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The IT department does not die out – But it will have to change

Recently an article in the english Computerworld got the circuit in which the assumption was made, that by the end of this decade the IT department could disappear. T-Systems‘ Ingo Notthoff subsequently debates on the question at Facebook, „If the IT departement to die out.“ I’ve clearly answered that they will not die out, but transform into a service broker. This discussion Ingo again has written down in a (German) blog post. A this point I just would like to continue this topic to clarify my point of view.

Despite the consumerization of IT there is a lack of important knowledge

Even if I appreciate everything which promises to be disruptive in any form. There are things that are required despite the massive use of technologies und self-services. I am talking about humans.

I know and it is right that cloud services via self-service can be virtually used by anyone in the enterprise, to reach the own goals by the personal requirements without always waiting for the IT department. But is that reasonable? Can anyone decide which services are valuable and important for the company, just because he can use an iPhone or a SaaS application? In doubt, the knowledge is obtained 100% of external consultants, which is not necessarily beneficial. Saving costs for staff is fine and dandy, but need to stop at some point. Because where costs can be saved somehow, others have to work longer. The line of business managers will be thankful.

Moreover, just listen into the companies. Of course, most would want that IT works faster. But do they also want to take responsibility for it in addition to their main tasks? No! This certainly works for a few areas in the company, but most employees don’t have the knowledge, desire and time for it.

IT departments need to reinvent themselves

After I take up the cudgels for the IT departments, I also have to express criticism. Has not everyone already annoyed on the slow, hanging behind the time IT department? How can it be that you have to wait up to 3 months on the hardware for a test system(!). And at the end it turns out that it’s just a virtual machine. Of course, these experiences feed those who would mostly like to eliminate IT departments from one day to the other. In this case for a good reason.

Nevertheless, each good IT department is very valuable to any business. The extreme examples confirm fortunately not the rule. However, no IT department should go on this way, but need to concern about a structural change and ultimately implement this. Thanks to the cloud it has lost its central position for the purchase and operation of IT solutions. Shadow IT is here a so far proven means for the employees passing IT department to obtain IT services quickly and on demand.

This circumstance needs to be eliminated. Shadow IT is necessarily not something very bad. At least it helps to ensure that employees get things done quickly in their jobs and in their own way. For each decision maker and IT manager, however, it is comparable to a walk over hot coals. There is nothing worse in a company, if the left hand not know what the right does or when IT solutions degenerate into uncontrolled proliferation. This can be handled only by a central organization. On which the IT departments should not go back into their ivory tower, but pro-actively communicate with the employees of the departments to understand their needs and requirements. The IT department is the internal IT service provider for the employees and departments and should also classified like this into the company. In times of internal and external (cloud) services, broker platforms are the tools with which they are coordinating and steering it for the employees.

Coordination is hugely important

Where we finally come to the issue of IT responsibility within the company once again. Depending on which study you want to believe, the private cloud is currently the preferred cloud shape in the company. After all, 69 percent of the respondents say that. In addition, in 80 percent of all cases the decisions on purchasing IT solutions are made in the IT departments. At first this sounds like the preservation of the status quo. But due to the current political developments it is probably remain the reality for now. Nevertheless, real private cloud solutions enable enterprises a flexible allocation of resources through a self-service for their employees.

But who should build this private cloud infrastructures and who should coordinate them? This can only be done by the IT departments. All other employees have a lack of the necessary knowledge and time. IT departments need to learn from the providers in the public cloud, allowing the departments a fast and especially easy access to IT resources in a similar way. This only works if they establish themselves as a service broker for internal and external IT services and see themselves as a cooperative partner (service provider).

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Analysis

The cloud computing market in Germany 2013

The significance of cloud computing continues to increase in Germany. If you believe in local market researchers the interest in on-demand services continues unabated and is even increasing steadily. The same can be said for the vendor side. Periodically, new services or even providers appear on the market. In particular, the software-as-a-service (SaaS) market is enjoying growing popularity in Germany. Infrastructure-as-a-service (IaaS) providers are similarly well represented, but should not make the same mistakes as their international competitors. For platform-as-a-service (PaaS) provider is still enough space.

