June 2009 Archives

For some time now, we have been making the case that Cloud Storage is a disruptive innovation, a game changer in its category.

By stating this, we are of course employing  Clayton Christensen's now famous theories on disruptive innovation (refer to his books: The Innovator's Dilemma, The Innovator's Solution, and Seeing What's Next)  His theory of disruptive innovation goes something like this:

Most companies innovate faster than their customers' requirements, and end up creating products and services that are too expensive, too elaborate, and even too inconvenient for use. They focus on "sustaining technologies" to  improve the performance of established products along dimensions of performance that their customers have historically valued. By doing this, they neglect "disruptive technologies," thus opening the market to low-end competitors, which compete on cost, convenience, and ease-of-use.  Over time these "disruptors" eat into the markets of the established players. The result?  According to Christensen, the established firms are "disrupted" by the upstarts, whose product and services are invariably cheaper, faster, and easier to use.  

As I read the countless opinions and articles on cloud computing and cloud storage, I keep coming across the mistaken belief that successful cloud services offerings will be delivered by very large companies, that have the capex and the scale to deliver large scale computing services.  I have blogged on two occasions about this issue (Microsoft: Losing Margins to the Cloud? and Trusted Service Provider ≠ "Big" Service Provider).

The common assumption is that the traditional IT vendors will be disrupted by cloud computing offerings from Amazon and Google.  The truth is, Amazon and Google may eventually impact this market, but they will not be the first to disrupt traditional IT service providers.Already we see hosting providers like Rackspace and SoftLayer provide their own suite of differentiated cloud offerings.



And what's more, companies like Mezeo can enable a relatively small IT service provider to quickly and efficiently deliver a cloud storage solution to their customers.  As such, many hosting companies, with significant expertise in delivering computing infrastructure capabilities, can quickly deploy and manage a service that is equal to or even better than currently available public storage clouds like S3 from Amazon, for example.

Our observation is that service providers around the globe are resolutely focused on deploying cloud computing services themselves, and they are in no way ceding this new growth market opportunity to the very few but large, significant providers. 

Cloud interoperability will also drive the delivery of many cloud-computing solutions.  We expect that you will see single name space solutions spanning multiple locations of a service provider, and, ultimately, the capability to interoperate clouds from different providers.  None of these capabilities suggest that we will see only a very few service providers.

Christensen defines the characteristics of disruptive technology as follows (Innovator's Dilemma, p. 234):

-    they are simpler, cheaper, and lower performing
-    they generally promise lower margins, not higher profits
-    leading firms' most profitable customers generally can't use and don't want them
-    they are first commercialized in emerging or insignificant markets

If you read what Microsoft's Ray Ozzie says about how Cloud Computing diminishes margins for Microsoft, or read about Larry Ellison's about-face on Oracle's entry into Cloud Computing, we see that Christensen's model predicts the evolution of our market - the same patterns apply; history it seems, will repeat itself.

Solutions like Mezeo enable the IT service provider community to deliver public cloud computing and Public Cloud Storage solutions, today.  No one told either technology or IT service providers that they should not do this.  The cloud is coming to you, and it is brought to you by the IT service provider community.  

The current issue of InfoStor contains an article by Jeff Boles, "Use Cases Make the Case for Cloud Storage," in which he provides some key examples illustrating why we at CloudStorageStrategy.com believe certain key principles will shape the future of the cloud storage industry and cloud computing more generally.

Specifically, the article highlights three things:

• Cloud storage will bring disruptive change to several large market niches.
• Cloud storage adoption will be evolutionary, starting with archival and long-term storage.
• Relationships, account management and custom solutions are still important in selling solutions to the business market.
  

Disruptive change. As we have discussed before, cloud storage brings game-changing pricing and service capabilities that will disrupt entire industries. Specific industries such as disaster recovery, data protection and recovery, records management, and other data services will be changed, as pricing and service delivery models are completely overturned. For the most part, customers and service providers will find the new pricing models liberating, as services that have been affordable to a few businesses will become relevant to a much larger segment of the market. Jeff provides examples of new services being launched by Iron Mountain. Whether or not Iron Mountain is successful in navigating the disruption that cloud storage will surely bring to its records management, data protection and recovery business, these moves by Iron Mountain are at least reflective of a corporate recognition that disruptive change is underway. Many new entrants are pursuing this market with innovative solutions and aggressive business models. The future of this market segment, and many other segments such as disaster recovery, will be interesting to observe.

Evolutionary change. Cloud storage will change the storage market, but it will change different segments of the storage market on different timescales. Jeff has it right in saying that file archiving and other forms of long-term storage will be the use cases that drive adoption of cloud storage solutions in the early going. At the other end of the spectrum, database storage will be among the last types of storage to move to the cloud. In setting expectations about the adoption rate of cloud storage, we need to keep in mind that use cases will drive the adoption rate. Legacy storage systems will remain in use, and will continue to be upgraded, for a long time for many use cases. Success for cloud storage solutions isn't so much about displacing all legacy storage systems; it is more about improving price/performance of certain existing use cases, as well as creating new use cases.

