CloudPundit: Massive-Scale Computing
the business of Internet infrastructure, cloud computing, and data centers
Updated: 34 min 10 sec ago
Although this has been long-rumored, and then was formally mentioned in VMware’s recent investor day, VMware has only just formally announced the vCloud Hybrid Service (vCHS), which is VMware’s foray into the public cloud IaaS market.
VMware has previously had a strategy of being an arms dealer to service providers who wanted to offer cloud IaaS. In addition to the substantial ecosystem of providers who use VMware virtualization as part of various types of IT outsourcing offerings, VMware also signed up a lot of vCloud Powered partners, each of which offered what was essentially vCloud Director (vCD) as a service. It also certified a number of the larger providers as vCloud Datacenter Service Providers; each such provider needed to meet criteria for reliability, security, interoperability, and so forth. In theory, this was a sound channel strategy. In practice, it didn’t work.
Of the certified providers, only CSC has managed to get substantial market share, with Bluelock trailing substantially; the others haven’t gotten much in the way of traction, Dell has now dropped their offering entirely, and neither Verizon nor Terremark ended up launching the service. Otherwise, VMware’s most successful service providers — providers like Terremark, Savvis, Dimension Data, and Virtustream — have been the ones who chose to use VMware’s hypervisor but not its cloud management platform (in the form of vCD).
Indeed, those successful service providers (let’s call them the clueful enterprise-centric providers) are the ones that have built the most IP themselves — and not only are they resistant to buying into vCD, but they are increasingly becoming hypervisor-neutral. Even CSC, which has staunchly remained on VMware running on VCE Vblocks, has steadily reduced its reliance on vCD, bringing in a new portal, service catalog, orchestration engine, and so forth. Similarly, Tier 3 has vCD under the covers, but never so much as exposed the vCD portal to customers. (I think the industry has come to a broad consensus that vCD is too complex of a portal for nearly all customers. Everyone successful, even VMware themselves with vCHS, is front-ending their service with a more user-friendly portal, even if customers who want it can request to use vCD instead.)
In other words, even while VMware remains a critical partner for many of its service providers, those providers are diversifying their technology away from VMware — their success will be, over time, less and less VMware’s success, especially if they’re primarily paying for hypervisor licenses, and not the rest of VMware’s IT operations management (ITOM) tools ecosystem. The vCloud Powered providers that are basically putting out vanilla vCD as a service aren’t getting significant traction in the market — not only can they not compete with Amazon, but they can’t compete against clueful enterprise-centric providers. That means that VMware can’t count on them as a significant revenue stream in the future. And meanwhile, VMware has finally gotten the wake-up call that Amazon’s (and AWS imitators) increasing claim on “shadow IT” is a real threat to VMware’s future not only in the external cloud, but also in internal data centers.
That brings us to today’s reality: VMware is entering the public cloud IaaS market themselves, with an offering intended to compete head-to-head with its partners as well as Amazon and the whole constellation of providers that don’t use VMware in their infrastructure.
VMware’s thinking has clearly changed over the time period that they’ve spent developing this solution. What started out as a vanilla vCD solution intended to enable channel partners who wanted to deliver managed services on top of a quality VMware offering, has morphed into a differentiated offering that VMware will take to market directly as well as through their channel — including taking credit cards on a click-through sign-up for by-the-hour VMs, although the initial launch is a monthly resource-pool model. Furthermore, their benchmark for price-competitiveness is Amazon, not the vCloud providers. (Their hardware choices reflect this, too, including their choice to use EMC software but going scale-out architecture and commodity hardware across the board, rather than much more expensive and much less scalable Vblocks.)
Fundamentally, there is virtually no reason for providers who sell vanilla vCD without any value-adds to continue to exist. VMware’s vCHS will, out of the gate, be better than what those providers offer, especially with regard to interopability with internal VMware deployments — VMware’s key advantage in this market. Even someone like a Bluelock, who’s done a particularly nice implementation and has a few value-adds, will be tremendously challenged in this new world. The clueful providers who happen to use VMware’s hypervisor technology (or even vCD under the covers) will continue on their way just fine — they already have differentiators built into their service, and they are already well on the path to developing and owning their own IP and working opportunistically with best-of-breed suppliers of capabilities.
(There will, of course, continue to be a role for vCloud Powered providers who really just use the platform as cloud-enabled infrastructure — i.e., providers who are mostly going to do managed services or one sort or another, on top of that deployment. Arguably, however, some of those providers may be better served, over the long run, offering those managed services on top of vCHS instead.)
No one should underestimate the power of brand in the cloud IaaS market, particularly since VMware is coming to market with something real. VMware has a rich suite of ITOM capabilities that it can begin to build into an offering. It also has CloudFoundry, which it will integrate, and would logically be as synergistic with this offering as any other IaaS/PaaS integration (much as Microsoft believes Azure PaaS and IaaS elements are synergistic).
