OK – time to take it home.  Hopefully you've already read my first and second post for SaaS CEOs, and now I’d like to finish up the final five tips for taking your applications to the cloud. 

I'd also like to ask you for feedback on what you think and whether you think I’m on the right track.  Please feel free to challenge and question me in the comments field below.


Tip #11:  Set financial penalties for downtime:  I agree, there should definitely be some financial incentive for the Cloud provider to perform for a couple reasons:  

Tip #12:  It takes time to see ROI on SaaS development:  Sage advice from Adam on this one – it’s going to take time and a concerted effort to make Software-as-a-Service (SaaS) pay off for you.  His comments make me think about focus.  Our experience is that many SaaS companies have little to no experience running a hosted infrastructure – so that skill must either be hired or acquired.  Hiring people is hard, so I might argue (because this is our business) that SaaS companies can get further, faster by focusing on writing the code and driving demand, while leaving the hosting to experts like BlueLock.  That’s exactly what SaaS company Right On Interactive did – they focused on writing better code and allowed us to help them get further, faster by managing their infrastructure.  Check out their cloud computing case study.

Tip #13:  Savings are not in the cloud, but in headcount:  Oh man, I wish I could make this tip #1!!  Adam hit the nail on the head.  I’ve presented an infrastructure choices presentation to Rick Chapman’s Softletter SaaS University conferences several times and I tell the Software CEOs in the room that one of BlueLock’s key value propositions is about people.  I even take them through a little back of the napkin math around the difference in cost of 5-10 servers doing it on your own, doing it at Amazon or hosting it with BlueLock.  BlueLock wins and I tell the crowd that you could substitute BlueLock for another managed cloud provider because it’s not about my ability to pay my people less, it’s about my ability to “fractionalize” our labor cost, where they must have a full time equivalent (FTE) or 2 (if that person wants to take a vacation) or 3 (if you want 24x7 coverage and let someone take a vacation or get sick).  So the software company that has dedicated staff to “manage” their cloud environment at Amazon is, in the end more expensive, than allowing me to manage their environment for them at BlueLock.  If you’d like to see the analysis – send me a note at bwolff at bluelock.com and I’d be happy to share the slide and take you through my logic. 

Tip #15:  Let the cloud lead you to new innovations:  This last tip takes the previous tip and Lincoln’s presentation to the next level.  Companies that choose to deliver their software via SaaS (in the cloud) open up many new opportunities for revenue and value creation. The first step toward opening up new horizons for your software company is to migrate to SaaS and let the users take you to a better place.  The cloud will only continue to get better, and SaaS companies taking advantage of the benefits of cloud computing will be leaps and bounds ahead of their competition in terms of cost efficiency and flexibility.

Thanks for reading this post – if you’d like to learn more about how BlueLock is helping enable other SaaS companies just like yours, drop me a note at bwolff at bluelock.com or visit our website to find out more about our cloud hosting services. 

I would also love to hear what you think about my take and if you think I’m on track or “off in left field”.

--Brian

BlueLock has been named to Nine Lives Media Inc.’s third-annual MSPmentor 100, a
distinguished research report identifying the world’s most progressive managed service providers.

“We are honored to be recognized by MSPmentor as one of the world’s most progressive managed service providers," said John Qualls, President and CEO, BlueLock. “We believe our selection is recognition of our continued company growth over the past year and further validates our business plan and the market’s need for different classes of managed IT and cloud hosting services. Three years of cloud experience has allowed us to deliver true cloud computing services that enable developers to Fortune 500 enterprises to deploy and operate their applications on a highly available and scalable platform that is tailored to the
needs of their apps.”

The free MSPmentor 100 report, available at www.MSPmentor.net, is based on data from MSPmentor’s global online survey, conducted October through December 2009. The MSPmentor 100 report recognizes managed service providers based on a range of revenue and management metrics.

Founded three years ago, BlueLock was one of the country’s first providers of Infrastructure-as-a-Service (IaaS), enabling companies to provision and manage their technology infrastructures more efficiently and cost-effectively. Delivering pre-configured, secure and resilient virtual IT environments which scale ondemand,

“Despite the challenging economy, MSPmentor 100 companies generated more than $700 million in combined recurring revenue and managed services revenue, up 31 percent from the companies’ combined results in 2008,” said Joe Panettieri, editorial director, MSPmentor. “Our report also reveals how MSPs are already profiting from SaaS and cloud services.”

