Ping Li from Accel Partners wrote a very interesting article this week about how some of the companies that his firm have funded are leveraging cloud computing.  He made a couple of points that I find particularly interesting: 

The first is that VC companies are making it a “pre-condition” of funding that the funded company leverage the cloud vs. buying traditional infrastructure. 

Even more interesting and more powerful is his second point: that most of these companies didn’t need that encouragement – there is no way their company could exist if they didn’t launch in the cloud – it just wouldn’t be possible to build the scale, complexity or cost without using a cloud infrastructure provider. 

His article got me thinking about all the other companies in the “universe” and the book by Nicholas Carr, The Big Switch.  In the book, Nick tells the story of Henry Burden and “Burden’s Wheel”.  Burden realized in the late 1800’s that he could locate his manufacturing company next to a river, build a huge water wheel to generate electricity and then automate many of the manufacturing processes, thereby lowering his cost, increasing production and crushing the competition.  Mr. Burden, no doubt, needed a very specialized group of people to build and maintain this elaborate “power system”, however, by the early 1900s, commercial power was introduced that turned his internal power generating systems into an enormous cost that other manufacturers did not have to bear.  Sound familiar?

Many others have done a better job than I could in this post about the difference between power and data - that really isn’t the point.  The point is that there are companies today that have launched very successfully without any internal IT systems – which means no IT capital costs, no/minimal IT labor costs and maintenance costs that larger companies today bear with their own internal IT systems.  There are other differences, of course, namely, that large established companies have huge legacy systems that may not necessarily be appropriate for the cloud, however, they do have very large costs supporting other systems that are considered important but not critical that may be perfect candidates to be migrated to the cloud.  By moving these environments to the cloud they have the opportunity to reduce their overall cost and enable their existing IT departments to focus on building more valuable systems to drive more business value. 

In start-up companies, pure cloud hosting is the preferred route to market – in large companies it’s not going to be an all-or-nothing proposition – it’s going to be a “hybrid” approach. With a hybrid approach, enterprise companies create a secure connection between their private cloud and a public cloud (today a secure VPN or MPLS connection) and then move less critical workloads to the public cloud.

At BlueLock, we like to say that we’ve been in the cloud a “lifetime”, and we have the good fortune to be serving many companies in both of these camps:  start-ups (many that are SaaS companies specifically); and large enterprise clients that sought to leverage the cloud to lower their costs and focus their valuable IT resources on projects and systems that drive more business value. 

In July, I’m going to be presenting to software company CEOs at SaaS University in Washington, DC on the topic of “Infrastructure Choices”, where I’ll put a spotlight on the cost differences between building your own internal infrastructure vs. moving to the cloud.  I will also be discussing many considerations that companies face such as security and SLAs, two issues that should be top of mind when deciding which cloud is right for you.  

If you’re interested in attending the event as BlueLock’s guest – register for the event and use this code:  BLUELOCK100 to receive a $100 discount off the cost of registration.

If you have a comment or would like to contact me, you can reach me at bwolff@bluelock.com.  

Tom Henderson and Brendan Allen with Extreme Labs did an excellent and even-handed job of comparing three Enterprise Cloud Services.   BlueLock was honored to be considered.  The costs came out exactly as I would have expected and for the reason I’ve pointed out many times in previous blog posts, including this one (see tip #13 from a recent post) – we were the “expensive” option.  I’m not saying that being the expensive option is a bad thing, but if you look at the bigger picture, we just aren’t. The difference is people and expertise.  
 

Our philosophy (and pricing model) is different than Terremark and Rackspace’s cloud hosting offerings.  At BlueLock we’re focused on the relationship and helping companies manage the infrastructure so that they can hire more developers and/or sales people rather than systems engineers.  You’ll pay “more” at BlueLock because there’s more value (hint: people) in our offering than just raw compute and storage.  If you don’t want to read further, just scroll down to the illustration and you’ll see just what I’m talking about.
 

In addition to delivering raw unmanaged infrastructure, BlueLock is delivering systems engineering expertise to manage the environment from the operating system down – which is all part of the bundled price.   I’ve presented many times to an audience of software company executives on making the best infrastructure choices for their SaaS offering and the cost numbers I use during that presentation are almost identical to Tom’s and Brendan’s.   
 