Cloud demand in Germany with steady growth

Believing in the figures from market researcher Techconsult, already a third of smaller German companies use cloud solutions. The greatest demand is there from the mittelstand preferred from trade, banking and insurance industry. Large corporations and medium-sized companies are among the leaders in the use, but also the small ones catching up rapidly. In the last year, only eight percent of small-and medium-sized companies planned to use cloud solutions, this year it’s already 24 percent .

29 percent of companies in the trade industrie are interested in cloud computing. This is an increase by 21 percent compared to last year. In service industries every fourth company relies on cloud services, on-year increase of over ten percent. The biggest interest comes from the field of banking and insurance. 33 percent of the companies in these industries rely therefore on cloud technologies, although the cloud was considered in the previous year rather skeptical.

Conferences show a similar behavior

At the first Amazon Web Services Summit in 2010 in the Berlin Kalkscheune manageable 150 participants could be counted. Meanwhile, Amazon has moved to the Berlin Conference Center, reaching 1,500 participants, so many that monitors had to be placed outside. The situation is similar with Salesforce. The as a SaaS CRM provider well known company welcomed at this year’s Customer Company Tour 13 up to 1,800 visitors, according to their own account.

Compared to the masses, that regularly rush on American conferences these numbers are rather Peanuts. In Germany, however, very good odds.

Distribution of the cloud computing provider in Germany

What the examples of Amazon and Salesforce show: Both companies are cloud service providers and do not trade with virtual resources. Even if Amazon was the first IaaS provider on the market and is considered as a prime example, it is about the web services around the infrastructure that provide the customers with the actual value. It’s the same with Salesforce. Started as a hybrid of SaaS and PaaS provider, the CRM vendor directed its platform to the future and topics such as The Internet of Things.

In the two points above, most of the German cloud providers stumble. The IaaS market in Germany is highly developed. In addition to many subsidiaries of international companies more and more vendors from Germany are looking for their place in this cloud segment. However, all rely on the same strategy and make the same mistake as many international vendors to gain IaaS market share. First, they focus exclusively on virtual resources (computing power, storage space) and provide no added value services around it, see Amazon AWS. Second, corporate customers are addressed exclusively. Developers are not be considered. From a financial perspective this is attractive, but means that developers must inevitably avoid to U.S. based providers, as there are no similar German but also European alternatives.

The largest cloud market in Germany is provided by the SaaS provider. Here, many famous IT players attend but also increasingly young companies with innovative ideas. SaaS offerings are primarily driven by market places from major service providers such as Deutsche Telekom or Fujitsu. Both collect, for them, high-quality services under one roof and provide an assorted offer, companies can choose from. A special characteristic of many German SaaS solutions is the fact that they take care of the construction of the necessary cloud infrastructure and consciously set on a German data center. Issues such as the future security of their own solution and trust by the customer are the main decision criteria.

The market for PaaS provider is still very open. The number of providers that are launched directly from Germany, can be counted on one hand and is very manageable. Moreover, two out of three set on IaaS offers from U.S. provider. In addition to some international competitors, here are still opportunities for a PaaS, which is operated directly in Germany. However, the large (German/ European) IaaS providers are asked to give young entrepreneurs and developers the ability to develop such a solution faster.

Germany is on a good way to the cloud

At the end of the day it can be said, that the German cloud computing market has a well balanced ratio of XaaS solutions. However, there is still some potential left behind by not addressing the important group of startups and developers with appropriate services for them, and this therefore having to avoid to overseas provider.

The distinguished figures in terms of cloud adoption in Germany show that the confidence in the provider is growing steadily and the understanding for the value of cloud services has reached. But it also shows that the providers have worked on themselves and are willing to eliminate the concerns and criticisms of their potential customers.

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Infrastructure is commodity! Vertical services are the future of the cloud.