MSPmentor, produced by Nine Lives Media Inc., is the ultimate guide to managed services. MSPmentor features the industry’s top-ranked blog, research, Webcasts, and FastChat videos. It is the number one online media destination for managed service providers in the world.

Over the past two years, BlueLock and Apparatus have built a strong and dynamic partnership with their complimentary virtualization and data center expertise.  By joining forces, the teams are able to work together to wrap services around BlueLock's cloud hosting solutions to better serve clients.

Due to our great success together, VMware asked BlueLock (a VMware Hosting Provider) and Apparatus, to take the stage during the keynote session at this year's VMware Partner Exchange to share our story in front of 2500 conference attendees. The VMware Partner Exchange is an annual partner conference dedicated to educating and enabling partners for success with VMware. 

Brian Wolff, VP of Sales at BlueLock and Casey Watson, Chief Evangelist at Apparatus went on stage and showed the virtualization community at the Las Vegas conference what Indiana's technology Community is all about - innovation, trust and execution.  That's right, Indianapolis is a virtualization hot-bed.

The week of the 2010 VMware Partner Exchange (PEX) was one of great accomplishment.  The conference started out on Monday Feb. 8, the day BlueLock launched BlueLock CloudSuite, a comprehensive offering of cloud hosting solutions.  The news took off and the PEX excitement began.

Kim and I drew large crowds at the BlueLock booth as we challenged visitors to test their "Cloud IQ."  Many walked away with enough points to earn a Starbucks gift card while other weren't so lucky and had some studying to do!

While we manned the booth, BlueLock's executives kept busy with many of our current partners such as Consonus, F5, DoubleTake Software, and of course, VMware representatives.  BlueLock's engineering and development squad, which was filled with a few new faces to the BlueLock team, found great value in the training breakouts and the time they spent with other virtualization experts from around the globe.

Tuesday morning, BlueLock's VP of Sales, Brian Wolff and Casey Watson of Apparatus took the stage at the PEX keynote address to spread their knowledge and expertise around creating meaningful and successful partnerships between cloud hosting providers (BlueLock) and managed service providers (Apparatus).  BlueLock and Apparatus have worked together in a number of cloud hosting projects with great success.  That success stemmed from each company doing what they do best while creating a partnership of understanding and strong communication.  Brian and Casey's participation in the PEX keynote helped to build heavy traffic at the BlueLock booth, which made Kim and I very happy!

Tuesday evening, BlueLock CEO John Qualls, CTO Pat O'Day, and Chairman Mark Hill attended an exclusive dinner to receive BlueLock's honors as Americas VMware Service Providers Program Partner of the Year and Global runner-up.  The following morning, the entire BlueLock team gathered at the regional breakout for the Americas where the award was announced in front of the entire congregation.


BlueLock was thrilled to receive such an honor.  We couldn't have done it without our expert team and our faithful clients who have made us who we are.  Congratulations to the entire BlueLock family and our friends, our clients, for a great year of accomplishment in 2009.  Here's to a great 2010!

flexibility, security, & possibly reduced capital expenditure…

By Jon Schackmuth

Savvy business owners looking to get in the cloud are looking for flexibility, security and reduced cost.

The underlying question is:  Can small and medium sized businesses find what they are looking for in the cloud at a price they can afford?

Let’s start with flexibility in the cloud.  Simply put, this is what the cloud does best.  When the marketplace changes and we all know it does, the cloud allows business owners to turn the dial up or down as needed.  As an example, if a business jumps from 1,000 hits to 50,000 hits on their website and it’s positioned at a cloud hosting company like BlueLock, running on virtual machines, they can call the 24/7/365 operations staff and spin up more virtual servers – scalability on demand.  Conversely, if traffic slows in six months, simply turn the dial down and pay for the services being utilized – the beauty of metered usage…

Now that we have established that the cloud is flexible, the true objection of the cloud must be security.  Security is paramount when it comes to companies like BlueLock.  If in doubt, schedule a visit and see the layers of security BlueLock has to offer.  BlueLock’s privately owned building is made of poured concrete with a steel and concrete roof.  The actual servers are secured behind six levels of security and are accessed on a need-to-know basis. - TOUGH.

The use of Check Point firewalls and SAS 70 certification is the gold standard in the IT world and BlueLock utilizes both to protect its clients.  Ask yourself:  Where are my servers stored and who has access to them?  What if your servers crashed today?  What is your disaster recovery plan and how long could your servers be down before you start losing one customer?  What is the value of that customer?  These questions may be hard to answer, but the results could save your livelihood.  BlueLock has all of them answered for you, 24/7/365.

