 

Far beyond using just service consumption and cost-of-ownership as a basis for investment decisions,  many now believe that pulling IT into better alignment with Line of Business value and metrics makes it an effective business enabler, even adding leverage for increasing business agility and growth.  The benefits of cloud infrastructures and platforms, when applied to key business initiatives rather than cost-cutting efforts, offers huge payback on a scale never possible before now. 

 

Value is the only variable in the business model that translates directly into market share growth, profit, or positive cash flow.   Most importantly, the entire delivery chain architecture of business IT depends, not on IT department success, but on the end line-of-business success which drives profit and growth back up the chain to the vendors with real dollars –  only the end business gets the dollar that buys groceries and makes payroll and pays for services back across the entire delivery chain – sustainable economic growth comes from performance by the last business, on whom all else depends.. 

 

Value quantifies what that end business consumer wants to pay good money for.  Every player in the IT services delivery chain bears responsibility for defining their own value contribution to end consumer / user success.   

 

The biggest hurdle is the disconnect between business value drivers and the way IT has been managed until now.  Business managers and teams still view IT charges as purely overhead administrative cost, a resented burden to be constantly decreased as much as possible, disconnected with their own value proposition and competitive success and business survival.   So, an immediate contribution of cloud computing to economic growth is in related conferences, professional organizations forums, sales and solution planning, and shared experiences, as people are gaining clarity and rigor around roles and business models, refining cost and pricing structures, and demanding evidence of real value based on solid business results.

 

Most important are futures of all the IT technical people who are essential to always-on, high-availability ecosystems.  Their ranks are thinning, but they must provide the expert knowledge and skill to realize the potential of emerging cloud-based business and go-to-market models.    Cloud services offer new value that justifies the retention and training of in-house and channel staff to match and manage service choices to points of greatest business impact and optimum results.  With them, we can deliver the cloud-based information systems that make us all far more valuable!

 

Word for the Day: TRANSFORMATION

The Word for the Day:  TRANSFORMATION

Carol Blanchar, M.S., CEO, Conexo

 

I’ve been spending most of each day on market research into the IT business sector, and it is fascinating!  All my professional life has been spent in an orderly IT market, and look at it now – it’s not blowing up or falling apart, just fading and moving around, like shape-shifters – everyone COULD be a number of things, none of them really defined, and all them so much more efficient, flexible, and cheaper that simply doing nothing is not an option.  Actually, a business soon won’t be purchasing with quarterly cycles, long-term agreements, big capital outlays, lock-in Service Level Agreements.   Selling and buying information technology is in transformation, it is becoming FLUID. 

 

Does this kind of fluid information technology market sound like something you’d want to invest in or bet on?  Maybe not so much.   Does it sound like an approach to business IT that you’d like to TRY and CHANGE when you want?  Absolutely!   So, in spite of the uncertain business models, the  entire industry is moving very quickly to cloud infrastructure services, that can be used to support cloud platform solutions, that can be used to support cloud software for end users / consumers. 

 

The biggest bump in the road of transformation to this huge new marketplace is the investment question – when and how will investors organize something so cloudy?  And there is also the scarcity of people for service development, sales, integration, and management, who have to get hired, trained.  No doubt innovative new ways will emerge for investing and sourcing and talent management.  

 

This transformation is the opposite of most current strategic planning and execution – it’s business strategy distilled and refined from collective, intentional, collective experience,  on the go. 

 

Imagine the old high mountain climbing business - it was mature, followed known routes, with big teams on long climbs supported by lots and lots of carriers and supplies.  Failure to reach a climbing goal was blamed on poor planning or lack of funds or leadership or the weather – and once a plan was chosen and investment funds spent, it got harder and harder to change plans once the team was underway.  Suddenly now there is new equipment and rapid climbing techniques.   People take off in groups of one or two – they may take the old route up a mountain or another path entirely, charging into the death zone willy-nilly, making videos, bragging to everybody and sending constant blogs, wiring themselves with helmet cams so that their friends can “go” with them real time, tagging the summit and getting back down in days not weeks and months, using little (but obviously better) equipment, sometimes dying or letting others die as they charge pass – then trying it all blind or with one leg, or on skis  or using parasails – and when they get home they publish their e-book and shop the movie rights.  Hundreds now summit  the giant peaks every year, not dozens.  Thousands go to play and just have the adventure, even though most never summit.  Wait – WHAT????