I believe that to be a leader in cloud IaaS, you have to develop your own software and IP. As a cloud IaaS provider, you cannot wait for a vendor to do their next big release 12-18 months from now and then take another 6-12 months to integrate it and upgrade to it — you’ll be a fatal 24 months behind a fast-moving market if you do that. VMware’s clueful service providers have long since come to this realization, which is why they’ve moved away from a complete dependence on VMware. Now VMware itself has to ensure that their cloud IaaS offering has a release tempo that is far faster than the software they deliver to enterprises. That, I think, will be good for VMware as a whole, but it will also be a challenge for them going forward.
VMware can be successful in this market, if they really have the wholehearted will to compete. Yes, their traditional buying center is the deeply untrendy and much-maligned IT Operations admin, but if anyone would be the default choice for that population (which still controls about a third of the budget for cloud services), it’s VMware — and VMware is playing right into that story with its emphasis on easy movement of workloads across VMware-based infrastructures, which is the story that these guys have been wanting to hear all along and have been waiting for someone to actually deliver.
Hello, vCHS! Good-bye, vCloud Powered?
Today, not long after its recent acquisition of Enstratius, Dell announced a withdrawal from the public cloud IaaS market. This removes Dell’s current VMware-based, vCloud Datacenter Service from the market; furthermore, Dell will not launch an OpenStack-based public cloud IaaS offering later this year, as it had originally intended to do. This does not affect Dell’s continued involvement with OpenStack as a CMP for private clouds.
It’s not especially surprising that Dell decided to discontinue its vCloud service, which has gotten highly limited traction in the market, and was expensive even compared to other vCloud offerings — given its intent to launch a different offering, the writing was mostly on the wall already. What’s more surprising is that Dell has decided to focus upon an Enstratius-enabled cloud services broker (CSB) role, when its two key competitors — HP and IBM — are trying to control an entire technology stack that spans hardware, software, and services.
It is clear that it takes significant resources and substantial engineering talent — specifically, software engineering talent — to be truly competitive in the cloud IaaS market, sufficiently so to move the needle of a company as large as Dell. I do not believe that cloud IaaS is, or will become, a commodity; I believe that the providers will, for many years to come, compete to offer the most capable and feature-rich offerings to their customers.
Infrastructure, of course, still needs to be managed. IT operations management (ITOM) tools — whether ITIL-ish as in the current market, or DevOps-ish as in the emerging market — will remain necessary. All the capabilities that make it easy to plan, deploy, monitor, manage, and so forth are still necessary, although you do these things differently in the cloud than on-premise, potentially. Such capabilities can either be built into the IaaS offerings themselves — perhaps with bundled pricing, perhaps as value-added services, but certainly as where much of the margin will be made and providers will differentiate — or they can come from third-party multi-cloud management vendors who are able to overlay those capabilities on top of other people’s clouds.
Dell’s strategy essentially bets on the latter scenario — that Enstratius’s capabilities can be extended into a full management suite that’s multi-cloud, allowing Dell to focus all of its resources on developing the higher-level functionality without dealing with the lower-level bits. Arguably, even if the first scenario ends up being the way the market goes (I favor the former scenario over the latter one, at present), there will still be a market for cloud-agnostic management tools. And if it turns out that Dell has made the wrong bet, they can either launch a new offering, or they may be able to buy a successful IaaS provider later down the line (although given the behemoths that want to rule this space, this isn’t as likely).
From my perspective, as strategies go, it’s a sensible one. Management is going to be where the money really is — it won’t be in providing the infrastructure resources. (In my view, cloud IaaS providers will eventually make thin margins on the resources in order to get the value-adds, which are basically ITOM SaaS, plus most if not all will extend up into PaaS.) By going for a pure management play, with a cloud-native vendor, Dell gets to avoid the legacy of BMC, CA, HP, IBM/Tivoli, and its own Quest, and their struggles to make the shift to managing cloud infrastructure. It’s a relatively conservative wait-and-see play that depends on the assumption that the market will not mature suddenly (beware the S-curve), and that elephants won’t dance.
If Dell really wants to be serious about this market, though, it should start scooping up every other vendor that’s becoming significant in the public cloud management space that has complementing offerings (everyone from New Relic to Opscode, etc.), building itself into an ITOM vendor that can comprehensively address cloud management challenges.
And, of course, Dell is going to need a partner ecosystem of credible, market-leading IaaS offerings. Enstratius already has those partners — now they need to become part of the Dell solutions portfolio.
If you’re a service provider interested in participating in the Cloud IaaS Magic Quadrant process (see the call for vendors), I’d like to recommend a number of my previous blog posts.
Foundational Gartner research notes on cloud IaaS. Recommended reading to understand our thinking on the market.
Having cloud-enabled technology != Having a cloud. Critical for understanding what we do and don’t consider cloud IaaS to be.
AR contacts for a Magic Quadrant should read everything. An explanation of why it’s critical to read every word of every communication received during the MQ process.
The process of a Magic Quadrant. Understanding a little bit about how MQs get put together.
Vendors, Magic Quadrants, and client status. Appropriate use of communications channels during the MQ process.
The art of the customer reference. Tips on how to choose reference customers.
It’s that time of the year again, a little bit early — we’re trying to refresh the Cloud IaaS Magic Quadrant on a nine-month cycle rather than a yearly cycle, reflecting the faster pace of the market.