At this point, if I haven’t given you enough to think about with flexibility & security, you are probably in the mindset that it’s too costly!  Consider the amount you pay for your infrastructure.  Excessive CAPEX (capital expenditure) can bankrupt a company faster than a lack of customers.  What does it cost to build your own data center plus a back up site and then maintain it at the level that allows you to sleep at night?
 
Depending on the situation, the business may be a start-up or they may be upgrading existing servers. If you are a start-up, what do a full time IT employees cost?  If you build for today and you hit the home run you planned for, your company may be crippled.  If you spend too much CAPEX on IT infrastructure, you may not have enough left over for marketing and sales generating programs.  Once the original hardware purchase has been made, switching to outsourcing and OPEX (operating expenditure) is sometimes a difficult decision.   At some point, enough is enough when it comes to excessive CAPEX - you may need to go in a new direction and outsource – you may need to put your business in the cloud.

Having been a small business owner in the past, I can attest to each of these topics.  Flexibility is paramount in any business, security is critical when clients trust you with their personal data, and cost overruns will bankrupt even the well-informed business owner.  Having choices in the cloud is something that hasn’t been available in the past… Until now.

Fresh off center stage at VMware Partner Exchange 2010, BlueLock introduced its latest surprise, BlueLock CloudSuite.  After years of offering a robust enterprise-level service, businesses can now have the flexibility and price competitiveness of the newly introduced Bluelock vCloud Express.  For those who want managed services with varying levels of scale, security, and performance - choose between Virtual Cloud Professional and Virtual Cloud Enterprise.  A business that requires onsite control of their own isolated cloud can try the Virtual Private Cloud, you own it and BlueLock manages it.

If you have questions about BlueLock's enterprise cloud computing options, please contact us.

Adam Stone over at Software CEO wrote a very timely article compiling the opinions of several respected industry experts into 15 tips for understanding cloud computing. 
I thought Adam’s article highlighted several ways that BlueLock thinks about the cloud differently (or the same in some instances).  I plan to break the 15 tips down into three blog posts providing my perspective on each point he makes.

Tip #1:  Be Careful how you use the term. 

Adam’s point is that “cloud is not cloud is not cloud” – so it’s best to think about what you need most for your applications and then look for cloud computing service(s) that solve those specific needs.  For example, if you need a better CRM system – you’re probably looking for a SaaS (software as a service) application.  If your developers are spending way too much time writing code for functionality that is not core to your software package – you’re probably looking for a PaaS (platform as a service) – an opportunity to use someone else’s code to extend your core software’s functionality (billing comes to mind).  If your developers or infrastructure team are spending too much time managing failed servers, network or patching OS’, or if they can’t keep up with the growth of your very successful company – you’re probably looking for IaaS (Infrastructure as a Service).

Tip #2:  Make the Trendy Pitch. 

The din of people talking about Cloud Computing is deafening, even Dilbert has gotten into the act.  No doubt, your CEO and CFO have even been thinking about the proposed advantages of cloud computing and how they might help the business.  There are ways for almost every company to leverage cloud computing.  There are most likely servers or processes in your company that could be improved by a provider of SaaS, PaaS or IaaS, so take a look around, find a business need and explore ways that a cloud provider might be able to help cut costs and increase efficiencies - this should make your CEO and CFO happy.

Tip #3: Take One Step at a Time. 

One misconception/mistake that I see over and over again is that companies evaluate sending their most mission critical systems to the cloud first.  You should think about your IT environments and applications plotted on a graph of concentric circles with your most critical environments/applications in the middle.  As the number of users goes down or the criticality of the applications or the amount of attention an application receives from your IT staff goes down, move those applications to the outer circles.  The applications in the outer rings should be the ones that are evaluated for cloud first.  There’s less risk, less integration (maybe) and a higher chance for success with these environments.  We’ve built a very crude tool (that will be refined over time) to help you evaluate your applications and where they fit on the “circle of risk."

Tip #4: Keep Your Eyes Wide Open. 

I agree, due diligence on the provider is key.  As the gold rush continues, there are many companies rushing into the space to claim their fortune.  Many will come up with sand and dirt when they realize there’s a huge difference between running a data center and running an entire infrastructure with many, many clients.  In addition to all the points that Adam made about the questions to ask, my experience tells me that time in the market as a cloud provider (not just a co-location provider) is one of the best indicators of stability and staying power.  You’ll want to choose a provider with minimum of three years of success as a cloud hosting provider.  It was around the 2-year mark when we really started to hit our stride around managing the scale of our cloud environment, stabilized implementation and refined the management of our capital effectively, proving we could run a profitable business in the cloud.

