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Mass TLC Cloud Summit: Top 10 Key Points from Keynotes

The Mass TLC Cloud Summit, “Doing the Cloud Right:  From the Real Practitioners,” was held on October 8.   A central theme echoed by each of the three keynote speakers was the extent to which cloud computing empowers business users to operate with the speed and agility they need, sometimes in spite of their colleagues in IT.  Here is a summary of each presenter’s discussion, a link to their presentations, and my Top 10 list of their key points:

Ariel Tseitlin, Director of Cloud Services for Netflix, led off the session.  Netflix uses an Amazon based public cloud to deliver 1 billion hours of content per month to 38 million viewers in 40 countries.  Netflix has built a highly scalable and available platform as a service to run this network, and has open sourced it as Netflix OSS.

Netflix is committed to moving all of its corporate systems to SaaS.  Email now runs on Google, instead of Exchange.  Expense management runs on Workday, instead of Concur.  Document sharing runs on Box, instead of on file servers.  Credit card and big data analytics will be the next to move.  Netflix’s reliance on SaaS and open sourcing of their OSS indicate their focus on their core business.  Their core competence is not in operating networks or running applications, but in delivering content.  And now, having made history as the first non-TV network to win an Emmy award (for “House of Cards” director David Fincher), Netflix can also add content creation as a strength.

Here are some of the key points from Ariel’s presentation.

  1. Prevent application failures by designing them right.  With a highly available architecture providing redundancy at multiple levels, Ariel focuses on the high probability failure modes.   Application failures are at the top of the list.  Ariel’s approach to reducing the likelihood of application failures is to ensure that developers run the applications they write, and take responsibility for any failures.   After a few wake-up calls in the middle of the night, application developers learn how to write more robust applications.
  2. Find problems and fix them fast.  Since Netflix has content as its core competence, not network operations, they don’t want to have to scale their 120 member operations team linearly as their service grows.  Pay people to build very smart alerts, not to monitor screens.  Build redundancy into the underlying infrastructure, so you can monitor services, not instances.
  3. Raise efficiency by using batch processing in low  resource consumption periods.   Netflix accounts for 1/3 of all North American peak period downstream internet traffic.  Peaks are about 10 times the trough.  Netflix uses Amazon reserved instances for base footprint and augments with bursting as needed.  They fill the troughs with batch loading.

Allison Mnookin, VP & General Manager of Intuit QuickBase, was next to take the stage at the Mass TLC Cloud Summit.  She discussed how cloud computing empowers business users to respond to customers by doing custom application development on their own, rather than having to rely on IT.   Her presentation built on the concepts of such business users, which Gartner refers to as  “citizen developers,” and Forrester calls “HEROs” (Highly Empowered and Resourceful Operatives).

In her presentation, Allison shared the results of Intuit QuickBase’s survey of 903 information workers in firms with more than 100 employees.

  1. 50% are acting on their own to build their own business applications, up from 33% in 2009.  Those feeling empowered by doing so grew directly from a reduction on those formerly feeling disenfranchised.
  2. Employees would consider switching jobs to find an environment with more freedom to develop.  28% of all employees would consider switching jobs, and 50% of so-called “rogue” employees would.
  3. Do-it-yourself (DIY) custom app development is significantly faster that relying on IT.  68% of DIYers take less than a week to design a custom web app, whereas 72% say it would take more than a month if they were to rely on an internal development team.

Michael Skok, General Partner, North Bridge Venture Partners was the last speaker to take the Mass TLC Cloud Summit stage.  His presentation covered results from the North Bridge 2013 Future of Cloud Computing Survey, conducted with GigaOM Research.

