If you want to save money, go all the way…

The journey in building a new cloud platform has been an interesting one to say the least. When asking customers why they consider virtualization, private cloud or hybrid cloud solutions, cost saving is always part of the equation.

But, it amazes me how the technology decisions we make are influenced by vendors, and how few customers can work their way through all the FUD (fear, uncertainty and doubt). Some of the best FUD stories I hear, concern these statements:

  • We are a vendor X shop.
  • We only buy “best-of-breed” technology.
  • We only have vendor X skills.

Right…how does tying yourself into vendor X, thus leaving you without choice, save you money? And, who defines “best-of-breed”? I have it on impeccable authority that one of South Africa’s largest service providers locally, lose money on every single VM they sell via their cloud platform. How is this possible? Given their scale, they should have immense buying power, and their purchasing volume alone should put them in a much more competitive provisioning and costing space. But in thinking that, you’d be wrong.

Their first mistake was going the “we are a vendor X shop” route. Let’s not investigate the options, let’s simply take our shopping basket, and load it full of goodies that vendor X peddles, especially since vendor X claims to be “best of breed”. Dare question the rationale, and that old faithful independent analyst report, ranking vendors in a way where no one loses, but some are more equal than others, gets yanked out. This provides “proof” and is the basis for not even evaluating other technologies. Plus, said Service Provider have a long standing relationship with vendor X, and they do not want to “burn” that relationship and their current discounts, by buying from another player.

Then “we only have vendor X skills”. People, if your techies can only configure VLAN’s and routing on vendor X’s hardware, you have a serious problem on hand. You hired the wrong people! Certain technologies become a standard over time, and networking is a great example. You can buy networking kit from any one of at least 10 vendors, and your brand X skills will translate in maybe 4 hours of playtime. All you have to learn is how the command line or GUI works, as the underlying routing, switching, VLAN’s and link aggregating protocols are all the same. Storage is the same story. A LUN is a LUN, whether implemented on vendor A or vendor B’s kit.

I could carry on for days, but I think my point is made. In cloud, cost and ease of use is king. That is why we investigated everything, including the brand X’s of networking, storage, operating systems and virtualization technology. In the end, you will not find a single vendor X in our platform, we went with choices that suit our business, and where our skillset can easily be translated. It has been tough, we have been wooed, and even ridiculed for our choices, especially by the vendor X’s losing out. In the end we stuck to our guns, made bold choices, and now we’ll see how it all plays out.

And I’ll be making money on every single VM that I sell.

If it floats, flies or is in the cloud, you are better off renting…

The above bit of sagely financial advice was offered to me by a financial professional. Certain assets and items make no financial sense when you buy them, renting is the better option in many cases. Why should technology be any different?

I strongly believe that the days of buying physical servers at Capex cost is a business model that is dead for many enterprises. Why invest all that hard earned money in a dead platform, why not just rent what you need, elastically? Need more, rent more. Need less, rent less. Not only will your expenses match your requirements, but your get better proportional use from those rented assets.  Some recent reports puts the average utilization of servers running virtualization hypervisors in the enterprise datacentre, at between 20% and 40%. This implies that even “enterprise” virtualization is not delivering the value promised.

How do we solve this utilization issue? It needs to be solved as it implies that we are spending money on resources that we do not use. But getting benefit from this model means that we have to have modern application and infrastructure management technologies, so that we can “right size” our resources. Managing tech resources need to move beyond the “is it on or is it off” mindset, coupled with technology silos. No offense, but I do have a giggle when enterprises who get tools like Microsoft’s SCOM for free in their enterprise license agreements, think that these basic tools tell them anything about how the app is performing. No, today we need technology that will map our business rules and processes across infrastructure, showing us impact on business processes if a port on a device, or process on a server misbehaves. The issue here is cost. Most of these platforms need to gather various forms of data, including SNMP, WMI and packet level data. The best systems will even run a small agent on your .Net, SQL and Java systems, instrumenting these down to code level. But, in South African terms, a project like this could be anywhere from R 5 Million to R 10 Million, even for relatively small environments, with around 20 app servers and around 100 servers in total.