Solution selling. The "cloud" moniker tends to be associated with Web-based and credit card sales models. "Cloud" is independent of sales model. In the case of storage, cloud storage implies Web services API access and Web-scale multi-tenant architecture. While there are consumer-oriented solutions for cloud storage, the commercial market will embrace cloud storage. As Jeff points out, business customers demand security, portability, performance, availability and access - all within the context of their business applications and their IT governance policies. One-size-fits-all cloud storage solutions, such as Amazon S3, will certainly continue to have their place in the world, but cloud storage proponents need to recognize that an equally large market opportunity exists for those who can integrate high-impact business solutions on a cloud storage platform. Ultimately we will see a large number of mature service provider solutions that are customizable for mid-tier and enterprise customers, and configurable for the small business market. These service providers will spearhead the disruptive and evolutionary change as they drive adoption of cloud storage solutions.

From Tier1 Research:

NaviSite, a provider of managed hosting services to the enterprise and SMB market, is doing what many hosting companies are doing these days: getting into cloud computing. NaviSite is using Mezeo Software's Cloud Storage Platform software as part of its effort to build out cloud computing services.

Dan Golding, Vice President and Research Director at Tier1 Research, says  "Cloud storage has quickly emerged as the most popular of the new cloud services."

At Mezeo Software, we're pleased with the rapid adoption of our platform in the service provider market across three continents.  Our success is validating our strategy that there is a significant margin opportunity in cloud storage, and that service providers will want to provide their own storage services.  Our purpose-built platform allows service providers to:

•    Leverage their own storage infrastructure to create their own storage cloud offering
•    Extend existing service offerings and applications with Web service APIs
•    Support large and complex data sets and file formats
•    Scale to support a large customer base with stateless architecture
•    Deliver secure file storage with 256-bit AES encryption

The platform is a Linux based software solution designed for deployment within a service provider's own environment. It attaches to the provider's existing storage infrastructure through any mountable file system, letting providers customize their level of service. As a stateless architecture, the platform scales linearly to support a large customer base.

In essence, we help service providers reduce that all important "time to value."

This is exactly what Golding means when he says: "Partnering for such solutions, instead of building them yourself, can significantly strengthen the hosting provider's product set and reduce time-to-market."

Navisite echoes this sentiment.

"A major advantage of cloud storage for our customers is the ability to have immediate access to highly scalable storage capacity without upfront capital expense," says Denis Martin, Chief Technology Officer at Navisite. "With Mezeo, we can quickly provide our customers the flexibility to scale up or down based on their needs without designing for peak capacity."

The concept of Service Oriented Architecture (SOA) has been around for a long time, and some people believe it has not fulfilled its promise.  To the contrary, SOA is well on its way to fulfilling its promise and the rise of cloud computing infrastructure is an important step in this process.  In fact, cloud computing is already beginning to unleash the potential of SOA and much more is on the way.

David Linthicum, Editor-in-Chief of Sys-Con's Virtualization Journal, has it mostly right.  He says:

Let's get this straight: SOA is an architectural pattern, simply put the ability to create an architecture around the notion of many services that are bound together to create and re-create business solutions. Cloud computing is a set of enabling technologies as a potential target platform or technological approach for that architecture...One is the way of doing something, while the other is a potential outcome. SOA doesn't go away. It's not replaced. It's architecture. Cloud computing is a potential outcome of that architecture, thus cloud computing needs architecture, and vice versa.

David's rant was an argument against complaints by certain industry pundits that cloud computing is just an over-hyped reincarnation of SOA. 

I agree with David as far as he goes, but he can take his point further. He is correct to call SOA an architectural pattern.  He is correct to call cloud computing a "target platform."  But the real news in this story is that a target platform is exactly what SOA has been lacking all these years.  All applications must run somewhere; applications need infrastructure. 

SOA is an application architecture; cloud computing is an infrastructure architecture.  It's that simple.  This marriage is long overdue.

SOA applications inherently call upon Web services to request resources, so to run properly SOA applications need infrastructure architecture that lends itself SOA.  Cloud processing (dynamic allocation of CPU resources) and cloud storage (Web services API access to storage resources) infrastructure is the most natural target platform for SOA apps because cloud infrastructure is designed to scale in the way implied by the SOA approach to application architecture. 

Until recently, where could a SOA app find a venue to stretch its legs?  There weren't many options until the earliest cloud computing service providers deployed large-scale cloud infrastructure.  The SOA world owes Amazon and Rackspace a big thanks for making the infrastructure investment required to launch S3, EC2, CloudSites, CloudFiles, and CloudServers.  As the rest of the Hosting market--and broader IT service provider industry--follows suit, SOA applications will flourish.

So David, you're right.  Not only do cloud computing and SOA "need each other," but together they will ultimately justify all the hype.