In 2014, the infrastructure-as-a-service market expects a total revenue of estimated $6 billion worldwide. A good reason to try its luck in this cloud segment. Numerous providers have jumped on this train in recent years and try to catch market share from the top dog Amazon Web Services (AWS). No easy task, since the innovation curve of most followers behaves rather flat compared to AWS. One reason is stiffened in the adherence to the word infrastructure in infrastructure-as-a-service. Arguments to change from AWS to a competitor because of a significantly higher performance sounds tempting in the first moment. But at the end of the day the maturity of the portfolio and the view over the entire offering counts and not just a small area where you have procured a technological advantage.

Infrastructure-as-a-services indeed mean services

Even if the Amazon Web Services was the first IaaS provider on the market, the word „web services“ take a central role in the philosophy of the company. Started with the basic and central services Amazon EC2 (computing power, virtual machine) and Amazon S3 (storage) more new services were rolled out in very short periods of time, which only have in the broadest sense something to do with infrastructure. Services like Amazon SQS, Amazon SNS, Amazon SWF or Amazon SES help AWS customers to use the infrastructure. Starting a single Amazon EC2 instance has in fact just as much value as a virtual server at a classic webhoster. Neither more nor less – and is in the end even more expensive per month. So, who hopes to be invited to the party by offering infrastructure components – virtual computing power, storage, gateway – in the future, will probably have to stay out.

To largely stay out of the price war, Amazon, Microsoft and Google currently fighting on, is also advisable. While this pleases the customer, but will sooner or later lead to a market adjustment. Moreover, if you look at how Jeff Bezos leads Amazon (eg Kindle strategy), he gets involved in price wars, just to gain market share. Therefore IaaS providers should prefer to use the capital to increase the attractiveness of their portfolio. Customers are willing to pay for innovation and quality. In addition, decision-makers are willing to partially spend the same for cloud solutions or even more as for on-premise offerings. The significance is enhanced on the flexibility of the enterprise IT, in order to give the company more agility.

To match this, a tweet from my friend and fellow analyst Ben Kepes from New Zealand who hit the nail ironically on the head.

Vertical services are the future of the cloud

The infrastructure-as-a-service market has not yet reached its zenith by far. Nevertheless, infrastructure has become a commodity and is not innovative anymore. We have reached a point in the cloud, where it is important to use cloud infrastructures now to build vertical services on it. For this, companies and developers, along with virtual computing power and storage, are depending on services from the provider to operate its offer, performant, scalable and fail-safe. Despite the meanwhile extensive service portfolio from vendors such as Amazon, Microsoft and Google still a lot of time, knowledge, effort, and thus capital is needed to reach this state. Furthermore, only proprietary infrastructure-related services are offered to work with the infrastructure of the providers. Everything else should be self-developed under the aid of these services.

For this reason, the market has a lack of service-portfolios from external providers that can be used by companies and developers in order to use ready-services on-demand which otherwise must be developed on the infrastructures and platforms themselves. Suchlike value-added services can be integrated horizontally into the vertical services for a specific business scenario and be used when needed.

This BBaaS (business-bricks-as-a-services) integrate provider-independent in existing infrastructure-as-a-service and platform-as-a-service and create added value for the user. The individual business components are standardized and already highly scalable and highly available implemented as web-services and can be easily integrated without much effort.

More about the BBaaS concept can be found at „Business-Bricks-as-a-Service (BBaaS) – Business Building Blocks in the Cloud„.

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Cloud Rockstar 2013: Netflix is ​​the undisputed king of cloud computing

I think it is time to ennobling a company for its work in the cloud. Unlike to what one might imagine now, it is not one of the providers. No! Even though it’s the providers that create the capabilities, it’s the customers who ultimately make something out of it and show the general public the power of the cloud. Here, of course, you have to distinguish the ordinary customers from those who show a lot of commitment and have adapted the way of thinking cloud and thus also architecturally make a lot of effort. To make it short, the king of the cloud is Netflix and especially Adrian Cockroft, the father of the Netflix cloud architecture.