Tip #5:  Make sure to get live support.

We’re a live support kind of company – because it’s relationships with our clients that matter, however, I would take a slightly different angle on this.  This is where I’m back to the criticality of the environments/applications.  If you’ve chosen a system that is less critical to the business, it might be perfectly acceptable to use chat, email or other means to get support from your cloud vendor.  Of course, they have to be responsive, that goes without saying.  But if you’ve chosen wisely, you may not need to talk to someone in order to get your problem resolved.  One caveat of course is that if you’re going to run mission critical applications in the cloud – then live support is a must.

So that’s the first five points around understanding cloud computing – stay tuned for the next five.  If you’re interested in learning more about how we do things at BlueLock  - send us a note here.

Coming in future posts:

Tip #6:  To avoid vendor lock-in, stick to open standards
Tip #7:  Location, location, location
Tip #8:  Consider using a middleman
Tip #9:  Monitoring uptime isn’t enough, you need an action plan
Tip #10:  A clause may look good in the contract, but be useless in the real world
Tip #11:  Set financial penalties for downtime
Tip #12:  It takes time to see ROI on SaaS development
Tip #13:  Savings are not in the cloud, but in headcount
Tip #14:  Follow the cloud into new markets
Tip #15:  Let the cloud lead you to new innovations

*If you’d like to read the original post by Adam Stone go here.

Having worked in IT for over 10 years, I've seen my share of ugliness. It generally has taken the form of botched configuration files or ill conceived program interfaces. Looking back, though, nothing could top the server hardware upgrade for sheer wretchedness. Coordinating the downtime necessary to start the upgrade required gargantuan effort and endless compromise. Finding the correct parts sent the technician through an endless maze of charts and arrays of compatibility. Performing the actual upgrade was at least interesting and sometimes fun. Praying for the server to power up without a hitch afterwards was not. And still, the job wasn't quite done. Little tweaks were needed here and there, then we had test to ensure the server was ready to reenter the world of the living. All told, a weekend was probably shot and a few gray hairs were earned in the process.

Welcome to the virtual world, where we have left most of that nonsense behind. Businesses can now rely on a well-trained team of engineers to build a thriving environment of servers, each capable of hosting dozens of virtual machines. It's not hard to tout the benefits of cloud computing. Just look at the ease of a disk expansion.

At BlueLock, we can turn around a non-system disk expansion request in minutes. When a client needs more space, the system administrators need only a few clicks to make it happen. No more downtime or worry about compatible parts. Even a system-disk (boot disk) expansion requires only a single reboot and a few extra minutes of work.

Having this kind of flexibility allows a client much more freedom in the planning process for a new server. The focus returns to the core function of the server rather than the hardware, which is Bluelock's concern. With full monitoring in place, our team of administrators and engineers strives to be proactive. A client may receive a call about a potential problem long before they would have noticed any performance degradation. It's about uptime and performance. And that's just the beginning.

The ease of expanding drive space barely scratches the surface of the benefits of working in the cloud. I plan to outline many of those benefits in subsequent posts. Communicating the advantages of virtualization is one of the easiest and most enjoyable jobs I've had since jumping into IT head-first a decade ago.

Our goals at BlueLock include staying in the vanguard of cloud hosting, so we work hard every day to set the bar higher. I hope this blog will help explain some of the nuances, many of the developments, and most of the benefits of life in the cloud.

The hybrid cloud computing model has and will continue to gain traction as we move into 2010.   Recently, there has been a decent amount of buzz around the topic.  Hybrid cloud computing has been listed in many top prediction lists for 2010, including this one which claims to expect hybrid hosting to be the rule, not the exception.

Technology writer Michael Sheehan told Web 2.0 Journal that he believed 2010 would see the market for hybrid solutions, which combine aspects of private servers with public clouds, become more mature.  However, he also noted his uncertainty regarding which types of hybrid cloud solutions would make the biggest splash.

"Whether this be the combination of physical and cloud environments or, cloud bursting, or private and public clouds working congruently, there will definitely be a blurring of lines between what hosting is," he said.

Well, no matter which combination of cloud hosting solutions edges to the top, my prediction is that there won't be an all-out winner, but that each variety will solve problems for its own market.  Thankfully, BlueLock will be able to serve each variety: those who want to combine physical and virtual, private clouds and public clouds, or a combination of all four. 