My point here and during the presentation is that when you load your applications to the cloud – someone (a person or people) MUST manage those environments – whether they are internal or external.  When you bring them to BlueLock and load them into our Enterprise Cloud Platform, you do not need to employ infrastructure experts – that’s what we do for you.  Companies that choose our competitors or Amazon for that matter must have infrastructure experts to manage the environment – and that cost is not in their numbers, so they look much cheaper.   
 

The chart below adds a single full-time resource to the costs to represent one employee managing the environment.  That doesn’t cover you if your employee would like to sleep, get sick or take a vacation, but you’ll get the picture without going off the deep end with costs.  
 

Finally, I recently competed against and beat one of these two cloud hosting companies mentioned in the Network World article (link) and based upon my discussions with the client the other guys did have an implementation fee….I’m just sayin’.

 

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

In my last post, I tackled tips 1-5.  This week I’d like to take a look at the next five tips Adam Stone referred to in regards to "Making sense of the cloud: 15 tips for software CEOs" and provide you with the BlueLock perspective on what companies looking to migrate to cloud computing should be thinking about.

Tip #6:  To Avoid vendor Lock-in, stick to open standards. 
This one makes a lot of sense to me – in the end, you need to make sure that whatever you put in the cloud you can get back easily and intact.  While some may argue that deploying VMware technology locks you into VMware’s virtualization platform, I would argue that VMware is the defacto standard for virtualization technology for the enterprise, by virtue of their large market share.  Deploying VMware gives clients a lot of flexibility to move that server to another VMware host if they wish to move.  We even have cases where companies wish to protect themselves from something happening to BlueLock as a cloud provider.  In that instance, we’re replicating the entire virtual machines to a neutral third party, Iron Mountain.  If a triggering event were to occur, the company simply contacts Iron Mountain and receives immediate access to the virtual machines, which can immediately be loaded on servers running VMware.  That’s just one straight-forward example of how “portable” the environment is as a result of running in a VM ware-based virtualization platform.

Tip #7:  Location, Location, Location. 
Yes, indeed, it’s difficult to bend the laws of physics and the speed of light.  This tip talks about two real issues – the first is latency and the second deals with the laws that govern the location where the data center sits, in both cases, BlueLock has engineered solutions to address our client’s specific challenges.   We have clients that need to have the data closer to them than our data centers in Indianapolis, IN or in Salt Lake City, UT for speed or data privacy issues.  For these clients, we introduced our version of a private data center called The BlueLock Box in October 2007.  This private cloud solution entails installing an HP C3000 blade chassis with redundant SAN shelves behind the client’s firewall.  This solution provides them with the same benefits of BlueLock’s public cloud such as fault tolerance and scalability, but puts the data closer to them for speed and/or privacy issues. 

Tip #8:  Consider using a middleman. 
I agree with Adam – there is a huge opportunity for cloud brokers or companies that have expertise in helping clients make thoughtful decisions about what can and/or should go into the cloud and then to actually help architect and deliver the cloud solution.  We’ve worked closely with several partners who have trusted advisor relationships with large fortune 1000 clients that have chosen BlueLock as their cloud solution.  In fact, we’ve been asked to present next week in VMware’s Partner Exchange keynote on the topic of how partners can work with a cloud providers to deliver real value to their clients.  I will be sharing the stage with Carl Eschenbach, EVP of Worldwide Field Operations and Casey Watson, VP Business Development for Apparatus to talk about how BlueLock and Apparatus have built a sizable business delivering cloud integration services for large clients.

Tip #9:  Monitoring uptime isn’t enough, you need an action plan. 
We couldn’t agree more with Adam on this point.  From day one, we’ve had a resolution-based 99.99% uptime SLA in place for our clients.  This means that not only will we respond quickly to the issue, but we’ll promise resolution of that issue.  On top of that, we’ve also patented a portal that we call “the VITAL signs portal” that provides our clients with an overall view of the health of their environment, as well as an ability to drill into each aspect of their environment, to see what’s actually happening.  Finally, we have also built capabilities in the portal to send alerts and alarms when something goes wrong or when the environment has reached a pre-determined limit on things like CPU, RAM and storage.   If those measures aren’t enough, we’ve also built tailored metrics for some clients that wish to monitor additional key metrics in their environment.

