CRN roundtable discussion: SMBs in the cloud

Robert: It really is and I’ve been surprised. I’ve been kicking around the industry for quite a while, and I went through the whole data centre consolidation phase, where people were pulling data centres apart and I find that service providers are building multiple data centres, because of security requirements and data legislation relating to state based initiatives.

So if you are dealing with any state based governments or health organisation, they require the data restored within states, not just within the physical confines of Australia which was the traditional approach. So there seems to be an ongoing issue around clarification about what that actually means.

Stephanie: There are certainly a lot of challenges we’ve seen. As you say John, and with government departments in particular, there’s legislation that doesn’t allow them to move offshore. We’ve seen ourselves scenarios where customers have gone and looked at different quotes between an onshore and offshore solution, and they’ve been quite adamant that they’ve wanted something local, but when it’s really come down to the price, the decisions change quite rapidly. So I think that’s quite a factor with some companies as well.

CRN: So data jurisdiction matters in Australia if it’s cheap?

Stephanie: In some cases.

Simeon: I think if you’re talking genuinely about SMB, SMB as a whole tend to be less concerned about jurisdiction than enterprise in certain segments. 

Roy: Another thing is latency. It’s not always about having the cheap service offshore. It doesn’t matter how good the network is, latency is always going to kill you. You have got to host onshore. So it’s the two that come into play.

Tony: A parallel conversation is not only about data security, but data access continuity. A tin reseller with a sniff of cloud gets a killer customer to say ‘yes I’ll buy your managed service’ on the back of a very flimsy proposal and all of a sudden that reseller is a mini services provider, or a cloud provider, and quite frankly, we as an industry have a responsibility to build standards and regulation around what is a robust cloud solution, what is a robust cloud provider, because we’re putting data, we’re putting company applications and company performance, into a third party environment, almost with no control.

There is no current regulation or standards based approach to providing a cloud solution. 

Robert: IBM’s response to that is that they actually developed a certification program for channel firms around becoming cloud builders, organisations that want to design, build and manage private cloud environments for example can join an IBM certification program to enable them to develop and acquire those skills that will give them that credibility in the marketplace, and help us to achieve some of the standards.

Simeon: Some of the conversation we have about hybrid cloud and virtualising applications is still a bit esoteric for a lot of SMBs. When we go out to the market, the discussions we’re having are actually quite simple ones, around ‘wow my server is three years old, I’ve run out of capacity, I need a bit more storage, I need to on-board more people, it’s going to cost me 30k to go out and buy a new server and migrate to the latest software’ – or ‘I want access from a wireless device to my email, but without having investment in a data centre and IT staff’.

It’s just that level of conversation that partners are having today with customers, and providing outcomes, rather than having a technology deep discussion – it’s more about the outcomes and solutions.

John: Why is that an esoteric conversation? Australia and New Zealand are the most virtualised countries in the world. We are more advanced with this journey through the cloud than any other nation on earth. So I think people are quite used to the idea of virtualising servers, they’re quite used to the idea of virtualising applications, and I think they’re quite ready to make this change, this transformation that you’ve all been speaking about.

The challenges that I’ve heard today, from what I can see, are very small speed humps on a long journey. I don’t think there are any issues today that we’ve thrown up that we in this room don’t have the ability to fix, to be honest.

We have the ability to control the conversation, and to assist the partners in the role that they play in this transformation as well.

Roy: And more so for SMBs this is probably the biggest game changer in the SMB market.

Simeon: To respond to that, and I absolutely take your point John. This discussion is about SMBs. My view and Telstra’s view of SMB, we’ve got a million SMB customers, and the range of size and complexity and depth of IT knowledge is vast. So we are dealing with a lot of small businesses that don’t have experienced IT staff, so the discussion just does not and cannot get down to that level. We want to keep the very high level of solving solutions about fixing the cost, changing capex to oppex that’s the discussion we have.  

John: The reseller community are the advisers in this stuff, they sold the infrastructure they’re there to lead the SMBs on this virtualised and SMB journey. They are the guys who will solve that problem.

Geoff: One of the challenges of course is that the conversation with the end user, or with the client, is not so much with the IT manager or IT adviser, it’s actually with the financial controller, the CEO, because this represents strategic change, not just technology change.  It’s not about ‘do we go to the next version of the HP box?’ I’s about do we invest in that box, and that’s where you’ve got to be somewhat agnostic in your approach to say ‘where are you at as a business right now, how much risk do you want to take, will the public cloud threatening to screw your business at any given time. 

CRN: The average IT manager with a small business needs to be involved in that conversation, but are they not a little bit afraid and scared about this transition – is that what you are all finding with the feedback you’re getting from businesses via your partners?

Geoff: A lot of IT managers are afraid of what it’s going to do to their role in the business, and my conversation with them is always first start thinking more like a CIO than an IT manager, because you’ve got to think more about managing your suppliers, partners, your strategy, rather than keeping the lights on, network running and so forth. So it is a challenge, but I think over time it will just roll through as this becomes more and more of a standard.

John: The IT manager’s role is evolving probably more rapidly than any other job specification related to the cloud transformation I think. Traditionally you think about 5, 6, 7 years ago, the IT manager controlled the entire end to end point of the infrastructure – what applications we used, what hardware we used, what devices accessed it, what the operating environment looked like. Think about the environment that we’re in today with smart phones and iPads and iPods and blah blah – end users are determining what the infrastructure actually looks like – they’re bringing their own devices in and saying ‘this is what I choose to use, connect me’.