Born for the cloud

Before Netflix has decided to use its system in the cloud (migration from their own infrastructure), the company spent a lot of time trying to understand the cloud and build a test system within the cloud infrastructure. In particular, at this a lot of care was taken to generate as much realistic traffic scenarios as possible in order to examine the test-system for its stability.

Netflix initially developed a simple repeater that copied the real and complete customer requests to the system within the cloud infrastructure. Thus Netflix identified the possible bottlenecks of its system architecture and optimized in the course its scalability.

Netflix itself describes its software architecture like aa Rambo architecture. This has the fact that each system must properly function independently of the other systems. For this purpose each system within the distributed architecture was developed to be prepared that other systems to which a dependency exists, can fail and that this is tolerated.

For example, if the evaluation system fails, the quality of the answers deteriorated, but it will still answer. Instead of personalized offerings only known titles will be shown. If the system, that is responsible for the search function, is intolerably slow, the streaming of movies must still function properly.

Chaos Monkey: The secret star

One of the first systems that Netflix has developed on and for the cloud is called „Chaos Monkey“. His job is to randomly destroy instances and services within the architecture. Thus, Netflix ensures that all components function independently, even if partial components fail.

In addition to the Chaos Monkey Netflix has developed many other monitoring and testing tools for the operation of its system in the cloud, which the company calls as The Netflix Simian Army.

Netflix Simian Army: The role model

The Netflix Simian Army is an extreme example, how a cloud architecture has to look. The company has invested a lot of time, effort and capital in the development of its system architecture that runs on the cloud infrastructure of the Amazon Web Services. But it is worth, and any company that wants to use the cloud seriously to present a highly available offering, should definitely take Netflix as a role model.

The effort illustrates the complexity of the cloud

Bottom line, Netflix plans in the case of an error and does not rely on the cloud. Because sometimes something goes wrong in the cloud, as in any ordinary data center. You only have to be prepared for it.

Netflix shows very impressively that it works.

However, when you consider what an effort Netflix is doing to be successful in the cloud, you just have to say that cloud computing is not simple and a cloud infrastructure, no matter at which provider, needs to be built with the corresponding architecture.

This means, conversely, that the use of the cloud must become simpler in order to achieve the promised cost advantages. Because if one uses cloud computing right, it is not necessarily cheaper. In addition to savings in infrastructure costs which are always pre-calculated, the other costs may never be neglected for the staff with the appropriate skills and the costs for the development of scalable and fault-tolerant application in the cloud.

Successful and socially at once

Most companies keep their success for themselves. The competitive advantage is unwillingly given out of hand. But not Netflix. At regularly distance of time, parts of the Simian Army are released under the open source license, with each cloud users get the possibility to develop cloud applications with the architecture DNA of Netflix.

Cloud Rockstar 2013

Due to its success, and in particular its involvement in and for the cloud, it is high time, to ennoble Netflix publicly. Netflix has understood to use the cloud almost in perfection and not to keep the success for themselves. Instead, the company is giving other cloud users the opportunity to build similarly highly scalable and highly available cloud applications using the same tools and services.

For that reason the analysts of New Age Disruption and CloudUser.de appoint Netflix to be the „Cloud Rockstar 2013“ in the category „best cloud user“. This independent award from New Age Disruption is presented this year for the first time. Giving to vendors and users for their innovations and extraordinary commitment in cloud computing.

Congratulations Netflix and Adrian Cockcroft!

Rene Buest

Cloud Rockstar 2013 - Netflix

Further information: Cloud Rockstar Award

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Salesforce Customer Company Tour 13: Salesforce is using the cloud as a tool for the maximum interconnection

At once with a new self-created claim to be a „customer company“, Salesforce changed the name of their customer event „Cloudforce“ to „Customer Company Tour 13 (CCT13)“. And the CCT13 has shown the name fits, both the claim and the name of the event. Instead of letting Salesforce employees do the work predominantly, satisfied customer came to word and spread the messages.

