Discussion is still raging about how one should define a private cloud - is it an evolution or a revolution of a data centre, should it be on premises or offsite, or does it exist at all? In the meantime the market has decided that not only do private clouds exist, they are a good idea and they would like one pretty soon.
This CRN Fast50 roundtable asked how the channel was going to deliver a private cloud as defined by customers.
Sholto Macpherson, CRN: Only a few months ago we were discussing virtualisation but now the conversation has moved on again to the concept of the private cloud. Of the components involved, virtual servers seem to be understood. How does storage fit into the private cloud?
Darren McCullum, EMC (pictured below): Most organisations and partners we're working with now are looking for storage that's not just resilient and performs and scales and is flexible and all the good characteristics you'd look for, but that is relatively easy to deploy, easy to manage, is flexible in what it allows you to do and it has to integrate with the other pieces in the infrastructure stack.
David Lenz, Ingram Micro: The thing to remember is we're on a journey. 2009 was the year in which server virtualisation was the hottest topic in town.
We go into this year and we're starting to see cloud, which is the augmentation of that, go from server virtualisation to the complete data side of the cloud which starts to build out storage, etc.
So if you look at it from our perspective today, storage has been growing across all our vendors. There has been no slowdown in our particular part of the marketplace - IBM, HP, EMC, there's been strong growth in that storage market.
Ricardo Lamas, IBM: The market is feeling the pain. the storage shipments have grown 54 percent a year, so it's huge. We cannot sustain 54 percent growth because our data centres are not going to have the floor space, the loadbearing or the power, therefore we need to be smarter in the way we approach not only storage but everything, infrastructure - it's at a premium.
CRN: One of the first questions for customers who have virtualised their servers might be "what do you want to virtualise next?"
Lamas: The most important thing is to understand what we're trying to provide to the customer.
What are they looking for? They're looking for a certain set of attributes that they see embodied in something that they call cloud.
What do customers want to achieve? We are going to end up, I think, using the technologies that we have available to start them on the right path, because when we are talking about cloud in the end we are talking about a new way of delivering IT services, storage, server. We are not talking about a new and revolutionising technology.
Roy George, Express Data: I like your definition, the elasticity and pay per use is a critical element.
The challenge with that is the technology is changing so rapidly - the storage, the virtualisation, the networking, a component of shared infrastructure - the challenge with that is the customers are unable to keep up, so what is the opportunity the resellers have? When we speak to some of the resellers they do provide managed services today so the customer hosts their kit and they come in remotely and manage it for them.
But increasingly I'm seeing resellers starting to set up managed hosting services, so they're starting to take over the complexity from the customer and provide hosted services.
We're seeing a middle layer of service providers creeping up between the customer and the vendor. So that's challenging in a way because who is your customer now?
Next: The middle of the sandwich
The middle of the sandwich
CRN: We've got two resellers here - Mark Illot from Anittel and Craig Somerville from the Somerville Group. Do you see resellers' role being the middle of the sandwich?
Mark Illot, Anittel: Well that's effectively what we've always been but it's perhaps becoming more obvious from a hardware point of view now in that we either own it or fully manage it, whether it sits on premise or in our data centres or in someone else's data centres.
In the SMB space, which is typically where we play, they're not asking us for cloud, they're asking us to take these problems away. Many of them are just absolutely sick of buying hardware - and I know there's obviously a few vendors here that may not want to hear that - but they're telling us they don't want to do it anymore, they just want that issue to go away, and that's where the cloud is a good fit for them.
Christian Bertolini, APC: Apart from your own infrastructure, would you go to market for those new companies that are providing public cloud services and resell their services?
Illot (pictured below): If we had to. Our choice is always going to be to build our own and that's just where we're at in the market. There are certainly others that will need to resell and sometimes it may be right for us as well.
CRN: It's a big ask, a partner buying all the hardware for a customer to rent back?
Illot: Well it is, yeah, and for many resellers it's not going to be possible for them to be buying their own hardware and doing that. So there are obviously going to be other providers out there that resell that hardware, that cloud service, that on-demand service to resellers and then on to the end-users.
