John Katsaros

The Fourth Cloud

Mark Templeton's keynote at Synergy, the annual Citrix users' conference is usually pretty interesting and this year was no exception. Templeton introduced the "Fourth Cloud" — the Personal Cloud — to what has largely been a three cloud world (Public, Private and Hybrid). The Fourth Cloud is an important concept because it defines the place where corporate IT meets the workforce. If IT gets this right, they'll be able to minimize the footprint of what IT has to own and what applications IT has to manage. Templeton's point is that it is in IT's best interests to make this happen since they'll ultimately benefit. He pointed out three essential ingredients for the personal cloud — 1) Context Switching — any to any connectivity, secure where necessary; 2) Self Service (including an apps store and of course things like Google Apps); and 3) Identity and preferences — managing the convergence of personal and work use. Citrix's view of the personal cloud is that it has: A front door that orchestrates delivery, Follow Me apps and data, Authentication /Security (Single Sign On, password management...), Cloud Connectors (for both business cloud and social cloud interactions) and Management (activity, Access Control, SLAs...). The Personal Cloud is a great idea — rentable applications, disposable devices, automatic synchronization, self service, and bridging into consumer apps — offloading from IT functionality and cost that is better acquired as consumer products. At previous Synergy keynotes, Templeton shined a light on the concept of BYOPC (Bring Your Own PC) which eventually has become a familiar phrase. The idea of a Personal Cloud (and IT's relationship to it) fits in nicely and takes BYOPC to the next level.

Apple's Personal Cloud

And speaking of the personal cloud, at this week's Apple's WWDC Steve Jobs introduced iCloud — effectively removing your PC from being the center of your content and putting everything in the cloud. Make a change in your calendar on your iPhone. The change automatically gets pushed up to the cloud and then downloaded to the appropriate devices (he even demoed a shared calendar where everyone gets synched from the cloud). At the core is a completely re-written version of Mobile Me with three main apps — Mail, Contacts and Calendar. What's more, the pricing goes from an annual $99 service fee to FREE. With Apple's backing, the personal cloud may become a reality much faster than the other three cloud types. Apple defines the consumer side and Citrix (and maybe others later on?) define the interconnection between the personal cloud and IT. Data now moves into the personal cloud where it can be synched, the PC becomes just another device with which to synch and automagically it all works.

Cloud Storage

We got a lot of positive feedback from our Startup Cloud Storage Category Table so we're including more names than we had last time — it's our simple way of watching what happens as an interesting segment starts ramping up. So far in this space venture investors have invested $219M in twelve startups. It's likely that even more money will flow into this space and more startups as well. There's already been one casualty. We get a lot of feedback on these lists, so please let us know who else we should include in this category. Send your suggestions to jkatsaros@irg-intl.com

 Our Cloud Storage Startups Wall of Fame

Company	Investment	Investors	Location
Actifio	$24M	ATV, Greylock, North Bridge	Waltham, MA
Cirtas	$32M	LightSpeed, Amazon, Bessemer, NEA, Shasta	San Jose, CA
Ctera		Benchmark	Palo Alto, CA
Eucalyptus	$5.5M	NEA, Benchmark, BV	Goleta, CA
Gluster	$12.5M	Index Ventures, Nexus Venture Partners	Milpitas, CA
Nasuni	$23M	North Bridge, Sigma, Flybridge	Natic, MA
Nirvanix	$45M	Mission, Valhalla, Windward	San Diego, CA
Panzura	$12M	Khosla, Matrix, CTTV and Chevron Tech	San Jose, CA
Scality	$13M	Galileo, Credit Agricole	Paris, France
StorSimple	$21M	Mayfield, Ignition, Index and Redpoint.	Santa Clara, CA
TwinStrata	$8.5M	Avalon Ventures	Natick, MA
Zetta	$22.5M	Sigma, Foundation	Sunnyvale, CA
Total	$219M