Salesforce needs and wants more market share in Germany

Besides Amazon AWS and Google, Salesforce belongs to the early stage cloud provider. Compared to the international and European market the reputation in Germany is rather little. This is not due to Salesforce‘s portfolio, but rather the skeptical German cloud market. Furthermore Salesforce is still recognized as a pure SaaS-CRM in their outside image, but what the company no longer is. The focus needs to be changed on marketing the whole platform to show that and which business processes can be mapped to it.

With that the company starts during its CCT13. The idea for the new „Customer Company“ claim Salesforce gets from a 2012 IBM study. At it one can see that even young disruptive companies can learn something from the old stager. To ensure the claim to be a customer company Salesforce sets on seven pillars: social, mobile, big data, community, apps, cloud and trust. The first six can already be find in the portfolio. Trust is something that is naturally and should stand over all.

By the way, Salesforce will build a new data center in Europe, London, in spring 2014. In addition a global research and development center in Grenoble is planned.

The Internet of Things has a high priority

I was totally excited by the GE use case, which unfortunately just got only a little marginal attention. However, the use case is showing the big potential of Salesforce platform and in which direction the company will steer. GE is using Salesforce Chatter to let their jet engines send support teams status information (m2m communication). More background information following soon. But this video gives a good insight of the use case.

http://www.youtube.com/watch?v=GvC1reb9Ik0

Salesforce is showing exactly what I already attested the cloud. The cloud serves as the technological basis for the maximum interconnection of everything, e.g. The Internet of Things. And here Salesforce with its platform and the strategic direction is on the right way to become one of the big player in this market.

But it is showing something else. Salesforce is more than just sales in the meantime. Maybe we experience the next mammoth project. Changing the name from Salesforce to „- we should be curious -“

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Missed SpotCloud: Deutsche Börse Cloud Exchange is not the industry-first, vendor-neutral cloud marketplace

I already pointed out in my comment on the cloud marketplace from the Deutsche Börse, that this is not the first marketplace of its kind and Reuven Cohen in 2010 was much earlier with SpotCloud. After I read across the press, I have to say that the „Deutsche Börse Cloud Exchange“ want to be something it is not: the industry-first, vendor-neutral cloud marketplace for cloud infrastructure resources.

Three years too late!

The marketing of the Deutsche Börse seems to want all the credit which does not belong to them. As interesting the idea of ​​the Deutsche Börse Cloud Exchange (DBCE) is, one should stick to the truth. Because the marketplace is by far not the industry-first and also vendor-neutral marketplace for cloud infrastructure resources. This crown belongs to Reuven Cohen, who has launched SpotCloud in 2010. In the top SpotCloud has been managed 3,200 suppliers and 100,000 servers worldwide so far.

In addition, SpotCloud also supports OpenStack since April 2011. A point also Stefan Ried has justifiably criticized on DBCE.

So dear marketing of the Deutsche Börse, good idea/ solution, but please stick to the truth. Even the NSA is no longer able to hide something from the public.

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Conferences

Free GigaOM Research analysts webinar on July 9 about the future of cloud computing in Europe

Anyone who is interested in the future of cloud computing in Europe should register for the international GigaOM Pro analysts webinar on July 9. Moderated by Jo Maitland, Jon Collins, George Anadiotis and I will talk about the opportunities and challenges of the cloud in Europe and countries such as Germany or the UK, thus giving an insight into the cloud computing market in Europe.

Background of the webinar

The European Commission unveiled its “pro cloud” strategy a year ago, hoping to reignite the stagnant economy through innovation. The Commissioner proclaimed boldly that the cloud must “happen not to Europe, but with Europe”. And rightly so. A year later, three GigaOM Research analysts from Europe Jo Collins (Inter Orbis), George Anadiotis (Linked Data Orchestration) and Rene Buest (New Age Disruption) – moderated by Jo Maitland (GigaOM Research) – take a look at who the emerging cloud players are in the region and their edge over U.S. providers. We dig into the issues for cloud buyers in Europe and the untapped opportunities for providers. Can Europe build a vibrant cloud computing ecosystem? That’s a tough question today as U.S. cloud providers still dominant the industry.