Tip #10:  A clause may look good in the contract, but be useless in the real World.  Adam’s tip in this area covered a “useless” escrow agreement.  In tip number six, I shared how we’ve put an escrow agreement in place that can be tested and actually works.  Having said that, I agree that empty legal promises are not the way to make sure you’re protected.  Testing the system is the best way to insure what’s being set aside actually works.  In addition to the escrow agreement, we also have numerous disaster recovery clients that have performed successful tests of our geographic failover disaster recovery service.  In the end, you want the “promise” in writing, but then you want to do a test to make sure it performs as expected.  Reminds me of an old Reaganism – “trust but verify”.

Next week, I’ll take us down the homestretch and walk through the final five tips for migrating successfully to the cloud. 

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.

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.

Recently, a few articles have popped up with the accusation that cloud computing vendors and providers are ignoring IT pros' concerns.

Carl Brooks recently quoted: "The results of a new Forrester Research survey show that while awareness around cloud computing has grown by leaps and bounds, the concerns of potential adopters remain the same. But apparently vendors and cloud promoters didn't get the memo."

A Forrester survey entitled "State Of Emerging SMB Hardware: 2009 To 2010" questioned around 3,000 business respondents. Roughly 51% of those respondents named uncertainty about security in cloud environments the biggest obstacle to adoption.

The concepts of cloud computing and its many benefits and advantages are becoming widespread knowledge, but the accusation is that cloud computing service providers are not doing enough to alleviate concerns around security, namely by providing specifics about how they are securing data.

Let's be frank here, BlueLock is not going to give away our "secret sauce" about how exactly we go about securing our clients' data, but I can tell you that we are completely open with the security vendors we have chosen (IBM ISS, CheckPoint, and we've got a great relationship with Shavlik Technologies).

We have clients with PCI compliance needs, clients with HIPAA requirements and more.  While we aren't out shouting about our security, rest assured, we wouldn't have three successful years of providing IaaS cloud computing behind our belts without it.  Not with our clients, that's for sure.

One of the biggest reasons most providers are not out there telling security stories is because no one wants to make their data center a target.  Clients with high security needs won't talk about their story either, for the most part, because they don't want people to know where their data is or how its being protected (because that would make them a target too).  So just because providers aren't making a bunch of noise about cloud security doesn't mean we aren't doing anything about it.  Every decision BlueLock makes when it comes to our cloud architecture comes down to a question of security.  If our clients aren't secure they aren't happy and we are no longer providing a valuable service as their trusted partner.

If you've got questions about how we can secure your data, contact our sales team at info@bluelock.com.

Read about the secure and compliant environment we built for Right On Interactive here.

To see a full list of BlueLock's technology partners, go here.

Read Carl Brooks' original post.

By now everyone has heard about the T-Mobile Sidekick crash in one of Danger’s (a Microsoft subsidiary) cloud computing environments.  Just like every time Gmail goes down, there is a wide and broad brush of FUD painted across the cloud computing canvas. 

Stephen Foskett recently wrote a blog post that talks about the shocking “bubblegum and baling wire” approach that some companies take when delivering cloud computing storage.  I couldn’t agree with him more.  There are some hokey things going on in the world of cloud storage, otherwise these crashes wouldn’t happen and James Urquart wouldn’t be questioning the need for malpractice safeguards in cloud computing.

As the title of this blog post implies, this type of data loss that occurred at Microsoft is more common than many would admit.  The difference is that most times it’s not in a public cloud and it doesn’t affect thousands of people.  Why does it happen?  It happens because moving parts break and because human beings are involved.  Now, just because there are breaking parts and humans, that doesn’t mean there must be a disaster or data loss.  The question is really about whether your business is willing to pay for what it takes to insure that the data is protected or in the case of Microsoft Danger, take the extra step of providing a path to copying the data to another instance.  Data loss can be prevented; it’s just a matter of who’s willing to pay for it.  It would be wild speculation on my part to say what actually happened in the MS Danger data center - but what I can say with much confidence that an economic decision was at the heart of the loss. 

