At this Reseller News roundtable on private Cloud, service providers got together to discuss the opportunity and challenges in the New Zealand market for Cloud service provision to enterprises and SMBs. The roundtable was sponsored by NewLease.
SATHYA MITHRA ASHOK (SMA): There is a mix of people representing different parts of the market at this roundtable. How does each of you perceive the market for private Clouds in New Zealand? What are your customer’s thoughts on the private Cloud and how are they reacting to it?
GEOFF OLLIFF (GO), VIFX: I come from a background where we would use a National Institute of Standards (NIST) definition of Cloud, which indicates that private Cloud happens inside a firewall. Yet it seems we have a lot of people working outside the firewall. My space is the enterprise space. We build Cloud-like environments for enterprises and Cloud for us has a definition of on-demand self service, scaleable and metered solutions. It’s an operational model not a product. And those are attributes which are fundamentally and economically more effective than traditional IT delviery mechanisms.
What we are seeing is a tremendous surge towards a much better way of doing what we have been doing in the past. Research, some of it from Microsoft, indicates that savings are in the order of 90 per cent, for moving to a multi-tenanted, on-demand Cloud mode. There is a 2010 MS paper and if you read it it will scare. it indicates that around 100,000 statistically independent workloads. The total cost of ownership (TCO) drops to around 10 per cent of self-provisioned infrastructure. now we know that the friends at Amazon are currently running around 360,000 physical machines and running about 2 million workloads.
We are really at the early stage of this change, and what it will look like in another five years is anybody’s guess. This is not something that the technologists are going to control. It is something that the CFOs are going to control. However, getting there is hard, and the bigger you are the harder it is.
For me private Cloud exists inside the enterprise’s secure space, whether on-premise or off premise – those constructs are irrelevant. What matters is that it is trusted and secure and inside the firewall. Its gonna be the the only way of doing things in the future in our opinion. and so the only challenge is how we help people cross that bridge.
LIAM BARTON (LB), TELECOM NZ: Apart from security aspects to the overall managed services and professional services, the challenge is actually involved in getting someone from a current segregated architecture into Web-based apps and data, and having security built into and between those layers. It is about being scaleable and being able to manage them. Actually the private side of it all is allowing you to be able to do some parts of it in-house before moving to the public or the hybrid Cloud. That’s the model. There is a lot of work to be done within NZ to get to that stage. and there is a lot of money sitting there in the next 10 years in getting to that state. It is the opening in the market – where private Cloud would allow you to move to that sort of position.
JOE NACAGILEVU (JN), DATACOM: In New Zealand private businesses have some virtualisation. Cloud is scaleable, and gives the users ready access to compute power and storage – on demand, up and down. A lot of people have virtualisation, not all of them have private Cloud. You have to drive the automation to make enterprises realise what a Cloud service is – private or public. This is the area in which some consulting has to be done. There should be more sharing of experiences on the nature of public and private Clouds – that is the big kicker and it is not easy to do. But there is certainly a market for hybrid Clouds. That’s the next big thing for us.
NARENDRA SINGH (NS), ZERO ONE/COMPASS MANAGED SERVICES: Customers are generally used to the old model of running things, something they have done for years. With the Cloud, and moving part of their resources and data to another location potentially raises security as a concern and a factor. When they run the business, in the back of their minds, they are wondering where the data is sitting.
However much you assure them at the time of selling the service that all their data is secure and everything is behind firewalls, they have a nagging sensation at the back of their minds about where the data is actually sitting. There is a lot of work that needs to be done to convince this part of the New Zealand market and overturn their mindsets to have them believe that their data is truly secure.
The good part about that is that there is a whole lot of studies backing up Cloud security. And, even though there is still a feeling of businesses being like families and keeping things internal, the families themselves are changing. The family molds are changing. it is only a matter of time for people’s mindsets to change, especially in the New Zealand market. And that will eventually determine how much of a force private Cloud will be.
LEE MILLER (LM), VOYAGER: To me the Cloud is all about savings and customers are dedicated to savings. There is a huge market out there as companies look to upgrade their existing infrastrastructure and people are increasingly talking about the subscription model. There are still people who prefer the traditional model, but they shouldn’t be scared of what the Cloud brings to them. The move to Cloud is being facilitated by rapid virtualisation as well.
FRAZER SCOTT (FS), MICROSOFT NZ: We consider the private Cloud as physically on premise or within a hosted environment with dedicated services. The interesting thing about that form is that it is more attractive for consumers. We were recently talking about Azure and Cloud services at Microsoft’s 18th TechEd in New Zealand. Not always, but certainly frequently, I would trust data in an environment where I know there is an efficient organisation and a locally hosted environment backing up data and services. This is opposed to SMBs, where they might think they have a firewall and protection, but that’s just what they think. Having the right expertise in the Cloud environment de-risks your investment.