George: Also from the resellers' point of view it becomes more complex because the more diversity they have in the product offering, the more certifications and things like that they need to keep up and that takes a significant amount of resources in terms of people, training time, certification time, because you need that to be able to manage and service the equipment.
Craig Somerville, The Somerville Group: For those resellers or integrators that are going to build their own infrastructure, to some extent the smart ones are going to partner. I'm not going to become certified in every member's product because it's not valuable for me to do so, the return on investment is not there - but that's not to say I won't host their services in our cloud and we won't deliver them. It's about us partnering.
There was a question about would we use a public cloud provider as a service provider ourselves building infrastructure - if it makes sense, of course we would. We don't build infrastructure if we don't have to.
Building infrastructure is not a trivial task. Any service we invest in or turn on from a cloud perspective has an upfront cost, it has a running cost and a return on investment and each needs to be taken into account.
There's certainly a level of "I don't want to buy it off someone else because that's what we do", but I think we're starting to mature a little bit and go, hang on - at the end of the day, who is the customer? If I'm providing a managed service to a customer then it's not an IBM service or an EMC, it's a Somerville service that we're turning on and delivering to the customer - I'm the one taking the responsibility, I'm the one that holds the T&Cs, so it's my service.
What I underpin that with is my responsibility, I'm the one with the contract.
Next: Private clouds - on premise or hosted?
Private clouds - on premise or hosted?
Bertolini: A question for the table - do you see how the private cloud business going to the SMB market as high-density racks that sit on premises?
Somerville: Yes, more and more...
Bertolini: Is that the majority of private cloud?
Lewis Prosper, Novell: Look at the internal cloud - it's really about provisioning. Is it self-service to the actual end-user or a set of developers that are going in and developing that so you can reduce those costs of IT?
Somerville: The reality is the mainstream computing services that most organisations need aren't going to be turned on now and turned off later. Dev[elopment] - absolutely. We've got a new application, we're going to fire up 30 machines, put a development application in place, turn it off at the end of it - that's metered usage.
But in terms of true business applications, an organisation implements and runs an application and most of the time it takes two years to get it in. It's not, "oh, we'll change that now and do something different".
Lenz: Yes, I think what you see in the industry is more point related solutions have come out which are filling that space. You go to the States today, Amazon.com is predominantly running test and dev, that's what they do, so people will outsource it. Why buy it when there's a whole bunch of infrastructure there you can use today? You've got various applications that are very specific to the needs of a requirement, like Salesforce, but you're not seeing a SAP model out there.
CRN: That's an interesting split though. If Amazon is going to make test and dev its specialty then maybe it could handle the difficult business model behind a pay per use service and leave line-of-business applications to channel? Then resellers would have solid, 12-month-plus contracts with some predictability around financing the capital infrastructure.
Ian Hume, Dell: I think the Australian channel, at least in my experience, wants something where the infrastructure will scale, where they have an agility; they're looking at vendor-agnostic infrastructure as well, heterogeneous environments - that's a key question, there's no lock-ins, it's not proprietary.
Prosper: I think you would typically not have your mainstay line-of-business applications going out, but there may be some times where you experience perhaps end of year or you have large scale reporting needs and you need to expand that computer power and you don't have it... The two-rack system that is fully redundant doesn't have enough grunt in there to be able to process this. So at those times you could go out and rent the space, do all the processing and come back in.
Lamas: When we are talking about pay per use we are saying reduce the cost of IT. The customer is labelling it differently. It's important to have an agreement of what's the view of the market because realistically the market will drive the final inclination of whatever we want to call cloud. That's what cloud is going to be.
This is, in my experience, one of the few times in which the end consumer is dictating absolutely what's going to happen, because they have a very clear view of what their objectives are, they know what they want. They are defining the standards, not us. We're helping them but they are driving.
Somerville (pictured below): Especially in the smaller organisations a lot of those guys don't spend on many things that are important when you run IT infrastructure - like backup, for example.
CRN: SMBs think backup should be free, right?