Contact us today if you'd like to learn more about our hybrid cloud hosting solutions.

New to the idea of Software as a Service SaaS Virtualization? This video from Salesfor will help bring you up to speed:

This short video clip, produced by Salesforce.com, effectively points out that managed cloud hosting is a superior way to run your business. It's clear that multitenancy is simply a more efficient way to approach IT infrastructure.

For those of you who are new to cloud, some of the major benefits of cloud computing are that your data is:

• secure
• backed up in another location (redundant)
• not limited in storage or resources

To help you better understand Infrastructure as a Service (Iaas), Common Craft recently put out a cool little video that is put together like School House Rock for the 21st century.

You can check it out here: Cloud Computing Hosting in Plain English

I always keep an eye open for better ways to explain the benefits of virtualization and cloud computing to not-so-technically-inclined friends as well as potential clients. I found these quick videos to be expremely helpful in succinctly illustrating cloud computing hosting.

A recent email industry survey shows how businesses are reacting to email infrastructure being migrated to the cloud.  Osterman Research found that security-related email functions are dominating the software as a service market today and that the functions most likely to be outsourced in the future, if not already, include anti-spam, bulk email, anti-virus an anti-malware.

What factors are holding companies back from migrating to the cloud?  Findings show that more companies haven’t migrated to the cloud because of privacy concerns, data retrieval concerns (will they be able to grab that data back once it’s in the cloud?), because of regulatory compliance issues and because some companies are just plain scared of losing control.  However, upon a closer glance at cloud computing - a full-fledged look at what cloud hosting can do would show that cloud computing advantages include more choices, agility, control and protection than what a standard IT infrastructure environment can provide, which is why more than 20% of the users surveyed have outsourced their email functions to the cloud already.

Here are some of the results of the survey:

• 40% of companies surveyed are outsourcing some or part of their email infrastructure
• Anti-spam (64%) and bulk email (46%) are being outsourced by most companies
• Today:
  •  20% of users are served by a SaaS solution
  • 22% of email servers run as virtual servers
• In two years:
  •     38% of users will be served by a SaaS Solution
  •     49% of email servers will run as virtual servers

I think the two year projections are somewhat low, but the general growth towards using cloud hosting for email functions and/or using virtual servers is evident.  At BlueLock we’ve seen great success in migrating email to the cloud.  For many companies it makes the most sense to get email off of their machines freeing up space for them internally and getting their IT people working on more strategic applications.  Contact us today to learn more about migrating email to the cloud. 

Read the original post about the survey.

Rackspace recently released their growth numbers for their cloud computing services.  They are obviously very big and only hoping to get bigger like many other large clouds.  Large cloud hosting providers are great at what they do – offer cheap cloud hosting solutions with no frills and no customization.  When I say no customization, we’re talking McDonald’s cloud computing, not Burger King.

On the other hand, for those clients who don’t want McDonald’s cloud hosting, a big cloud computing company might not be better.  Let’s face it; Seth Godin really has something going in “Small is the New Big.”  Bigger companies tend to have lots of set processes, procedures, guidelines, systems and such that can get in the way of one big thing – the creation of client-specific solutions for even the most complex projects.  But there are some slightly smaller cloud hosting providers (with just as much stability, maybe more) who can better focus on the specific client's need to create just the right cloud solution.

A client with those complex needs for their important data and processing like higher up-time, disaster recovery, compliance and security, can’t go with the McDonald’s approach.  They need something more like Burger King.  Obviously Burger King doesn't offer cloud computing, but BlueLock does.  And we’re able to create cloud computing environments for our clients that fill their specific needs, not just the needs a "big" cloud computing company assumes they have.  So, if you’re an enterprise client, with big ole’ security and service requirements, you can still enjoy the wonderful benefits of cloud computing.  You just might not be able to do it with a huge cloud computing company.  But that’s why we’re here. 

Charles Babcock recently wrote an article entitled, “Hybrid Clouds Floating to Enterprise Forefront” which ran in InformationWeek.  He attended the Cloud Computing Conference & Expo, where speakers raised the prospect of private clouds working with public clouds, creating hybrid clouds.

The hybrid cloud is not a term we’ve never seen or heard before.  However, it seems in his article that there aren’t many providers out there actually doing the hybrid cloud approach with their clients.  But BlueLock is. For over two years BlueLock has offered a private cloud solution (The BlueLock Box) in conjunction with our public cloud hosting solution.  Our clients’ ability to have their own internal cloud which has the capability to spill over and utilize our public cloud when necessary has proved itself very valuable.  So yes, Mr. Babcock and the Expo speakers, the hybrid cloud computing approach is going to continue to gain traction.