 

What has happened to the entry barriers for climbers / competitors?  It used to take years to muster the funding for a climbing expedition, and only the most daring would succeed.  Today, climbers who face the same challenges travel lightly and cheaply and fast, and they often don’t buy their equipment – they just advertise the brand on their real-time videos and web sites and blogs.  In the future they can just promise to use Comcast or Amazon or Disney or Microsoft as their Service Provider in exchange for sponsorship – and the service provider itself will be using the climbs to open up  and serve new service markets in Tibet / China and worldwide.  And think about what’s happening to mountain climbing equipment vendors?  Big growth, no longer pushed by expensive, big REI retail outlets but pulled from on-line demand in response to the latest news.   And what’s happening to the service providers / carriers?  They find themselves quickly becoming content enablers, brokers, and part owners of great stories and footage and advertising opportunities, with constantly evolving new revenue streams.

 

Enterprise, services, technology, vendors, channels, businesses, users – all the conferences, blogs, seminars, and publications – what an exciting moment in the journey that began here in the Valley not so very long ago.  Great people, wonderful ideas, new  businesses, unbelievable speed.   Transformation.

 

 

The Word for the Day: CLOUD

The Word for the Day: CLOUD

Carol Blanchar, M.S., CEO, Conexo

 

Tomorrow morning I head off to Cloud Connect 2012, here at the Santa Clara Technology Center. 

 

The Cloud has emerged slowly as a Conference focus here in the Silicon Valley.  It began as a mere thread in speaker presentations (each presentation had one slide titled “What is a Cloud?”), then became a kind of hype in session descriptions or names (everything used the word “Cloud”).  Only recently did the Cloud have enough real content and investment to qualify as a whole Track, and now, the Cloud has its own Conference.  The same Conference will be in India in May, and Chicago in September.

 

The unifying focus of Cloud Connect next week is the formation of cloud business and market strategy, to make it less, well, CLOUDY.  This is really urgent, because although the technology is still evolving and product specifications, prices, and related services are still being defined, the demand for game-changing price/performance improvements, help with data volumes, and always-on access for all business users is overwhelming  our legacy systems. 

 

Meanwhile, IT managers know that business users and business managers are taking matters into their own hands, moving rapidly into the cloud for business technology, happily signing up for parallel software-as-a-service solutions that work on their notebooks, tablets, and phones.  Some Lines of Business and functional teams go further – they take advantage of a development platform underneath their directly-purchased cloud application – they adapt, integrate, and meet their  business needs in weeks, not years.  In that way, they can move fast enough, with small investment and little risk, to survive and grow in their fiercely competitive markets.

 

Anyway, back to the Cloud Conference this week!  Since registering, we have received links to details about keynote speeches, sessions, workshops, and exhibitors, been  given ways to invite colleagues and codes for discounts and passes.  We have profiles to help us find and connect with each other online if there are people to meet or follow up during the week, and we have the code to a mobile app that works with Apple, Android, and Mobile app platforms.  We are ready and poised on the brink of the next 4 days – and it’s going to be GREAT!

 

For people who cannot travel or take the time off, missing the in-person conversations and shared learning, they can still watch speakers live or see videos online, for free, and download copies of the presentations – you can also get personal contact information for presenters and to people in the exhibition booths.   

 

So, here with we are with a nearly impossible gap to close, already behind the curve burdened by huge uncertainties.  The Cloud Conference is trying to frame a strategy for infrastructure, platforms, and applications.  We will work together to reassure each other  and our investors, and to reach collective clarity about business customer and end consumer needs.  Where are they today, where do they need to be, and how will they get there? 

 

What are the odds in favor of a successful and productive Cloud Conference?  Huge- because of the cloud! 

 

The San Jose Technology Center is wired with great infrastructure and tech support, kind of Conferences-as-a- Service to participants and the public, much of it relying on platforms and services in the cloud.  Lasting value is provided by live feeds, data access, file uploads and downloads, contacts and connections between people based on profiles, connections to speakers, resource links, security and access management, blogs, comments / feedback by session, and published materials that changes constantly.  So here we go, not once but three times in three different locations, to Asia and back.  It’s a wonderful world!

 

Channel partners in the sales, delivery, and support of business solutions have also begun working together in new and innovative ways to meet their customer needs and develop sustainable new business models.  Vendors, distributors, Managed Service Providers, and Value-Added-Resellers are developing new technical services for education, training, new partner and customer agreements, cross-company coordination, and problem resolution.  At the same time, cloud technology vendors work together to balance near term deployment with later build-outs, flexibility with simplicity, and vendor innovation with connectivity and reliability.