Solving this issue has been my mission. It is one of the reasons why our cloud platform can be called “enterprise grade”. Let me explain. The systems used to monitor the packet level data are dedicated hardware devices, capable of some serious data collection and analysis. However, when buying this technology, companies have to not only think about their data rates today, but also try and guess what the data rates will be 3-5 years down the line. Typically these assets get “sweat” a long time, so invariably, an enterprise buys a bigger box than what they need. Secondly, the tech to instrument your code gets sold in certain license batches, so you end up having to buy another 10 licenses, even if you only want to roll out another two servers, taking your total to 12. Having a cloud platform enabled that has this tech built in, makes it super easy for enterprises and software developers to have this technology “baked in” to their infrastructure. Now we get to a point, where we can deliver the following info:

  • How fast is my application for the end user using it, with total response time in milliseconds instrumented from the end user device, right down all the tiers of my application and infrastructure.
  • If my response is below par (my SLA requires a 400ms response time, but I am delivering a 900ms time), where is the delay? Network, server, app, code etc?
  • In multi-tiered applications, where we have a web front-end connected, to an app server, which in turn talks to a database, we can see the delay and details for performance between servers. So, a slow app may be slow because the connection between the web servers and app tier is slow, as a result of a bad configuration on a load balancer.
  • A new update was pushed for a .Net or Java based app, and now, certain modules of the app is slow. We can pinpoint these, and help developers debug and fix performance issues, as we can see exactly which piece of the app and code is causing an issue.
  • We can tie memory, CPU and storage system performance together, and see how changes in resource quantities (add more RAM, add more vCPU) is positively or negatively affecting app performance. You can also see if a bigger server is needed, or if two or three smaller servers, running with a load balancer will work better.
  • The network performance can be instrumented and modelled to the n-th degree. Is adding more capacity going to improve my performance, or will switching to a lower latency fibre optic link from my ISP improve my performance? Is accessing the service via Internet ok, or do I need to think about a dedicated point-to-point link to the cloud, or can I simply extend my MPLS service?

Understanding the impact of resource and their behaviour is key. With the right tools, you can rent just what you need. The right sizing job for CIO/CTO level managers just got so much easier…

Tactical technology thinking is killing innovation

A session with a representative from a major international research company confirmed what I have suspected for a long time…many IT players style themselves as “strategic” thinkers, but in reality, they employ tactical thinking to satisfy their own business goals.

Rodin's "The Thinker"

Rodin’s “The Thinker”

As we moved through my requirements this morning, it became clear why some obvious partnership opportunities were slow to materialize at the onset of our cloud platform R&D process. Historical vendor relationships rule the “Go to market” thinking of many large technology resellers and consultancies. Instead of thinking about “what” a problem needs to be solved with, they are thinking about the “who”. For instance, if the customer needs to solve a networking challenge, a certain vendor’s name is foremost. Now, is that a strategic or a tactical choice? I would answer tactical, as the networking market is going through a major change, and a large number of “up and coming” solutions might be better employed to solve particular problems. The reseller positions the choice as “strategic”, as they have loads of skills to support the technology. Does this mean that my gorilla in the networking space makes bad networking kit? Not at all, just they are not the answer for every problem related to networking.

This is where the disconnect happens. The customer has a specific problem that needs solving. The reseller believes the vendor’s go to market plan and strategy, in many cases simply because the technical resources that the reseller employs has no exposure to other vendor’s technology. And they do not have time to learn new skills or research the market, as they are flat out involved in either rolling out new infrastructure or busy fixing what is broken in existing environments. So, that most grave of errors are made…instead of really solving the problem, they force the customer to adapt their way of working to fit their reseller solution set. This is the origin of “architecture by evolution” and every new problem simply gets a plaster from the box we used previously. So, the sales guys get to play golf with the vendor based on their sales success, and the technical guys simply get to support more of the same infrastructure. Based on the “success” of this process, it simply repeats itself, ad infinitum to a point where I believe most enterprises run the same “template” for infrastructure.

I have reached the point where I am genuinely surprised when asking a customer about their general infrastructure and they give a “non standard” answer. It puts a huge smile on my face, giving me hope that we are trying to solve problems in a unique and customer specific way,  not in a sheepish way, following the herd rolling out the same old template.

Thinking caps on folks! Don’t be afraid to think outside the boxes provider by the well known tech vendors.

No lock in. At all. Ever

Quickly logged in to my mobile phone provider account this morning. My Samsung Galaxy S3 LTE device, running CyanogenMod, is getting a bit long in the tooth. Eagerly logged in to have a look at the new phone models available (time for a Sony, or another Samsung?), imagine my shock and disgust when I realized that I am only due for a free upgrade days before Christmas this year. I stared in disbelieve at the date, looking at the accumulated bill in front of me, amounting to thousands per month. Surely this cannot be? I spend big bucks per month, so surely my phone is not an expense but an enabler? Allow me to elaborate. I burn in excess of 1000 minutes per month, spend a couple of GB’s of data (despite wireless all over my office and home) and even pop off a few text messages a month. Making sure that I have a top flight phone should be an investment not an expense! In fact, giving me a free phone once a year would great. And not a “free” phone, but a real free phone.