For those companies who are fearful of “losing control” in the cloud, the private cloud approach is extremely beneficial because those companies are able to gain access to the benefits of cloud computing while still controlling their own infrastructure in house.  So not only is the private cloud a good starting point, but with the right cloud technology (like BlueLock’s), it doesn’t have to be the end of their cloud strategy.

Learn more about BlueLock's private cloud solution known as the BlueLock Box. Or contact a sales rep.

Watch our private cloud video.

Read the original InformationWeek article.

I love my job. As a client specialist at BlueLock, I get to spend the majority of my time working with the innovative companies that are producing the products and services of the future and, at the same time, pushing the limits of cloud computing hosting.

In all of my conversations with BlueLock clients, one thing is clear:

There is massive demand for a cloud computing platform, specifically for testing and development, that is cost-effective and integrates well with production environments.

Many businesses have data and processing that doesn't require a fully-managed cloud hosting service at four nines (99.99%) uptime.

Some companies offer services that seem like they could be a good answer for this problem. IBM recently released Smart Business Development and Test on the IBM Cloud, which seems like it might be a competitor of Amazon's EC2 cloud computing platform.

The problem with some of these test/dev clouds is that they can't support VMware hosted environments. This means that, with test/dev clouds like EC2 and IBM's new offering, a company that is running their production environment on VMware can't necessarily integrate their test and production environments seamlessly -- an important consideration when doing a cloud computing comparison.

Enter vCloud Express...

One of the cool tools that the BlueLock engineers are tinkering with is a VMware-based, pay-as-you-go option that will be ideal for companies that need an environment that is dedicated to test and development. We announced vCloud Express back at the start of September, and since then, have received an overwhelming number of signups for the beta-version. In fact, we acually completely filled up all of the beta test slots!

I'm excited for the public launch of BlueLock's vCloud Express, because we'll be able to offer clients the perfect solution for their test/dev needs. Until then, I'll keep you posted as we continue to progress. 

In order to continue the conversation about getting started in the cloud, let’s move on to step number two: comparing cloud computing vendors (to determine which best fits your needs based on the infrastructure and expertise inventory you took).

Getting Ready to Compare Cloud Computing Providers:
After looking into the amount of IT infrastructure you currently house and run as well as the people and expertise you need to manage it you should have a pretty good idea of what it takes to keep your company up and running.  From there you need to decide what kind of cloud computing solution you’re looking to use.  Is it something simple like an additional software-as-a-service account?  Or are you hoping to use PaaS to access some infrastructure?  Or better yet, does your company want to outsource its entire infrastructure to the cloud?

There are many options when it comes to “moving to the cloud.”  For this post we’ll focus on the migration to an infrastructure-as-a-Service (IaaS) cloud.  One easy first step is test and development.  This is a low-risk way to test out cloud providers and their capabilities while also making a decision around the type of infrastructure you prefer.  Do you want enterprise-level VMware hosting or is Amazon EC2 for you?  Do you want to be able to migrate between clouds and providers and if so, what might that look like and what additional platforms would that require?

While engaging in a test/dev environment, developers should focus on testing their application’s functions, performance and scalability.  Keep in mind that most applications can be tested in a public cloud, but that some for technical or cultural reasons should be kept in-house, unless you are able to secure the type of SLA that would allow you to migrate those “special” applications.

Now let’s say that you’re ready to make that infrastructure move to the cloud (sometimes this may mean you skip the whole test/dev show).  There are four main items to consider when comparing cloud computing vendors.


The SLA is the most important item you need to compare vendors against.  If you have sensitive data or applications that require high uptime capabilities, you would be wasting your time to look at any vendor with and SLA below 99.99%. But if you just need a test and development environment it wouldn’t make sense to pay the premium for such high availability (higher availability = higher price).  Find out your uptime needs and then locate the vendors who offer the SLA you need.

Technical offerings are the next determining factor.  Depending on which kind of infrastructure you prefer (if you have a preference) you would need to figure out which providers use which technologies.  For instance, do you need enterprise-level VMware hosting technology or does your organization want to use something more along the lines of Microsoft Hyper-V?  If you have a preference work around that, and if not, let’s move straight to #3 – Control.

How much control do you want of the infrastructure?  Do you have your own people to manage your infrastructure or are you on a hiring freeze and need your cloud provider to manage the infrastructure.  There are a number of options in the cloud – some vendors provide managed cloud hosting services (like BlueLock) and others just provide the infrastructure while you manage it.  Whatever your preference, there is a vendor for you.