SMA: Are New Zealand customers more happy with seeing something on-premise when it comes to private Clouds? Do they prefer to have their infrastructure where they can see it?
JN: I would have said ‘yes’ to that last month, but we are in constant conversation with customers. There are still small business that are hiding behind HyperV environments, but that is coming to an end. Customers are realising that they can put stuff out there and trust certain service providers, as long as they good SLAs in hand. That’s true Cloud mentality – businesses want their services to be delivered to them.
LB: We are seeing active changes in group policy that enables Cloud services as well.
GO: Funny – we have observed that organisations that have legacy business models will take unusual steps to preserve those revenue streams. Certainly security and sovreignity are both raised as issues. That is a competitive platform rather than real platform. It suits agendas to raise security as an issue, but in fact it is becoming less of an issue. Very rapidly, and where there is substantial economic benefit in addressing that issue square on, then that’s when the change will happen more quickly. Reaching and changing those business models are a big hand brake at the moment.
DOUG Tutus (DT), New Lease: From a customer standpoint, I don’t think a lot of customers know that they want. The buyer is exposed to technology issues and only the amount of time they spend learning about it is. If you look at your average CIO they know what is specifically important to them but they don’t know what they don’t know. So educating them in the process around the public and private Cloud has been a relatively short time frame journey, in which we stick to how you can utilise these tools to run your IT infrastructure.
If you are not sure about what you are buying you go back to your trusted partner or advisor, which is generally an IT guy, and that person is limited by his knowledge. We are in a chasm now where there is some knowledge out there with relation to the advantages and disadvantages of the Cloud and what it can do for your business, whether private, public or hybrid.
We’re dealing with what it’s going to take to shift some of your workloads into an appropriate environment. The future is really rosy. If you look at NZ market specifically it has generally had a high adoption rate into the Cloud, but there is still a vast blue eye of opportunity. Bearing in mind that an adopter of public Clouds is limited in what they can do or not do in them, the hybrid model would be the right model. There would be some attached to the public Cloud, some potentially on premise, some in a datacentre, and someone needs to manage these effectively whether through internal IT or outsource to some of you guys. An effective process to manage that environment – that’s where we are today.
JN: As a sales target, there is the CIO and then the CFO as well. The CIO is being driven by partners and if he can’t move fast enough then he will take it elsewhere. He has got on-premise solutions, and that’s all he does. The sprawl will appear increasingly within the business and that’s when things will change.
DT: I was reading an article the other day about the CIO. The consensus is that the CIO’s role generally has been to manage IT internally. The tech officer’s job is to go out and look for technology and bring them into the organisation. Most organisations don’t have the funding to have a tech officer and a CIO. So they try and merge the two. so there is an interesting discussion to be had with respect to how these people have been exposed to the new technologies and how they perceive it for their business.
And the exposure they have with regards to getting advice on that. So that’s something that I think going forward from a Cloud perspective is definitely a challenge but also an opportunity – having these C-level executives understand what it can deliver and working with the financial department to have them see the commercial benefit of the technology choices.
SMA: Is there a specific kind of organisations that is more suited for or more likely to adopt private Clouds?
JN: Whether the Cloud is on premise, off premise or public, its a business discussion. The CIO is involved but the smarter way to have the conversation is to concentrate on doing something innovative with IT for the business as opposed to fighting. Provider-based datacentres and Cloud services are a great fit for any business. Any business is suitable to it. It does depend on what kind of uptake they are ready for and what they are looking to achieve from it. And it is more than just technology – it is about availability and SLAs.
GO: There is a big application challenge. I don’t disagree with Joe much. But there is the element of legacy systems. Customers who are new can adopt new technology more easily than those who have got legacy and momentum. The smaller company has an advantage over the large. The challenge for the large is then to break themselves into multiple small bits and find areas where it can be adopted.
But what few are seeing in the enterprise space is the challenge or tension between historical monolithic app stack, which we have virtualised quite successfully. Now you have virtualised monolithic application stacks. So you can buy load balancing as a service at cents per the hour as and when you need it. and when you need it you just get more. Most applications are not built to take advantage of that technology. And until apps that big enterprises use can be interpreted into the new paradigm or re-architected. and that is a really big programming job, Cloud adoption will be delayed. The big vendors say it is going to happen, maybe around 2020. To me it is a very one directional kind of movement.
You either get crushed by it or you move along with it. But there’s also a lot of people that would like to go to Cloud but they can’t because their legacy apps are holding them back. And we can’t get enough software engineers to build new apps with clients screaming for stuff, little alone moving to this.
10-page report discusses the opportunity and challenges in the New Zealand market for Cloud service provision to enterprises and SMBs.