How do I know that?  Because at BlueLock we take data loss very seriously, so we have engineered redundancy into our cloud architecture and that kind of protection comes with a cost.  Some prospects choose to pay for it (we call them clients) and some don’t (we call them “lost deals”).  Go here to learn more about how we back our data up.   More often than not, the prospects that choose not to pay the cost do so because the data they are trying to protect is not worth the cost that I’m proposing to keep it safe.  Of course the converse is also true, our clients that accept the cost, do so because when they see all of  the engineering and services bundled into the price, the cost is in balance with the risk of the data loss.   

The bottom line…

Just as I discussed in a previous post about the TCO of an Infrastructure, there are many costs associated with protecting data and insuring that failing hardware or humans don’t take you down.  The bottom line is really about the risk of loss and a careful cost/benefit analysis of paying to protect the data….or not.  If you’d like help completing that analysis, send me a note or give me a call.  That’s what we do every day for companies just like yours.

Reference post by Stephen Fosket

If you haven’t already registered, it’s not too late!  Click here to register now, the more the merrier!

About CloudCamp:
CloudCamp is an unconference where attendees can exchange ideas, knowledge and information in a creative and supporting environment, advancing the current state of cloud computing and related technologies. As an informal, member-supported gathering, we rely entirely on volunteers to help with meeting content, speakers, meeting locations, equipment and membership recruitment. We also have corporate sponsors that provide financial assistance with venues, food, drink, software, services and other valuable donations.

Sponsors & Presenters:
Thank you to the following sponsors:

-    Apparatus
-    Scale Computing
-    Network Storage, Inc
-    Windows Azure
-    Cisco

Location: Note - Photo ID is required to get into CloudCamp Indianapolis

BlueLock
6325 Morenci Trail
Indianapolis, IN 46268

Tentative Schedule:
4:00PM Networking
4:45PM Introduction
5:00PM Lightning Talks (5 min each)
5:45PM Un-panel (with Audience Questions)
6:15PM Organize Un-conference
6:30PM 1st round of breakout sessions (including “What is Cloud Computing”)
7:30PM Food, Drinks & Networking
7:45PM 2nd round of breakout sessions
8:30PM Wrap-up Session and more Networking

CloudCamp Indy Organizers:

- Alicia (Glick) Gaba of BlueLock
- Ryan Birk of Apparatus
- Ed Saipetch of Network Storage Inc.


Interested in more CloudCamps? See - http://www.cloudcamp.com

BlueLock serves its clients by providing the people, expertise and IT infrastructure in a world-class, SAS 70 certified data center. The company provides Virtual Cloud Computing through Infrastructure-as-a-Service (IaaS) where clients subscribe monthly to just the right amount of computing, storage and bandwidth capacity needed today with the ability to grow “on demand” in the future. Their unique IT environments are ideal for Web-facing software applications (also known as software as a service) and IT environments that require high availability and the ability to expand and contract dynamically for production or disaster recovery.  Our rapid growth earned BlueLock the accolade of one of 50 Indiana “Companies to Watch” in 2009 by the Indiana Economic Development Corporation. BlueLock, a Collina Ventures company, is privately-held and headquartered in Indianapolis, Indiana.

Position Summary
BlueLock is looking for a Controller. This role will be vital to the Finance and Administration team and is being added due to explosive growth. 

The Controller would report directly to the Chief Financial Officer. This position is responsible for a variety of accounting, finance and treasury activities. Specific responsibilities will include directing the monthly reporting and daily accounting activities, budgeting, forecasting and planning of the company performance. This is a key position and the individual must have high energy, strong work ethic and experience in a fast paced entrepreneurial environment.

Essential Duties and Responsibilities
Oversee all aspects of the Company’s accounting functions. Some of these duties include general accounting, operational accounting, accounts payable, accounts receivable, taxes, internal controls and reconciliations.

Ideal Personal Profile:
To perform the job successfully, an individual should demonstrate the following competencies to perform the essential functions of this position.This position requires a bachelor’s degree preferably in accounting or finance, and 4 – 8 years of related accounting and financial experience.  Strong understanding of accounting and finance principles is required.  A CPA, MBA or other advance degree would be preferred.