Lastly, and most obviously – once you’ve compiled a list of vendors who provide the SLA, technical specs, and right amount of control, you’re left to look at pricing.  By now, you may only have a couple cloud vendors left, but you should be in a great place to compare and make the right choice.

As cloud computing and infrastructure-as-a-service (IaaS) continues to take hold in all size business, I’m beginning to see more great discussions about the true cost of Internal IT vs. the Cloud.  Bernard Golden (post) and Drew Robb (post) have each written complete and thorough analysis of the cost of the internal data center and/or storage.
 
This warms the cockles of my heart, because three years ago when we started BlueLock, virtually every opportunity that went down in flames, did so because my monthly fee looked two or three times larger than the prospect's server cost.  During the sales process, we dutifully built a spreadsheet that talked about all the costs involved – hardware, software, maintenance, people and facilities charges and then methodically demonstrated how our TCO was consistently a third of their TCO when every cost in their data center was accounted for.  Predictably, these companies dismissed my cost vs. theirs as a convenient way to defend their turf and maintain their sprawling server farms and army of people.  Those days are over…

So what’s changed?   Obviously a lot.  The financial meltdown and recession caused many businesses to rip costs out just to survive.  Those cuts meant no new capital, fewer people and the necessity to get more done with smaller operational budgets.   Those just happen to be three of the most compelling value drivers of cloud computing and IaaS.  The other thing that has changed is that CEOs and CFOs are now involved in making the decision to transition to the cloud. 

This is no longer just an IT decision, it’s a business decision and the same scenario plays itself out over and over again – cash wins every time (as in cash preservation via lower cost) – which brings us back to TCO.  Now that the CFO is involved in the calculation of the TCO, companies are much more likely to take a broader view what it really costs to own and maintain their own infrastructure. 

I’d like to share just one example:   I had a discussion with a CFO the other day who was downsizing his office to save money.  One of his major constraints was that the new space had to have a room suitable to be a server room.  Not only that, he also was attempting to perform a calculation on the size of the air conditioner and the custom AC work that needed to be done so that the servers could be cooled.  When we got done talking about cloud computing, we had come up with five figures worth of monthly cost that would likely have escaped a TCO calculation performed by IT.   Sound scary?  Continue reading…

In the end, when all of the costs of housing and maintaining the servers were calculated by the CFO, the IT support number was 2 times the cost because it included much more than just the costs of the servers and the people to run the servers.  Ironically, virtually all of the costs that were included in the “new math” (square footage, AC, maintenance on power, network, cooling, additional people beyond IT) would be eliminated if the company decided to put their applications in our managed cloud.  Yes, that means his company could save HALF (or more) if they moved to the cloud rather than using his own space for his own servers and people.

If you’d like to hear more stories about companies like this, give me a call or drop me a note at bwolff@bluelock.com.

Original posts I referred to:

Bernard Golden in “The Case against Cloud Computing” Part 4 TCO of Cloud vs. In-house servers"

What Storage Really Costs by Drew Robb

While cloud computing can offer significant savings, it’s important to know exactly what you’re paying for and what kind of environment you’re receiving for that money, specifically in terms of performance.  Do you know the quality of the parts that are in your environment and what quality tier those fall in?  How high is your SLA?  Is it too high? 

If you need a production environment, you most likely want to have higher end gear with a higher performance Service Level Agreement, up there around 99.99%. But if you just need a test and development environment, why would you pay for the higher SLA and higher-end gear?  It just doesn’t make sense. 

The enterprise client needs are much different from the needs of a single developer, and then there are others, like the SMB who fall in the middle in terms of environment needs.  This is exactly why BlueLock is launching a new suite of offerings next week that addresses all levels of cloud hosting needs – from the developer to the enterprise.  The three-tiered system, The BlueLock Cloud Suite, will provide low, mid and high end capabilities with just the right SLA, gear and price tag to address a spectrum of IT needs. 

More details on the BlueLock Cloud Suite to come...

I'm sure many of you have read about Verizon's new cloud computing offering that allows businesses to outsource their IT infrastructure (what some are now calling computing as a service 'CaaS') - what are your thoughts?  Will more telecom companies begin to offer cloud hosting and what kind of an impact will they make on the cloud market? 

Verizon is yet another telecom to jump on the cloud bandwagon - AT&T recently joined (last month) as well.