Prosper: The little guys who are not yet ready to go into the cloud are looking to the cloud to provide those backup services, so DR (disaster recovery) as a service. I think that's one of the biggest things growing that we're seeing anyway...
Somerville: That's all in their budget today, so it's just a change in the way they do it. We're not so much playing in that really little space but we've had a couple that have come onboard and it's amazing how easily they'll go "oh yeah, we'll put our stuff in the cloud". They haven't asked one question about the data, if I lost the data, am I backing it up? So we're dabbling with a few little ones just to see really what the reality is down there. But a real organisation can't do that.
Lamas: They make an assumption about the service that's provided. We have a very sophisticated market in Australia, one of the most sophisticated in the world, that's why many of our biggest customers are in the standards body, for example, and they're driving those. But in general terms worldwide many customers do assume certain services come with the cloud.
McCullum: There's assumptions around certain services and there are assumptions around levels of availability, people just perceive it will always be on - like Gmail.
Illot: If you delete all of your email out of your Gmail account accidentally how do you get it back?
McCullum: Ask Google!
Bertolini: Talking about the assumption of availability - do we think as power and cooling providers should we provide UPS instances and cooling unit instances so when a user goes online to purchase a server instance, for example, he can choose whether it's an n redundancy or n+1 or 2n power and cooling?
McCullum: They would assume that power and cooling is the service provider's issue, not mine...
Bertolini: But there would be different pricing structures. For example, I think about Amazon, you can buy a micro-server for a few dollars a month, so you could buy one UPS instance, for example?
Lamas: Realistically the guys that are in the outsourcing business know most about this but when we are talking about facilities at that level, we are talking about investment planning and infrastructure that is on the floor.
When we're talking about virtual images we're talking about software, so it's transient. But you are not wanting to have some part of the infrastructure that is n and some part that is n+1, it would be too expensive...
McCullum: Our partner community needs to help their customers define what success looks like - their service catalogues, the attributes and what makes those things up, what the customer is going to be deploying, what the partner is going to help them deploy.
So if the partner community is helping customers define what success looks like and we're underpinning that with the right technology and infrastructure decisions, then we've got a valid proposition.
Illot: When you say what's the cost of your downtime, you could do some calculations for them and help them through that. Most don't understand what the cost of that downtime is but they certainly understand when you say here's the proposal for three nines (99.9 percent availability) and here's the proposal for five nines (99.999 percent availability). There's a massive difference in price and they understand that quickly...
Next: Limit your financial exposure
Limit your financial exposure
CRN: In building their own infrastructure for customers, resellers are taking on a lot of risk and the market is moving very quickly. It makes it difficult to know which platforms to choose. How did you make your decision and what did you take into account before you made it?
Somerville: You can only make each decision based on a business case. So each time you make an infrastructure decision you sit down and you make the evaluation based on what opportunity is sitting there as well.
I would suggest most of the integrators who are moving into that space would be making more pointed solutions, as opposed to going, I'm going to build a big cloud infrastructure and go to the world and say here it is, come and use it. We're building infrastructure [where] we know [it] is specific to a set of customers or a customer base that fits their need.
CRN: And they've signed a contract for that?
Somerville: Well, no, sometimes we build it before that. But also it's about building a platform that's scaled...
Illot: It doesn't matter when you build it, it's got to be customer-led. You need to be providing something that your customers want.
Bertolini: Do you include power and cooling in your solutions?
Somerville: It depends - if we were to go and take rack space in somewhere like Global Switch, we don't need to worry about it if we're just buying by the rack. But if we go and build infrastructure in our place, which we're doing, then yes we have to take that into account.
And again, we've just been through the process of doing the numbers. I can go and get 10 racks here or I can build and put 10 racks in here. Do the numbers. It's actually an interesting thing to go and do...
CRN: You say the numbers are interesting - what's interesting about them?
Somerville: Well a rack in a data centre is one thing, a rack with 10 kilowatts of power in a data centre is another. That's the reality.
If I use an HP example, a C7000 [HP Bladesystem] and an EVA [HP disk array] can use 10 kilowatts in a rack. So if I'm provisioning four racks to run a managed service platform then I have to assume I'm going to fill those racks, so I need 10 kilowatts a rack.