The free GigaOM Research analyst roundtable webinar “The Future of Cloud in Europe” taking place on Tuesday, July 9, 2013, at 8 a.m. PT.

Questions to be answered

  • What’s driving cloud opportunities and adoption in Europe?
  • What are the inhibitors to adoption of cloud in Europe?
  • Are there trends and opportunities within specific countries (UK, Germany, peripheral EU countries?)
  • Which European providers show promise and why?
  • What are the untapped opportunities for cloud in Europe?
  • Predictions for the future of cloud in Europe.
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The Deutsche Börse starts its own cloud marketplace to care for standardization and more trust in the cloud

At the beginning of 2014, the Deutsche Börse will step into the area of cloud marketplaces and offer their own broker for infrastructure-as-a-service under the brand „Deutsche Börse Cloud Exchange AG“. As the basis technology, the company relies on the German cloud management provider Zimory with which they also founded a joint venture.

Independent cloud marketplace for infrastructure services

The cloud marketplace will start in early 2014 and serve as a marketplace for cloud storage and infrastructure resources. In order to realize the technical side, the Deutsche Börse has established a joint venture with the German cloud management provider Zimory. Thus, Zimory will have the responsibility to ensure that all customers can seamlessly access the cloud resources they purchase.

With the cloud market place, both companies focus on the public sector as well as research institutions, which require more infrastructure resources such as memory and computing power on demand, or even have excess capacity and would like to offer in the marketplace.

The Deutsche Börse Cloud Exchange is organized as an international and vendor-neutral cloud-marketplace and is responsible for standards such as product offerings, the admission process, changing suppliers and the warranties of the purchased resources. Customers should be able to choose their providers freely and thereby be able to decide in which jurisdiction the data is stored. For this, the specifications and standards as well as the technical provisioning is aligned in close collaboration with the participants of the marketplace. As potential partners, the Deutsche Börse Cloud Exchange named cloud providers from the traditional IT sector and national and international medium-sized enterprises and large corporations. These include inter alia CloudSigma, Devoteam, Equinix, Host Europe, Leibniz data centre, Profi AG, T-Systems and the TÜV Rheinland.

Comment: An independent and standardized marketplace provides more confidence in the cloud

A cloud marketplace as the Deutsche Börse is offering is basically nothing new. The first marketplace of its kind was launched as Spotcloud by Reuven Cohen. Even the Amazon Web Services provides the ability to trade, based on their Spot Instances, with virtual instances. However, it is a proprietary marketplace. And that is the crucial advantage for the Deutsche Börse Cloud Exchange, it is vendor independent. Which certifies a greater range of resources and on the other hand more confidence by the dependency is resolved to a single vendor. Another credit of trust the Deutsche Börse provides itself. Those is trading in its context all along with securities, energy and other raw materials as virtual goods. Why shouldn’t they do that with virtual IT resources. The Deutsche Börse is therefore the face to the outside and take care for the organizational safety and awareness, whereas Zimory is responsible for the technical execution in the background.

Another important fact, which maybe a key to success, is the topic of standardization. Since the beginning of the cloud the discussion is on „standards in the cloud“ and who will care for THE standard. With the Deutsche Börse Cloud Exchange we maybe have found a serious initiative from the industry, which will ensure that there will soon be a uniform cloud standard. This of course depends on the appropriate involvement of the cloud provider. Nevertheless, the first partner ahead CloudSigma, Equinix and T-Systems (is also using OpenStack in some of their services) show their interest in this direction. In this context it is to be seen how the open cloud community is set up for this purpose.

In the first version the Deutsche Börse Cloud Exchange will be a pure marketplace for cloud infrastructure. A next evolutionary step should be to take also external value-added services within the marketplace, with which the infrastructure resources can be used effectively to motivate developers using the resources to create new web applications and backend software for mobile apps. Furthermore, the market place should be set up as a true cloud broker.