  1. The three drivers of overall cloud adoption, scalability, agility, and cost, remain consistent relative to last year’s survey.  There ARE differences, depending on the type of cloud service.  Organizations focused on agility and innovation are respectively 5x and 4x more likely to invest in SaaS than in legacy infrastructure.  For IaaS, those focused on shifting CAPEX to OPEX are 2.5x more likely to adopt IaaS than to invest in legacy infrastructure.
  2. As for inhibitors to cloud adoption, security concerns are easing (46% vs 55%), but cost concerns are growing (28% vs 20%).  The key concern is total cost of ownership, not just conversion of infrastructure CAPEX to OPEX.   68% say cloud has about the same or better TCO than traditional IT infrastructure, with the cloud advantage being predictability of spend, not necessarily the straight cost advantage.
  3. Cloud is currently used more extensively for business activities than IT activities.   At least 50% of respondents use four business applications (file sharing, business productivity, CRM, social) in a SaaS model.  No single SaaS IT application (backup, security, systems mgmt, help desk) was used by at least 50% of business respondents.  But this is trend will change, as six of the seven highest growing SaaS applications are in the IT area (big data, mobile, systems mgmt, back-up/DR/BC, help desk, security).
  4. The PaaS market is getting squeezed from above by SaaS players and from below by IaaS players as each build APIs to extend the capabilities of their offers.  This trend is consistent with the focus on APIs by both Intuit and Netflix.

What do you think?  Check out the presentations.   If you attended the MassTLC Cloud Summit, did you come away with different key points?  Let me know what you think.

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Focus your cloud solutions on your power zone

Delivering Customer Experience Management via the Cloud? Focus on your Power Zone

CRM vendors are turning to cloud computing for customer experience management.  The Gartner Magic Quadrant for the CRM Customer Engagement Center highlights the approaches taken by vendors in this space, and illustrates the challenges in targeting both the enterprise and SMB markets.

Large and small companies have different product expectations for customer experience management solutions.  Comprehensiveness of function, integration with on-premise applications, complexity, usability, and time to value will vary in importance across markets.   But the differences go beyond the product.  Sales  and customer support structures for the enterprise market usually involve personal attention by a number of specialized staff.  Those oriented toward the SMB are more self-service, low-touch, and low cost.   As companies consider both ends of the market for their customer experience managment offerings, they should keep in mind their power zone – their core competencies, competitive advantages, and installed base.

Here are a few examples of vendor approaches from the Gartner Magic Quadrant.

Oracle solves this problem with two different solutions for each market.  RightNow Cloud Service (now branded Oracle Service Cloud), delivered in a SaaS subscription model, is listed in the Leaders quadrant, and is noted for its ease of installation, but it does not focus on industry specific processes.  Oracle Siebel CRM, just over the border in the Challengers quadrant, targets the enterprise market with its comprehensive functional coverage, deep industry expertise, and global network of professional services partner.   At the same time, its interface is considered non-intuitive and a bit dated.

Pegasystems, also listed as a Leader, is touted for its ability to model customer behavior and predict the customer’s next best action to execute in order to achieve goals.  It targets enterprises with a highly scalable platform and a range of best practices that spans industries.  On the other hand,  the rules engine and library of best practices may be more than SMB customers need, especially in markets that are less dynamic and complex.

KANA, listed in the Niche quadrant, addresses this issue with multiple business lines focused on government, enterprise, and the SMB, for which it positions KANA Express, its cloud based solution.   Gartner notes that with four business lines, KANA may be challenged to focus on priority areas.

Focusing on your target market is like finding the ideal triathlon distance.  Although races range from sprints of an hour or so, up to Ironman races of 10 times that, I’ve found that my sweet spot is the Olympic distance.  After a 1 mile swim and 26 mile bike, I still have plenty of speed in my legs to run the 10k at a 7:00 pace.  I’ve always done well at the Ashland Lions Olympic Triathlon, but have never seemed to crack the code on the next distance up, at the Patriot Half, a race twice as long.  There, no matter how conservatively I ride on the 56 mile bike leg, I end up walking a portion of the 13 mile run.  I’ve found it a challenge to train for races of radically different lengths.   With limited time, I can either do the speed work necessary to have a fast run at Ashland, or do the extra miles to prepare for Patriot.   A middle of the road approach to both doesn’t seem to work.

Focusing on your power zone may be a good approach for CRM vendors targeting both the SMB and the enterprise markets for their customer experience management solutions.    What do you think?  I’m interested in your feedback.

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