Then when you start looking at the economy of 10 kilowatts per rack in a data centre today and then do the numbers of building the data centre and you look at the per month cost, it depends on who is doing the pricing and where you are looking at your floor space and all those things to go with it, it's not necessarily forgone that you go and stick it in a data centre.
Bertolini: Can the banks help?
Somerville: They can help by dropping their interest rate! (laughter)
CRN: I'll let them know.
Somerville: Yeah, can you do that?
CRN: There's an interesting point there where you say it's customer-led but not necessarily covered by contract, so you are still taking some risk. What if a cheaper technology came along next year?
Illot: That's the nature of our industry; it doesn't matter what you buy, it's always going to be cheaper in 12 months' time, and faster and better and bigger and all those things. You can't wait forever...
Somerville: Everything we do as an integrator in this space is a risk. We sign with a vendor and decide we're going to become a partner and we invest 50 grand in training certification and all that. That for us is a risk and an investment. If we don't go and pull the revenue to pay that risk, that's what we do and that's what we've always done and this is just a different flavour of the risk that we take...
Illot: If you don't take those risks and make bets every now and then, hopefully educated bets, but if you're not doing that every now and then your business doesn't grow, it's as simple as that.
CRN: I read a blog recently about a consultancy called Cloud Scaling which builds cloud infrastructure for enterprise and ISPs like NTT in Japan. The blog talked about the commoditised cloud versus the enterprise cloud and said that their approach using commoditised IT is as effective as enterprise IT and yet cost a tenth of what you'd get by doing it with Vblocks, for example.
McCullum: Bad example. (laughter)
CRN: Yeah, I wasn't going to use it.
McCullum: But is he comparing capital costs, like what it costs to acquire, because he's sunk a lot in R&D in investment in building that out himself?
CRN: I think he just tells them what to spend...
Prosper: In that sense it is commoditised hardware, it's a low-cost, zero-cost hypervisor on the Xen platform, typically with a Linux platform running on top of that. So you start looking at the cost of that and it's actually quite inexpensive.
Lamas: The problem is that was a very broad statement. Where are the numbers and then we can talk because maybe we are talking about different things.
CRN: The theory seemed to be that if you have many cheap servers it doesn't matter if they fail because you make it up by the numbers, versus buying a best-of-breed approach.
Lenz: The other question is, have they done the old "build it and they will come" model, or is there a business case around what's actually being put out there today? I think you'll find a lot of people building cloud services today have really got a fairly strong business model, but you've got a lot of people who invest a lot in a truckload of iron and views that people are going to come to this type of thing, and I think there's a balance...
Somerville: It's really easy to fire a virtual machine up. You want a virtual machine with 100GB of storage, no worries, there it is tomorrow. Replicate the data under it, sign a contract to say if I lose it I'll bleed, and suddenly cost is associated with it.
There'll be tonnes of those offerings out there but if an organisation says my business runs on my data, prove to me that I'm not going to lose it, there's a cost [to] that.
It's not that they can't do it but that would build the cost of that service. You can always go and get something cheap - you can go and buy a cheap motorcar, no worries - but is that delivering your requirements and expectations?
Lamas: The cost curves cross. Maybe it's cheaper, I would like to see the numbers but I'm sure different inflections occur. They are going to meet at some point, maybe in one year or two years' time, one is going to be cheaper than the other.
CRN: I was interested to see that Tata in India has just started its own competitor to Amazon Web Services. I thought if they're charging in rupees it's going to be interesting, but actually the numbers are almost exactly the same as Amazon.
McCullum: That goes to my point earlier on - as vendors and partners [we need to be] working with customers to define what the requirement or success looks like.
If success for a customer or partner is purely price and McVMs, swipe your credit card and get it and trash it when you don't need it anymore - if that's success then go and do it.
If success is high levels of availability and predictability and a range of other different characteristics then that would drive different decisions and different purchasing potentially.
Hume: I would suggest that an Australian channel is quite mature, so price is less and less a consideration for the enterprise. So it's about agility, speed, flexibility and aligning that to the business...
