If you thought cloud competition couldn’t get hotter, think again

Chinese e-commerce giant Alibaba has opened a data center hub in Silicon Valley, adding yet another gigantic player to a growing, but already hotly-contested cloud computing market.

Aliyun, Alibaba’s cloud computing arm, has been likened to Amazon.com’s Amazon Web Services unit and you can bet that [company]Amazon[/company], as well as [company]Google[/company] and [company]Microsoft[/company], are watching this development closely. Those American cloud giants are focused on boosting business and operations outside the U.S. — Microsoft and Amazon have presence in China, for example, and now Aliyun will return the favor with its first US-based data center.

The initial plan is for the Aliyun data center, the exact location of which was not disclosed, to target Chinese companies based in the U.S. and to expand from that base. In a statement Aliyun VP Ethan Sicheng Yu said:

… the ultimate objective of Aliyun is to bring cost-efficient and cutting-edge cloud computing services to benefit more clients outside China to boost their business development.

The U.S. expansion comes at an interesting time politically as well — relations are tense between the Chinese and U.S. governments and both sides have accused the other of spying on each other and using native tech companies to help in this effort.

Aliyun’s current data centers are in Hangzhou, Qingdao, Beijing, Shenzhen and Hong Kong.

Cloud options mean decisions, decisions for IT buyers

Much has been written about cloud consolidation, with M&A roiling the cloudscape over the past few months: Cisco bought Metacloud, EMC bought CloudscalingHP snapped up Eucalyptus. Despite all that, cloud deployment options abound, and choice will be a big theme at the upcoming Structure 2015 event, this June in San Francisco.

First, there is more choice than ever in public cloud. Sure, Amazon Web Services leads the market-share race by a wide margin. But viable options are available — from Microsoft Azure to Google Cloud Platform to vCloud Air to Digital Ocean to CenturyLink. What many of us tend to forget is that, despite all the cloud talk, we’re still very early in the game when it comes to business deployment. There’s a ton of opportunity out there. Is it enough to float all boats? That’s the zillion-dollar question.

We will discuss those options, and how even the biggest enterprises — General ElectricWalmart — are deploying more of their IT on cloud. The question is no longer if, but when.

At this year’s event, we’ll welcome back [company]Amazon[/company] CTO Werner Vogels, Khosla Ventures founder Vinod Khosla, [company]Microsoft[/company] EVP Scott Guthrie, Google SVP Urs Hölzle, Battery Ventures technology fellow Adrian Cockcroft and DataGravity CEO Paula Long.

We’ll hear from first-timers, too: Canonical founder Mark Shuttleworth, Digital Ocean CEO Ben Uretsky, CoreOS CEO Alex Polvi. And, on the end user side, we’re really excited to bring on stage National Football League CIO Michelle McKenna-Doyle, FBI CISO Arlette Hart and Pinterest head of engineering Michael Lopp. More names to come.

For a refresher of last year’s event, here’s a sampling of some favorite sessions:

Google’s Urs Holzle:

[youtube https://www.youtube.com/watch?v=I9R4P0TLViA]

Facebook’s Jay Parikh:

[youtube https://www.youtube.com/watch?v=F9FYTbxWK1o]

Intel SVP Diane Bryant:

[youtube https://www.youtube.com/watch?v=HTXuwqLUw7M]

Amazon’s Werner Vogels:

[youtube https://www.youtube.com/watch?v=oZPlr2-KMnw]

Microsoft’s Scott Guthrie:

[youtube https://www.youtube.com/watch?v=TImzXnUaO0A]

AWS maintains lead in public cloud, but Azure inches forward

Amazon Web Services continues to dominate public cloud usage across the board, but Microsoft Azure is making strides at least in business accounts, according to a new RightScale survey.

[company]Amazon[/company] cloud adoption leads the pack with 57 percent of respondents reporting use of AWS (up from 54 percent last year) while 12 percent said they run [company]Microsoft[/company] Azure Infrastructure as a Service, up 6 percent from last year’s survey.