A recent SmartMoney article tells us that Ray Ozzie, Microsoft's chief software architect, is concerned  that cloud services could undermine the company's margins over the long term:

"The margins on (online) services aren't what the margins on software are... It will increase our profits, it will increase our revenue, but you won't have the margin."

According to the article, Ozzie also said that there was probably room only for a few players in the cloud. Because of the need for costly, large scale data centers to process and store computing tasks, very few companies would be able to afford the investment necessary to get economies of scale.

Also, it seems very convenient to assert that their can only be a "few" cloud players who must be "huge" companies.  What this means (according to Microsoft) is that it will only be a Microsoft/Google world of "cloud" services. We beg to differ.  It is the IT Service Providers who already have the core competencies required to deliver on the promise of cloud computing.  And while the profit margins might not be in Microsoft's software, they are present in cloud storage. In the recent meetings on Cloud Storage at the SNIA Cloud Storage Technical Work Group, one of the specific topics was cloud interoperability, a discussion that assumes multiple clouds by multiple service providers.

Wait, there's more. A few weeks ago, Ozzie shared a few more thoughts on the cloud.  Courtesy of the Seattle Times:

On cloud computing:
"Right now the way I've been framing things is in essence we are moving to a world of three screens and a cloud. That's the most succinct way that I can describe it. For the user experience we will all commonly consume solutions immediate to us, whether it's in media, entertainment consumer or business, that will be delivered to us in something the size of a phone, something the size of a PC, and something the size of a TV. There will be solutions that weave those things together, brought together by cloud on the backend."

On how Microsoft Office will change to adapt to cloud computing:
"We have to repivot to think not 'Is this the specific device?' but 'How do you deliver these scenarios across these devices.' We are rethinking Office. We aren't conceptualizing Office as a PC product anymore. There are scenarios in the realm of productivity that are very, very appropriate for PC such as viewing a spreadsheet. When you are trying to share something, the Web is a much more appropriate concept in terms of how to share because that's how people are brought together. They aren't brought together on the PC; they are brought together on the Web.

"When we're in meetings like this or when you're in a conference room, you have your phone with you, you don't have laptop in front of you, you don't have a browser in front of you. You might use the camera and take a snapshot, you might activate the headset and record. ... Every device will be appliancelike so you'll go buy it, you'll log in with cloud-based identity and profile of what belongs on that device comes down to that device."

Looks like Microsoft is re-evaluating the cloud user experience >>

Recently, The Planet published a white paper comparing Cloud Storage performance as offered by The Planet (which uses Nirvanix), Amazon S3 and Rackspace CloudFiles.  It did a nice job of creating a performance-oriented benchmark, comparing Cloud Storage file upload and download time for the three services.  While it is necessary to understand this factor associated with Cloud Storage, it is far from sufficient and much more is needed, if one wants to begin assembling metrics and from these make business and technology decisions.

While this does paint The Planet's offering in a very positive light, one has to question the pertinence of the actual test. (Knowing how our offering would have performed in the specific test, as the CEO of Mezeo, I am a bit disappointed that we were not included in the test) Of course, at the end of the day we have to remember that this is after all a test conducted by one of the vendors who also somehow turned out to be the winner. A third party validation of the results would certainly be more credible. To that end we are assembling a slate of comparisons and seeking third party verifications, and hope to publish these results in late summer. 

A notable omission in the test was the comparison of the price per GB of the storage. Based upon published prices, The Planet offering is significantly more expensive than the others. 

This  introduces the idea of price performance, and that is very applicable, since many Cloud Storage use cases do not contemplate that the accessing server is housed in the same data center as the Cloud Storage solution it is accessing.   When access via the Internet is contemplated, the specific speeds of upload and download as revealed in the aforementioned test may be less pertinent, whereas price or other features may be the major differentiator of note.

How about the following metrics:
 

• availability: a fact based measurement
• reliability: based on the SLA offering 
• ease of Web Services API access: length and complexity of required API usage against a defined set of standard actions
• access methods: WebDAV, NFS, CIFS
• security
• feature/function richness and differentiation: sharing and collaboration, available clients, tagging, geo capabilities
• utility billing: true pay for use and on what time frames and at what minimums, and ultimate scalability (how much storage is immediately available). 
  

All or any of these may be highly pertinent to a Cloud Storage decision. 

And finally, how about running the test enough times so that the results are reliable and meaningful? Running the test for a total of four times and concluding that Amazon S3 has a 90+% variance is a bit of a stretch.

Please do not take this blog post as being too critical; I am grateful that The Planet is signaling a degree of market maturity as real, meaningful discussion of Cloud Storage attributes are brought to the marketplace.  The Planet is to be congratulated for elevating the discussion.  Now all Cloud Storage service providers, and infrastructure providers who enable storage cloud offerings, need to begin the hard work of defining the metrics, and publishing the results.

It is very interesting that we are still working out the definition of Cloud Storage and now we are faced with benchmarking competing service offerings.  The Cloud Storage marketplace is growing rapidly, and all of us are engaged in bringing this new capability to market. 

Thanks for reading this post, and stand by, more on this topic coming soon.