Next: The advantage of being local
The advantage of being local
Somerville: Local data storage is very important for local providers because we have a stable government, we are politically stable, we have a stable power grid, we have all the things that say if you have data in a data centre here it's pretty safe and low-risk. So there's value to that. If we're to compete against a provider who is going to host their data away that's one of the first things we use.
Illot: Yes, we certainly use that to our advantage...
Somerville: You don't want to go and fight for your data in the court of law in Singapore.
George: I was telling [a bank] about Softlayer buying The Planet [hosting companies in the US] - one of the services was you can pick which country you want your data to reside as one of the options...
CRN: How does the customer know where it resides?
George: I have no idea...
McCullum: How do you prove where it's running, how it's running, and if I want to take that back how do I do it and know it's housed here in Australia? Trust us!
Lenz: One of the big opportunities for a lot of the resellers in Australia is that most companies will go to their trusted advisor to have a conversation and that will lead into other services.
The concept that people had around the cloud, they'll go to 27 providers to get all their applications to run, maybe in the future if provisioning works. But getting back to the original point, I want one throat to choke.
McCullum: You're trying to bring it back to the Vblock conversation, aren't you? (laughter)
Lenz: I think that's a very important thing, I think that's the opportunity. With all the noise going around, at the end of the day there is an opportunity for resellers to offer services, whether they're physical or virtual, to their customers but they need to have a strategy on how they're going to handle it...
McCullum: It's interesting - we talked about the Amazons and Tata or whoever it is setting up public clouds en masse. But the more we talked about real business applications, regulatory requirements, security, data privacy, all those sorts of things, the more it brings it back down to earth and you have to look at real solutions.
Having a mass scale out commodity hardware platform built in India, is that going to service someone's business, regulatory, performance requirements?
Prosper: If there was someone out there in the market who could provide the governance, who is accessing your data, where your data resides, then that would solve that. Luckily, as a plug for Novell, we have that.
Lamas: There is a continuum of solutions and basically we are taking just point views within the continuum. There is going to be a huge combination of things and some customers are going to be outsourced, some customers are going to be a mix of both...
Lenz: The IT industry will continue to grow - that's the one thing that comes out of all this. We're one of the most over-outsourced countries in the world, and one of the most virtualised as well, and yet our industry is still growing.
CRN: Don't you think this trend towards private cloud is going to allow resellers to grow in scale, so the industry may grow but will the channel grow?
Lenz: Absolutely the channel will grow.
George: But it will increasingly be solution-centric rather than product-centric.
Somerville: Yes, but we'll become your customers, your worst nightmare! (laughter) If you think your customer base is already sophisticated, well when your customers are resellers, they're going to be even more sophisticated.
Somerville: There will be front-page news items coming in 12 to 18 months that will be about X company which hosts data goes down and its customer has no data and now they're dealing with a liquidator. Theywill become front page stories that's going to change people's view.
CRN: So the first reseller that goes under, are your customers going to look for reassurance?
Somerville: Let's hope it's not me! (laughter)
CRN: What will you say to your customer?
Illot: You cross that bridge when you come to it.
CRN: One of the things I have heard is that there's going to be more sharing of financial data; the customer will say they want access to your books at some level to see how the company is performing.
Lenz: There is no difference - the financial viability of a reseller is a conversation a customer would have today. I think this is not new. If I was a customer with a company which has just started out I would probably be having a bigger conversation with them around their business plan, their direction and all the rest of it, and I'd be taking a risk as a customer by jumping into bed with that particular account.
But if I had a long-standing relationship with Somerville I'm not going to immediately say to Craig that I want to see his books.
CRN: One last question - how are you pricing SLAs for private clouds?
Somerville: We have a sophisticated customer base and those who want it often ask for redundancy. A customer will come and investigate or put a tender out to move their services into the cloud and often that comes with a whole host of specifications - I want two data centres, one in Sydney, one in Melbourne, I want (a certain) amount of guaranteed bandwidth, I want a data centre at this rating. So often the smart customers are actually coming and saying this is what I want, tell me how much that's going to cost me.
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