This got me thinking…do business execs ever place them in the shoes of their own customers? How do you think our local Telco exec’s would feel, having to spend two years waiting for the next “free” phone while shiny new tech comes along every day, and 6 months is an almost acceptable replacement cycle for certain tech goodies? Getting phones for free as an R&D expense is nice if your a telco exec, but for the rest of us it is torture…

So, customer lock in. This used to be a very acceptable business model, and it is easy to see why. 20 years to pay of a house, 5 years for a car, 2 years for that new “free” cellphone etc. So many services force you to be locked in for a fixed, minimum period. Don’t think I can easily cancel or reduce my golf driving range membership. No sir, despite your current work schedule and minor health issue, you cannot cancel or “park” your membership, locked-in you are. Order a local ADSL service from our monopoly provider and get a “free” wifi ADSL router, if sir will just sign here and be locked in for 2 years. Crazy!

Why does this happen? I now believe it is because many companies do not have the means and wherewithal to effectively compete in a constantly changing business environment. Why drive ourselves to constantly innovate and delight our customers, when we can just lock the suckers into a term contract? I hope the boardroom talk is not as blunt as that…

But, the world has changed. Even things like cloud computing platforms who bill you on a pay-as-you-go basis have you locked in, because getting your apps and data in and out is difficult or in some cases impossible. Thus while it is easy to turn your billing on and off, moving providers in not that easy.

Now take pity on my poor business partner for what I am about to say. Not only are we entering a new competitive market space, but achieving lock-in has never been part of my design or business plan. Why? Simple, I imagined myself as my own customer. How would I feel if I am locked into some sub standard and slow service? I’d be hopping mad, frustrated and ultimately tell all and sundry to avoid such a platform like the plague. No, the way I want to keep customers is by making it easy to get on my platform, make it easy to use, quick to provision, bill using modern flexible methods, and finally make it easy to leave if you are unhappy. Risky? Not all, if I constantly delight you, and charge you a reasonable rate, why would you want to move, I gave you no reason too 🙂 Will we have churn, sure, but those customers will also return when they go and try the alternatives and realize how easy getting in and out was with us. The pressure will be on us to delight and surprise our customers, keeping them with us out of loyalty due to the great service and deal they get.

On that note, a shout out to my peeps (Wilfred, Christian, Johan et all) at O’Galito’s Centurion. This Portuguese style restaurant has delighted me for almost 10 years. Last night I took some family there and we had a blast, great service and food. They have never dropped me once, which is why if you do business with me, are a friend or family, you’ll end up there with me sooner or later… Obrigado!

Competing with the big boys

Years ago, my dad and I would sit and talk about the logic behind buying a business, and competing with established players in a particular market. He would always ask why you would buy and existing business, when you can open up shop across the street, offering a better deal and thus gaining the business for “free”. It is not always as easy as that, and entering a new market, or one with established players in not for the faint hearted. Why make a radical change in our business? Well, the old adapt or die saying is super true in our case. While we are far from dead, the writing is on the wall and before we go on life support, we’d rather change what we do. Several things have changed in our industry, and I firmly believe the “reseller” model is going the way of the dinosaur. Buying a piece of technology developed by someone else and slapping a single digit markup on it to sell it to an end user customer is just not sustainable. Just ask the big players who love their turnover vanity (big numbers) but are operating on annual losses. Getting out of that game is our drive. While we’ll be buying loads of fancy legos, how we piece them together and what we do with them will be our competitive edge. To busy to improve? Entering a space with a few players seems to give some investors comfort, as they think that while they may not get to dominate a market, they can view a slice of an established business sector that is known to work. Less risky… Geoffrey A. Moore wrote a bunch of amazing books about high tech marketing, and how you deal with the Gorillas on Main street, the entrenched and well established players. You also get guys like Richard Branson, who enter established markets (airlines, railways, cellular) and bring a fresh approach to an old idea. I think the cloud computing market is set for a big shake up in South Africa, and the rest of Africa too. The question is, how do you compete with massive and established players such as Amazon, and up and coming players with loads of resources, like Google and Microsoft. It is not as difficult as you may think…Each of the new up and coming players painted a big target on Amazon’s back, and they have claimed some wins. Google is now renowned for how quickly they actually start instances up, and some flexibility with their services that Amazon does not have. One has to remember, that Amazon built the first of these mega platforms, and the IT world collectively crapped themselves. Loads of cloud stack vendors now try and at least mimic the Amazon feature set, as that does provide a good baseline of functionality. Amazon now also have a massively scaled, but “legacy” system, so turning that big ship around to plug some holes is not as easy as it seems. This creates opportunities for players like us, and that is why we’ll thrive in this business. Where does this leave me and my new platform? I do not have dreams of global domination, but I do dream of African domination. The time is right for a new innovative player to enter the local market, breaking the mould in terms of service offering, service experience, ease of use and feature set. If all goes well, in 16 weeks our platform launches in V1.0 state, but the V2.0 onwards stuff will blow your mind… I’ll keep the blog updated with our progress…