Among business or enterprise users, though, while AWS still leads with 50 percent, up slightly from 49 percent, Azure IaaS scored 19 percent, up from 11 percent.  [company]Rackspace[/company] and [company]Google[/company] App Engine are the next most popular clouds in this category, while vCloud Air logged 7 percent adoption, down from 18 percent. (Could the rebranding of vCloud Hybrid Services to vCloud Air have been a factor here?)

The Rackspace callout is interesting since the company said Tuesday it will stop breaking out public cloud and private cloud revenue and report them together. Rackspace is now focusing on private, managed cloud, in what some say shows it is ceding public cloud to the big guys.

RightScale Enterprise Cloud 2014-2015

All of these numbers are based on RightScale’s survey (downloadable here) of 930 cloud users, 24 percent of whom are RightScale customers.

Private cloud boosters won’t like this part: The new numbers show overall adoption of private cloud pretty much holding steady compared to last year. [company]VMware[/company] vSphere virtualized environments led with 53 percent of enterprise customers who reported that they use it as a private cloud. (Another 13 percent said they use vCloud Director as cloud.) This echoes last year’s survey in which many customers equated their virtualized server rooms with private cloud.

While private cloud appears to be in a bit of a swoon, it’s no surprise that Docker usage is hot. Per the survey, that containerization technology, while relatively new, is already used by 13 percent of respondents, while more than a third of the rest (35 percent) said they are planning to implement it.

Rightscale Public Clouds 2014OpenStack showed the greatest traction this year, with 13 percent adoption, growing by three percent year over year and still garnering big interest from companies whether they use it or not. A full 30 percent of respondents said they were evaluating or interested in using OpenStack over time. Microsoft’s relatively new Azure Pack showed a respectable seven  percent usage. Azure Pack, which mirrors Microsoft’s internal Azure usage, can run in a company’s own data centers or server rooms to provide an Azure-on-Azure hybrid.

Overall, Santa Barbara, California–based RightScale concluded from its research that cloud adoption is “a given” and hybrid cloud is the preferred mode of adoption. Of course RightScale offers multi-cloud management tools so that works out nicely for them.

RightScale VP of Marketing Kim Weins was our Structure Show guest after last year’s survey and had some interesting insights that might be helpful to compare and contrast. Check out the podcast below.

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Private cloud? Public cloud? Rackspace erases the difference

Rackspace is going to stop distinguishing between the money it makes from public cloud and what it derives from “dedicated” cloud, a category that encompasses a bunch of options.

Well that’s one way to sidestep the whole “is private cloud dead?” debate.

The move may show a fanatical obsession on managed cloud or indicate that Rackspace is giving up on public cloud where leader, [company]Amazon[/company] Web Services, is contending with growing threats from [company]Microsoft[/company] Azure and[company] Google[/company] Cloud Platform. Or both. Tomato, tomahto.

On the fourth quarter earnings call Tuesday, CEO Taylor Rhodes reiterated that “managed cloud” versus the wild-west of unmanaged public cloud is where [company]Rackspace[/company] is focused. And its financial earnings will reflect that going forward. No longer will Rackspace put its public cloud revenue in one bucket and combined private cloud, managed hosting, managed services all into the dedicated cloud revenue bucket.

In an interview after the call, Rhodes acknowledged that most new “greenfield” applications will be built for public cloud deployment over a ten-year time frame. But, there are also many legacy applications that will stay either stay where they are or move to a single-tenant private cloud situation. And there is demand for well-managed specialized clouds for different workloads, Rhodes said.

rax q4 2The accounting changes were made in part to keep Rackspace sales people from selling the wrong cloud to the wrong customer, he said. “We have a dilemma in that we switched from a horizontal position in cloud … to [cloud for] particular workloads. We want to be the best at supporting Oracle commerce and we will be the best at managing that with a highly opinionated point of view on whether Oracle commerce should be a single-tenant or multi-tenant implementation.” I’m guessing that single-tenant will be the answer here.

Rackspace sales people shouldn’t be rewarded “perversely” for selling multi-tenant when single tenant is best, he said.