Verizon partnered with VMware for its data center virtualization services.  VMware is a BlueLock partner as well, and is a very reputable virtualization provider in the cloud space.

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A recent article by Paul Korzeniowski called "Cloud Computing Needs Time to Establish Order" addresses his thoughts on the infancy of cloud computing and how that impacts the growing market, specifically the SMB market.

Korzeniowski argues that while several groups are emerging to set standards in the cloud industry and help to bring it to maturity, SMBs face options of limited functionality in the short term.  (This post argues otherwise)

He states, “One irony with new information technologies is that vendors focus first on deploying them and only later on figuring out how to manage them. That’s the scenario unfolding with cloud computing.”

Yes, many startup vendors are jumping on the cloud bandwagon trying to figure out how they can get a piece of the pie, but not all of them are having trouble figuring out how to manage the technologies.  At BlueLock, we’ve been using virtualization technology for over two years to create solutions for our SMB clients – those same clients that Korzeniowski feels have limited options.  Over 25% of our clients fit into the SMB profile, and each and every one of them find value in BlueLock’s virtual cloud environment – they’ve cut IT costs almost in half while no longer having to worry about managing and monitoring their IT environments -- because BlueLock’s experts take care of all of that for them.  This frees up the companys’ valuable time to focus on their core business – driving growth and innovation. 

Korzeniowski believes that the management factor for cloud computing lies in the hands of these ad hoc “standards making groups” such as the Distributed Management Task Force (DMTF) and the Cloud Security Alliance. I would argue that while these groups are doing all they can to set standards in this youthful market, they are by no means the only people worried about cloud computing “management.”  These groups will take a couple years to come to any standards agreements, and more time will be taken for vendors to get up to speed with them, so in the meantime cloud computing providers such as BlueLock are working their butts off to solve the biggest management issue: making the clients happy. 

So far, I must say we’ve done a good job.  Our clients are saving time and money – in the cloud. Those SMB clients are among the clients who most benefit from a managed cloud computing solution.  They face rapid growth, have tight budgets to work with and normally need things done yesterday.  Well, we know the feeling and we also know that those clients are the ones we like because we can make them happy.  They have control, high availability, support and a partner that manages and monitors their IT infrastructure for them while they go do important things with their talented people.

I don’t see the “limited functionality” for SMBs that is spoken of in the article…maybe in Amazon’s cloud, but not in BlueLock’s.

A recent post by EDL Consulting comments on what kind of an edge the first movers in the web-based hosted software solutions will have in regards to the cloud computing market.  Will they have an edge or will they be swept up by larger companies with large existing client bases like Microsoft?

With the advantages of virtualization becoming more and more widely known, companies are jumping on the cloud bandwagon quickly.  Reuters has suggested that even those cloud companies that got on the bus early will still face fierce competition from larger companies that will come in later with huge databases of trusting customers.

While the post is focused on the Software as a Service aspect of cloud computing, I think that the discussion rings true among cloud computing hosting providers as well.  BlueLock has been doing infrastructure-as-a-service for two years now, before the big cloud boom hit.  Suffice it to say, we definitely feel that we were one of the first movers and shakers when it comes to managed cloud hosting, especially considering the fact that when we first started talking about the value of virtualization our prospects looked at us like we were crazy.  Crazy or not, BlueLock was built around the value of virtualizing IT infrastructure to shift capital expenses to a monthly operating expense that's a fraction of the cost (plus we could throw in virtual disaster recovery for almost a 3rd of what it would cost in a traditional model).  So maybe we were crazy, but the idea has caught on.

In terms of advantages and disadvantages of being a beginning mover and shaker in the cloud computing arena, we'd have to say that BlueLock has definitely found some advantages.  We've seen our competition try to add on cloud services to their traditional hosting services, and in many cases its a difficult transition.  How do you know what to tell your salespeople?  Sell cloud or sell traditional colocation?  The companies had worked for years building a business on traditional hosting services and then virtualization comes along and shakes everything up - its less expensive, there's more space and compute to work with at a fraction of the cost, etc etc.  Your margins and MRC start to decrease, but you need to keep up with the cloud competition.  Not only that, but you don't really specialize in virtualization, the traditional way was your thing.

Well at BlueLock, we started with virtualization and that's what our engineers specialize in so its a no brainer for us what we should sell and its a no brainer for us on how to provide the biggest bang for our prospect's buck.  As for the bigger companies cramping our style - the Rackspaces and GoGrid's of the world aren't really our direct competition anyway. 

We surely feel we've got an edge.