Company Culture
If you’re a motivated self-starter that shares our commitment to building a world-class organization, you might be the right person for BlueLock. We believe that each employee who joins our staff is important to the success of our company, and that each and every employee makes a difference.  The key to our success lies in the hard work, dedication and commitment of our employees, whose accomplishments we recognize with personal acknowledgement, competitive compensation, excellent benefits, and opportunities for personal and professional growth and advancement.  We are committed to attracting new employees as we grow as a company, but believe that the key to our long-term success is the retention of current employees

The above statements are intended to describe the general nature of a level of work performed by people assigned to this classification.  They are not intended to be construed as an exhaustive list of all responsibilities, duties and skills required of employees so classified.  Management retains the discretion to add to or change the duties of the position at any time.

If you want to join one of Indiana’s best employment opportunities, please send your resume to Brian Modiano, CFO bmodiano@bluelock.com

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 at VMworld 2009, we took some time to talk with some of our cloud computing partners such as Intel, F5 and Shavlik.  As a VMware hosting provider, it was great to attend such an amazing conference focused on VMware virtualization technology and the advancements VMware and their partners are making in the virtualization and cloud computing realm.  Watch this video to hear some words from our partners at the event.

Indianapolis-based BlueLock, provider of cloud computing and managed IT services, announced they will sponsor and host CloudCamp Indianapolis #2 on Tuesday, October 27th. CloudCamp events are free and follow an interactive, unscripted format as attendees suggest topics of discussion, before and during the event. Attracting IT professionals and non-technical business managers alike, the cloud computing event is designed to expand awareness of cloud computing, from both a technical and business integration perspective.

At a typical CloudCamp, activities include:

• Panels and discussions focused on different types of Cloud Computing technologies
• Identify and discuss challenges posed by Cloud Computing
• Exchange ideas with other Cloud Computing innovators
• Learn about business models and discover opportunities
• Networking between potential cloud clients and business partners
 

In response to the growing interest in cloud computing, these camps have been held in major tech centers around the world, such as San Francisco, Washington D.C., Atlanta and London. Upcoming events, in addition to the Indy event, include: Silicon Valley, Munich, Germany, Phoenix, AZ and Tel Aviv.

"We are excited to host and sponsor another CloudCamp event in Indianapolis,'" said Brian Wolff, VP Sales and Marketing for BlueLock. “We had an amazing crowd of more than 100 people, who brought an abundance of questions, knowledge and ideas about cloud computing back in February at the first CloudCamp Indianapolis. We’re hoping to attract even more participants to share more ideas and knowledge about the current and always-changing cloud landscape.”

The unique unconference will be held from 4 – 8:30 pm at BlueLock, 6325 Morenci Trail, Indianapolis, IN. CloudCamp is a free event, but space is limited so you must register.

Virtual pre-conference discussions can be found at www.cloudcamp.com and on Twitter at http://twitter.com/cloudcamp.

For more information or to register for this event go to www.cloudcamp.com/indianapolis.
 

So much excitement has built up to this year’s VMworld conference (put on by VMware).  BlueLock is going to be a part of a huge announcement, we’re also assisting Shavlik Technologies in one of theirs, and multiple new friendships and partnerships have formed due to the upcoming event (that starts today!).  We’re looking forward to seeing all of our partners at the Moscone Center. 

We’ll be in the vCloud Pavilion so come stop by our booth, and hopefully you’ll get to see our CTO, Pat O’Day demo our new offering (which will be announced at the keynote on Tuesday).  David Westgate of Logiq3, one of our clients will also be sitting on a panel to speak about his experiences in the BlueLock cloud and how he made the decision to get into the cloud.  And we’ll also be around participating in a chalk talk and other engagements with our partners at Intel.

Looking forward to a great week at VMworld!

John Engate over at Rackspace does a great job of calling out the reasons companies are resistant to adopting cloud and outlining ways that companies can dip their toe into the cloud.