Overall, the company posted net income of 26 cents per share, surpassing consensus estimates of 19 cents per share, but it missed on revenue, logging $472.2 million where analysts expected $474 million.

rax public cloud ytd

The poor private cloud gets no respect

Pity your private cloud, if you have one. If cloud analysts are to be believed, private cloud is losing ground as public cloud providers — chiefly Amazon Web Services, Google, and Microsoft — keep adding features and functions, many of which target enterprise IT buyers.

Last week, for example, Gartner analyst Thomas Bittman blogged that 95 percent of enterprise IT types he surveyed found something lacking in their own private clouds. Of course Bittman loaded the gun for them, distilling the reasons “your enterprise public cloud is failing”  into six key categories and then polling an audience about them at an event.

Part of the problem may be in definitions. Private cloud is not merely a highly virtualized data center. It needs to deliver on-demand services easily and offer the sort of scale-up-and-down-as-needed elasticity that is the hallmark of public clouds. In a response to one comment on his post Bittman defined private cloud as the

cloud computing style delivered with isolation. Fully private would be fully isolated. It doesn’t need to be owned and managed on-premises, but today it often is (I’d say, 90-95% of the time).

Of the 140 companies Bittman surveyed, the most common reason for dissatisfaction (noted by 31 percent of respondents) is that too much emphasis was placed on cost-cutting, not on providing agility in creating, spinning up and down capabilities as needed. The second most-cited complaint, for 19 percent of respondents, was that their private cloud doesn’t do enough. But check out the whole post, along with the comments.

In August Gigaom Research published its own analysis showing public cloud options outstripping private clouds (subscription required) for several reasons. Notably, even if you are running a real private cloud — not just a heavily virtualized server room — you are probably still buying, deploying and maintaining your own hardware and software.

Gigaom research analyst David Linthicum — who is also SVP at Cloud Technology Partners, which works with the big public cloud providers — noted in that report that security, or lack thereof, has been touted as a key private cloud selling point but is not necessarily a differentiator in the way most people expect. He wrote:

Private clouds, while they feel more secure since you can see the blinking servers in your data center, are as secure or less secure than public clouds, generally speaking. Enterprises are just discovering this fact, and are opting for public clouds as cloud projects come on-line.

Ouch. Private cloud purveyors, please feel free to comment below.

Philip Bertolini, CIO of Oakland County, Michigan, said to term private clouds as failures because there is not 100 percent satisfaction is unfair. In the Gartner blog post, he noted, Bittman discusses how 95 percent of the users have had problems but that doesn’t mean their efforts failed.

“Moving to the cloud is difficult and has to be planned out carefully. Any IT project requires good planning or the results can be less than desirable. I do believe that the is not the magic wand for everything that troubles us. Using the cloud wisely with good planning can be very successful,” Bertolini noted by email.

There is some merit to the private-cloud-doesn’t-meet-expectations argument. Vendors have fed into that by overselling the technology, for one thing. But, the notion that a small number of public cloud vendors (even vendors as huge as [company]Amazon[/company], [company]Google[/company] and [company]Microsoft[/company]) can fill every need is a stretch.

As more than a dozen vendors, many of them pitching OpenStack-based private clouds, duke it out, they need to counter this perception that public cloud is becoming the inevitable destination for many, many workloads going forward.

This story was updated on February 12 with quotes from Oakland County CIO Philip Bertolini and on February 13 with a note of David Linthicum’s affiliation with CTP.

VMware wants all those cloud workloads “marooned” in AWS

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Even though VMware initially called its Amazon competitor vCloud Hybrid Services, make no mistake, it’s the company’s public cloud (now renamed vCloud Air.)

And, [company]VMware[/company] really wants workloads that might run ow on [company]Amazon[/company] Web Services to come on over, says Bill Fathers, EVP and GM of cloud services for VMware.  That’s a tall order. Face it, AWS has been around as, an old boss would have said since “Hector was a pup.” The first services launched in 2006, and vCloud Air is, what?? a two-year old toddler. Fathers said VMware now has thousands of customers on vCloud Air  but said that wasn’t the plan. Initially, VMware wanted a few hundred key companies to act as “beachhead clients” who derive real value from its cloud, especially from vCloud Air’s networking infrastructure and has surpassed that goal, he said.