 

In fact, we observe that some transformative channel players are going quickly to market by using high-availability cloud services just as we see at the Cloud Conference.  Even more, they are defining this kind of coordinative, integrative management service as an new set of service products in a recurring revenue business model.   (By the way, the Cloud Conference could provide something similar for its own community if it wanted, at very low cost – we would register for a conference and an ongoing subscription to maintain connections and continue to share and learn together.)

 

So there you have it - the disruptive, transformative Cloud business, that could be stalled by emerging technology and business models, is instead coming to market at incredible speed by using the Cloud!   The work of defining cloud markets  is moving forward by itself tapping into cloud services to be fast, flexible, connected, and responsive.    Cheers for that amazing, mystical Cloud!

The Word for the Day: MANAGED

The Word for the Day:  MANAGED

Carol Blanchar, M.S., CEO, Conexo

 

The Managed Service Provider (MSP)  has long been  an key player in technology solution channels . Often invisible to the end business or consumer, the Managed Service Provider offers expertise, relief, and safety to VAR’s and IT departments.   It drives down operational costs and combines purchases for lower prices, and shields the in-house staff from painful  hiring and firing cycles. 

 

A managed service implies that the service user is shielded from technical complexity, integration issues,  vendor upgrades, problem resolution, outages – most of all, managed has meant anxiety relief.     

 

With their place in the sales and delivery channel,  Managed Service Providers have been key players in the go-to-market strategy for technology vendors and distributors.  They are a pathway to gaining more share of the mammoth small and mid-sized business information technology spending budgets, and are themselves significant purchasers of technical solutions, including service and support.

 

Today, in the brave new world of the cloud, MANAGED means more – managed means money. 

 

Emerging managed services are enabled by cloud technology in the same way that cloud solutions are enabled by virtualization.  At the same time, managed services help solve two barriers that limit the growth rate and profitability of the emerging cloud markets :  technology changes and business model changes.

 

Technology changes extend current cloud investment and risk beyond the initial point of purchase.  A close look at current cloud architecture elements – servers, networks, and storage – shows their vulnerability to ongoing upgrades and adaptation in their operating systems, configurations, utility and protocol versions, address and network management, and integration capabilities.  Technology will be changing constantly to solve problems, simplify solution offerings, automate support, and improve performance and security. 

 

Technology is also changing because of a fierce drive toward proprietary end-to-end cloud solutions from the vendors in the near term.   This is  not just because of a wish for customer loyalty with minimal churn, but also to incent and protect vendor investments in innovation and higher-risk solutions in high-availability and on-demand markets that are just begin to emerge and mature.

 

Business model changes from the cloud technologies are profound and disruptive.  Are you watching  the shifts  and repositioning  of technical service sales and delivery up and down the information technology channels, as companies search for market penetration, margin, customer loyalty, and sustainability?  Company by company, from vendors to the end business, cloud technology drives to a single winning business model of recurring revenue. 

 

So, if you want to sustain ongoing presence and value to the cloud technology consumer, offering uncertainty and risk from ongoing complexity – and at the same time incredible new savings, flexibility, and speed – you must go to market as some form of an ongoing Managed Service.    Some examples:  vendors provide ongoing delivery and upgrade support;  distributors partner with service providers to have lasting relationships downstream; Value-Added Resellers of all kinds stay alive by taking on their customer’s  IT services to end users; and IT departments that leave day-to-day operations to service providers while matching services to changing business and end user needs.   

 

Sometimes the business model change to recurring revenue is defined (especially by accountants) as simply a financial hat trick, a shift from capital spending to operational expense, but it is far more than that – it is an unstructured pattern of purchasing, not based on budget cycles or master business plans, but rather in response to critical line-of-business needs.  The purchasing will be a pull, not a push, based on end user and business opportunity and needs that appear in the product line or industry market.   

 

In the face of technology change, the Managed Service Provider offers a safe and orderly point of technology introduction and adoption.   Managed Service offerings provide a recurring revenue business model, integrating vendor solutions with ongoing planning, purchasing, integrating, upgrading, and deployment.  Finally, Managed Service Providers reorganize emerging cloud technology markets along customer-facing lines of value to specific verticals (i.e. medical, legal, manufacturing, government), regions (i.e. geographic or regulatory), or special circumstance (i.e. mergers/acquisitions, centralization)

 

So, here’s to the quiet channel player whose time has come!  Cloud solutions enable all technology - HW, SW, services – to be offered as ongoing services.  All technology solution vendors and partners, all the way to the end user, even internal  IT departments, are fast transforming into Service Providers - and the only service offerings that can survive and thrive in the face of profound technology and business model changes are Managed.