A pre-qualification survey, intended to gather quantitative metrics and information about each provider’s service, will be going out very soon.
If you are a cloud IaaS provider, and you did not receive the 2012 survey, and you would like to receive the 2013 survey, please email Michele dot Severance at Gartner dot com to request to be added to the contact list. You must be authorized to speak for your company. Please note we cannot work with PR firms for the Magic Quadrant; if you are a PR agency and you think that your client should be participating, you should get in touch with your client and have your client contact Michele.
If you did receive the 2012 survey, you should be receiving email from Michele within the next few days, requesting that you confirm that you’re the right contact or passing it on to the correct contact to do so.
If you’re unsure whether you’re a cloud IaaS provider by this MQ’s definitions, consider the following:
- Are you selling a service? (That means you’re not selling hardware or software.)
- Are you offering compute, storage, and network resources? (You can’t be, say, just a cloud storage provider.)
- Is your offering fully standardized? (It’s identical for every customer, not a reference architecture that you customize.)
- Can customers self-service? (Once approved as customers, they can go to your portal and push buttons to immediately, with zero human intervention, obtain/destroy/configure/manage their infrastructure resources. Managed services can be optional.)
- Can you meter by the hour? (You can either sell by the hour, or you can offer monthly capacity where usage is metered hourly. Having to take a VM for a full month is hosting, not IaaS.)
- Do you have at least one multi-tenant cloud IaaS offering? (Customers must share a capacity pool for the offering to be considered multi-tenant.)
- Do you consider your competition to be offerings such as Amazon EC2, Verizon Terremark’s Enterprise Cloud, or CSC’s CloudCompute? (If not, you’re probaly confused about what cloud IaaS is.)
Please note that receiving a survey does not in any way indicate that we believe that your company is likely to qualify; we simply allow surveys to go to all interested parties (assuming that theyâre not obviously wrong fits, like software companies without an IaaS offering).
The status for this Magic Quadrant will be periodically updated on its status page.
Every time there’s been a major Amazon outage, someone always says something like, “Regular Web hosters and colocation companies don’t have outages!” I saw an article in my Twitter stream today, and finally decided that the topic deserves a blog post. (The article seemed rather linkbait-ish, so I’m not going to link it.)
It is an absolute myth that you will not have downtime in colocation or Web hosting. It is also a complete myth that you won’t have downtime in cloud IaaS run by traditional Web hosting or data center outsourcing providers.
The typical managed hosting customer experiences roughly one outage a year. This figure comes from thirteen years of asking Gartner clients, day in and day out, about their operational track record. These outages are typically related to hardware failure, although sometimes they are related to service provider network outages (often caused by device misconfiguration, which can obliterate any equipment or circuit redundancy). Some customers are lucky enough to never experience any outages over the course of a given contract (usually two to three years for complex managed hosting), but this is actually fairly rare, because most customers aren’t architected to be resilient to all but the most trivial of infrastructure failures. (Woe betide the customer who has a serious hardware failure on a database server.) The “one outage a year” figure does not include any outages that the customer might have caused himself through application failure.
The typical colocation facility in the US is built to Tier III standards, with a mathematical expected availability of about 99.98%. In Europe, colocation facilities are often built to Tier II standards intead, for an expected availability of about 99.75%. Many colocation facilities do indeed manage to go for many years without an outage. So do many enterprise data centers — including Tier I facilities that have no redundancy whatsoever. The mathematics of the situation don’t say that you will have an outage — these are merely probabilities over the long term. Moreover, there will be an additional percentage of error that is caused by humans. Single-data-center kings who proudly proclaim that their one data center has never had an outage have gotten lucky.
The amount of publicity that a data center outage gets is directly related to its tenant constituency. The outage at the 365 Main colocation facility in San Francisco a few years back was widely publicized, for instance, because that facility happened to house a lot of Internet properties, including ones directly associated with online publications. There have been significant outages at many other colocation faciliities over the years, though, that were never noted in the press — I’ve found out about them because they were mentioned by end-user clients, or because the vendor disclosed them.
Amazon outages — and indeed, more broadly, outages at large-scale providers like Google — get plenty of press because of their mass effects, and the fact that they tend to impact large Internet properties, making the press aware that there’s a problem.
Small cloud providers often have brief outages — and long maintenance windows, and sometimes lengthy maintenance downtimes. You’re rolling the dice wherever you go. Don’t assume that just because you haven’t read about an outage in the press, it hasn’t occurred. Whether you decide on managed hosting, dedicated hosting, colocation, or cloud IaaS, you want to know a provider’s track record — their actual availability over a multi-year period, not excluding maintenance windows. Especially for global businesses with 24×7 uptime requirements, it’s not okay to be down at 5 am Eastern, which is prime-time in both Europe and Asia.
Sure, there are plenty of reasons to worry about availability in the cloud, especially the possibility of lengthy outages made worse by the fundamental complexity that underlies many of these infrastructures. But you shouldn’t buy into the myth that your local Web hoster or colocation provider necessarily has better odds of availability, especially if you have a non-redundant architecture.