But Fathers point is that a small percentage of total computing is now running on any public cloud — he thinks it’s now 5 percent up from the two to three percent he thought it was last June at Structure. Which means that there’s a ton of work up for grabs.

And while AWS looks to be the enemy for VMware’s cloud, the same is not true for Google — VMware last week announced plans to offer and support four Google services including BigQuery, on vCloud Air.  This week it brought out its promised Integrated OpenStack. 

Fathers positions both the Google relationship and this week’s Partner Exchange announcements. And he’s clearly not backing away from a fight with the biggest of big clouds.

Bill Fathers, VMware EVP and GM cloud services

Beyond the VMware universe there was a bit of big data moving and shaking with Cloudera buying Explain.io and its self-service query modeling expertise and Datastax picking up Aurelius, the keeper of the Titan graph database. Could this be a sign of even more M&A to come? That’s something we’ll hear more about at Structure Data from March 18-19 in New York from the CEOs of Cloudera, Hortonworks and other data powerhouses, so book your tickets now.

Ok, the gratuitous plug is now done, it’s time to listen.

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Internap expands OpenStack public cloud push

Internap is now offering OpenStack-based public cloud services for the enterprise-rich New York metropolitan area from its Secaucus, New Jersey data center.

Atlanta-based Internap paints its OpenStack-based AgileCLOUD as a “scalable public cloud” with dedicated CPU options and all-SSD storage. The OpenStack option is already available from Internap’s Dallas, Montreal and Amsterdam facilities.

The company launched its first OpenStack public cloud services four years ago but is playing the field, offering  private cloud options running on VMware technology as well as bare metal services.

Until recently, when it came to cloud infrastructure, OpenStack and VMware was seen as an either/or option. Now, with [company]VMware[/company] just having launched its own Managed OpenStack, things are getting more nuanced. Companies including [company]HP[/company], Mirantis, [company]Rackspace[/company], [company]Red Hat[/company] and now VMware are all pushing what they say are enterprise-ready OpenStack clouds.

How well is vCloud Air doing? Who knows?

VMware has pinned high hopes on its vCloud Air hybrid cloud, the company’s response to public cloud competitors like Amazon Web Services. But there’s not a ton of information on just how well that cloud is doing in the market.

Those hoping for more details on the company’s fourth quarter conference call Tuesday night had to make do with this:

The category containing vCloud Air — VMware’s hybrid cloud and SaaS products — made up “just under five percent” of total revenue but showed a year-over-year growth rate of 100 percent, according to CFO Jonathan Chadwick. That would put revenue for that segment at about $85 million out of total revenue of $1.7 billion for the quarter ending December 31, 2014.

Chadwick also cited a new vCloud Air deal with”one of the largest pharmaceutical companies looking to shift their current on premise infrastructure to a hybrid model.”

[company]VMware[/company] thus becomes the fourth legacy IT company in two weeks — after IBM, Microsoft and [company]SAP[/company] — to prompt worries that the sales of shiny new stuff like SaaS and cloud is not close to replacing the dough generated from legacy cash cows that still sell a ton but whose growth is slowing.  In VMware’s case the cash cow would be vSphere and related virtualization gear that companies use to run their own data centers and server rooms.

Perhaps worse is that sales of the new stuff will cannibalize sales of the old stuff, which makes Wall Street nervous.

On the call, VMware CEO Pat Gelsinger stressed vCloud expansion over the past year — adding a new region in Australia in November, for example.

The worry among VMware partisans is that the company, as profitable as it is (it logged a profit of $326 million in Q4, down from $335 million the same time a year ago) cannot build out cloud on the scale the way [company]Amazon[/company] or [company]Microsoft[/company] can. To achieve that sort of scale, VMware hosts vCloud Air itself for large customers but also fields a network of third-party providers that offer vCloud Air. That gives it more scale but also sets up a scenario in which it is competing with its own service provider partners.

vCloud Air debuted in the summer of 2013 so it’s playing catchup with 9-year-old AWS. But, like Microsoft, VMware has tons of enterprise accounts and it’s banking that those companies will feel more comfortable using VMware’s enterprise-oriented cloud over a pure public option.