Our CTO, Pat O’Day participated in a cloud computing panel discussion a couple of weeks ago where Erik van Ommeren from Sogeti correctly pointed out that many of these companies are already unwittingly participating in the cloud with their blogging platforms, linked-in profiles, etc.  So then the issue isn’t really about cloud or no cloud – it’s about using the cloud in a way that is consistent with strategy and the needs of the organization. 

The last point that John made in his article was to point out that a hybrid approach is likely to be the winner – because for most companies it’s not going to be an “all or nothing” approach.   We couldn’t agree more.  When we started BlueLock in 2006, we built our data center specifically to cater to these companies so that the distance light needs to travel to connect private cloud servers and our public cloud servers is a matter of feet, not miles.  We built a 2N data center with racks for companies to colo their private cloud equipment and easily connect it to our cloud computing platform. 

In the coming weeks we’re going to be rolling out a comprehensive approach to cloud computing that will enable companies to choose which type of cloud they want to be in and to align their infrastructure needs, budget and strategy with their cloud computing strategy. 

Stay tuned…

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...

First things first, clouds can be anywhere.  They aren’t just an external resource companies can tap into, cloud technology can be taken advantage of anywhere (i.e. inside the walls of your organization).

Private clouds exist and will continue to exist as the trend towards cloud computing continues.  There are many organizations out there that can’t just up and move into a multi-tenant public cloud environment, but still want to reap the benefits of cloud computing.  The only way to do this is by creating a private cloud, made possible with virtualization. 

Companies are able to use the technologies and approaches associated with public clouds, just on a smaller scale, and still continue to own, operate and control their own IT infrastructure.  Would some call this server-hugging? Of course.  But at the same time, every organization has different needs and as stated before, they can’t just jump into a public cloud setting.  Any IT infrastructure expert would probably tell those companies they’re doing the right thing.  And some, like BlueLock, can even help to make that possible.

Definition of a private cloud.

For information about BlueLock’s private cloud solution, click here.

The technology that makes cloud computing possible is virtualization.  The main objective in cloud computing is to improve resource utilization by sharing available resources to multiple on demand needs.  Virtualization abstracts the underlying resources such as the memory, storage, network so that multiple operating systems (Windows, Linux) can be run on a single physical system simultaneously.  This improves resource utilization – traditional servers utilize about 20% of its resources, whereas a virtual machine (these individual operating system instances we referred to above) uses an average of 80% of its resources.

The cloud is proving to be the future medium to deliver technology.  Today, cloud service companies are a dime a dozen – they’ve all spun up to capture some of the large cloud market.  The advantages of virtualization go beyond just resource utilization - virtualized servers consume less power, have lower cooling costs and require less space (all great things for the environment).  And virtualization is the underlying technology that allows for rapid provisioning, on demand resources, utility-based cost structure, and the reduction of capital expenditures.

To learn more about virtualization and cloud computing, click here.

BlueLock, a provider of cloud computing and managed IT services was featured in a July 23, 2009 Gartner report entitled Hype Cycle for Business Continuity Management, 2009 in the Cloud-Based Recovery Services section. 

The report features findings on the increasing costs and risks of business disruptions and how they continue to drive the importance of effective business continuity management operations for business and technology executives. BlueLock was featured as a cloud services company able to cost-effectively solve business continuity issues using cloud computing and virtualization technologies.

“BlueLock has worked hard over the years to build a cloud computing platform that enables businesses to easily and efficiently integrate a cost effective disaster recovery solution into their IT infrastructure,” said Pat O’Day, CTO of BlueLock.  “It’s nice to get this kind of recognition from a highly recognized and respected source such as Gartner.”

BlueLock’s disaster recovery solution is built on virtualized servers and uses virtualized storage.  The two solutions work together to provide rapid recovery and performance on demand enabling BlueLock to readily adjust to client needs and quickly provide production capacity should a disaster occur.   A couple of BlueLock’s local disaster recovery clients include Marian University and Wooden & McLaughlin, LLP.

“Using a combination of VMware and HP technology, we’re able to clone a bootable copy of a client’s production environment and move it hundreds of miles away to a disaster recovery site.  When they declare a disaster or want to test their recovery plan, we simply boot them into production.   You can’t do that without virtualization,” said O’Day.