For more on VMware’s cloud strategy, check out VMware Cloud EVP Bill Fathers’ talk at Structure 2014.

[youtube https://www.youtube.com/watch?v=o_j_107CVfI]

Datapipe snaps up GoGrid as (sigh) cloud consolidation continues

It’s three weeks into 2015 and here’s the first cloud deal of the year: Managed service provider Datapipe is buying GoGrid, an infrastructure-as-a-service vendor that has been morphing into a big data specialist. Terms were not disclosed, but the deal indicates that the consolidation that swept the cloud provider market in 2014 continues, as some predicted.

[company]GoGrid[/company], with its big data expertise — it recently partnered with Cloudera to accelerate enterprise Hadoop deployments —  will boost Datapipe’s quest to become a global provider of managed services across workload types, [company]Datapipe[/company] CMO Craig Sowell said in an interview.

Datapipe, headquartered in Jersey City, New Jersey, hasn’t been shy about using acquisitions to further its cloud agenda: In September 2013, it bought Newvem, a provider of [company]Amazon[/company] Web Services monitoring and optimization services, and last August it purchased Layered Tech, an MSP specializing in federal government implementations. Terms were not announced there either.

Wanted: Scale across geographies and workloads

[company]Newvem[/company] was a strategic acquisition to gain expertise in analyzing and optimizing AWS, as Datapipe provides managed AWS services. “We saw the explosion of data that AWS usage generates required a big data tool to understand it and [company]Layered Tech[/company] was about expanding into the federal government market — they had FISMA and provisional FedRAMP compliance and we expect ot be fully FedRAMP compliant shortly. That will let us bring managed AWS to federal accounts,” Sowell said.

FISMA, or the Federal Information Security Management Act of 2002, is a framework for protecting government information and operations against natural or man-made threats while FedRAMP (Federal Risk and Authorization Management Program) is a standard way to vet or approve cloud computing deployments. AWS achieved its FedRAMP certification about two years ago.

By buying GoGrid, Datapipe also adds new data center coverage in San Francisco and Amsterdam to its roster, which already includes data center presence in Shanghai; Iceland, London; Singapore; and 8 other U.S. locations.

Datapipe is already a global provider, Sowell said, but acknowledged the need to keep scaling and delivering more services worldwide across all workloads and segments is the plan.

Datapipe’s sales pitch is that it can act as the IT arm of an account and manage multiple cloud vendors, taking that off the plates of internal staff. Datapipe supports VMware for private and hybrid cloud, but in the public cloud space it remains focused on AWS only.

Sooo, who’s next on the block?

With GoGrid gone, along with Metacloud (now part of Cisco), Eucalyptus (now [company]HP[/company]), Cloudscaling (now [company]EMC[/company]); and SoftLayer (now [company]IBM[/company]), the question of who’s next arises yet again.

Doubtless all eyes will again turn to Rackspace, which apparently was too rich for IBM’s blood a few years ago. But there are a bunch of other still-independent entities such as CloudSigma, [company]Digital Ocean[/company], [company]Joyent[/company], [company]Mirantis[/company]  and [company]ProfitBricks[/company] still out there.

A reasonable person might think that some of the legacy enterprise software companies — Oracle? SAP? — might still be in the market for more cloud expertise.

Datapipe data center map

GE tech guru high-fives the public cloud

Despite the success of Amazon Web Services, and the resources Microsoft and Google have poured into Azure and Google Cloud Platform respectively to compete with AWS, public cloud still has a bit of a perception problem. Many companies still view the use of shared, multi-tenant architectures askance — something not quite trusted for mission critical workloads.

That’s why it’s a fairly big deal when the CIO of [company]General Electric[/company], staple of the Fortune 10, says it’s “all-in” for public cloud. [company]GE[/company], after all is pretty much the reference account to end all reference accounts with its market cap north of $230 billion, and which offers everything from financial services to household appliances to cat scanners and jet engines.

In a Q&A in October, GE’s Chris Drumgoole told InfoWorld that “north of 90 percent” of all the applications deployed by the company last year were in a public cloud environment. Further, he said:

” We have a model where we’re operating outside of our four walls in someone else’s environment, but we’ve been able to ensure that GE data — compute, memory, and storage — remain single-tenant, even though we may be in a multitenanted data center.”

So there, public cloud haters. It was not all that clear how many public cloud vendors GE  uses but Drumgoole mentioned AWS and [company]Microsoft[/company] Azure in passing.

“…we really view ourselves to be a service provider to our businesses, so our businesses can buy from us or they can buy from others. The best way to think about it is if you’re my oil and gas division you can come to me, as corporate IT, and buy Amazon in order deploy your applications or you can go to [company]Amazon[/company] directly or you can go to Azure directly.”

But the vendor that got the biggest shout out was [company]Cloudability[/company], which monitors multiple clouds for customers and helps with cost tracking and assessment.

We’re big fans of a tool called Cloudability, which provides actual visibility into the data. If I want to see what something costs, I log into my Cloudability instance.

OpenStack installs 2015 regime

In other cloud news last week, on Friday the OpenStack Foundation announced 2015 board members elected from a full roster of candidates. Eight new individual directors — chosen from a list of 27 candidates — are Tim Bell of CERN; Russell Bryant of [company]Red Hat[/company]; Alex Freedland of [company]Mirantis[/company]; Rob Hirschfeld of RackN; Vishvananda Ishaya of [company]Nebula[/company]; Kavit Munshi of [company]Aptira[/company], Egle Sigler of [company]Rackspace[/company] ; and Monty Taylor of [company]HP[/company].

Members elected from the 8 companies at the foundations highest Platinum Member tier are: Alan Clark of [company]SUSE[/company]; Eileen Evans of HP; Toby Ford of AT&T; Van Lindberg of Rackspace; Mark McLoughlin of Red Hat; Todd Moore of [company]IBM[/company]; Imad Sousou of [company]Intel[/company] and John Zannos of [company]Canonical[/company]. Newly elected directors from the 17 Gold Member companies are Simon Anderson of [company]Dreamhost[/company]; Robert Esker of NetApp; Tristan Goode of Aptira; Steven Hallett of [company]Symantec[/company]; Chris Kemp of [company]Nebula[/company]; Boris Renski of Mirantis; Sean Roberts of [company]EMC[/company] and Lew Tucker of [company]Cisco[/company].

At a glance what is notable here is that Symantec, which just joined the foundation a month ago, is represented at the Gold level but Piston and [company]Yahoo[/company] are nowhere to be seen. Also, Randy Bias, co-founder of Cloudscaling is no longer on the board, although EMC — which bought Cloudscaling last year is represented by Sean Roberts.

One of three bylaws also approved by foundatio membership is a change to OpenStack trademark policy around the adoption of DefCore procedures, although from the verbiage it’s not clear to me what this means exactly, so stay tuned on that. DefCore is, for lack of a better word, a set of rules that defines what OpenStack is, what features it should include and certifications against which OpenSack implementations are judged. The goal is to ensure a degree of interoperability between different vendors’ OpenStack implementations — so one vendor cannot innovate changes that are incompatible with the OpenStack standard and still call it OpenStack.

Can policy be built into applications?

Wouldn’t it be nice if, when you enter your privacy settings on Facebook or other applications, you could be sure those settings will be enforced through the life of that product. So, when you don’t want your face tagged in photos, it cannot be tagged even by someone else.

That’s the type of problem MIT Ph.D candidate Jean Yang is working on. As things stand now, it’s very hard for developers to write privacy rules right into their code. Yang’s Jeeves project aims to make that less of a hairball going forward.Check out our chat with her about halfway through this week’s podcast. Oh, and she also weighs in on the Reddit AMA she and two other female Ph.D candidates hosted last month.

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MIT Ph.D. candidate Jean Yang.

MIT Ph.D. candidate Jean Yang.

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Note: This story was updated at 10:02 a.m. PST to reflect that the Chris Drumgoole interview actually happened in October, not last week. Credit the reporter’s brain cramp for the mistake. His point still stands, but it’s not as fresh as I thought.