Big Data Buzz

You want to stay one step ahead of the other guy. When someone asks you what's new, you can't say "The Cloud" anymore — that's the old new. The new new is Big Data. It's a perfect answer to the "what's new" question because most likely the person who asked you the "what's new" question doesn't want to show that he has no idea what you're talking about and he'll think you're a genius. — especially if you're coming from a world where data was mostly small. The 2011 prize for out buzz wording the other guy should go to EMC whose user conference was subtitled "Cloud meets Big Data" which made for interesting theme logo designs but not much in the way of content on this particular intersection. We work in an industry that loves its buzzwords so thank goodness we've got a new one. Jumping right onto the Big Data bandwagon we've assembled our initial list of venture backed startups addressing Big Data infrastructure. It's interesting that this category is already up to the $100 Million investment level with Cloudera topping the list with almost one third of the total. If you think we've missed your favorite Big Data startup send us a note: jkatsaros@irg-intl.com

 Our List of Interesting Big Data Infrastructure Startups

Company	Investment	Investors	Location
BackType	$1.32M	YCombinator, True Ventures, lowercase, Freestyle	San Francisco, CA
Cloudera	$36M	Greylock, Meritech Capital, Accel	Palo Alto, CA
DataStax	$2.7M	Lightspeed, Sequoia, Rackspace	Burlingame, CA
Datameer	$11.75M	Kleiner Perkins, Redpoint	San Mateo, CA
HStreaming			Chicago, IL
Karmasphere	$5M	Hummer, Winblad, USVP	Campbell, CA
Kitenga			Santa Clara, CA
MapR Technologies	$9M	Lightspeed, NEA	San Jose, CA
Pentaho	$32M	Benchmark	Orlando, FL
StackIQ	$3M	Antham, Avalon	La Jolla, CA
Total Investment	$99.45M+

The Azure Appliance

One of the most interesting announcements of the year was Microsoft's Azure Appliance — a container of 1,000 servers, delivered to your data center, running an up-to-date private version of the Azure Cloud platform. Last year we saw the introductions of Cisco's UCS, the Cisco/VMware/EMC VCE consortium, V-Block system blueprints and Acadia JV, all intended to help their customers achieve utility computing more quickly. Well if that's the goal, isn't something like the Azure Appliance an even better answer? Of course you have to have some respect for the importance of the Windows software and business ecologies, and you have to think Azure is pretty interesting on its own, but with those caveats isn't the appliance version interesting! The initial package (presumably similar to the container level packaging which Microsoft uses to build out Azure and their other large properties) is inappropriate for most but not all (huge chunk of platform, specific cooling and power requirements) but is a natural first step. With the issues of non-Microsoft multi-tenancy and new network topologies understood, a next step of creating smaller packages seems pretty straightforward (Microsoft has already said they are moving to a smaller granularity for their own data centers). What Microsoft clearly understands (or at least Bob Muglia clearly understands) is the difference between having a customer build their own utility solution out of the pieces (Windows Server, Hyper-V, System Center and Virtual Machine Manager, SQL Server, Exchange, SharePoint,...) and giving them an up-to-date and evolving platform is pretty dramatic. UCS and VBlock customers are still dependent on the product development and release cycle of VMware, EMC, Cisco and others, and still fully responsible for the pain and anguish of integrating new versions.

The Messaging Fabric Report

We're pleased to announce our intent to create a new research report on the role of messaging infrastructure in the quickly evolving landscape of IT. This is the infrastructure that runs between the outside world and the systems that provide mailboxes internally — all big companies have it in some form. It seems to us that with the changing demands on email (e.g., compliance, DLP) and the evolving email alternatives (e.g., malware filtering in the Cloud or even mailboxes in the Cloud) this infrastructure layer could play an even more important role in the future orchestrating all the pieces. We're going to invite vendor participation in the effort in the form of briefing us on their offerings and market participation, and, helping us contact representative customers to better learn about the usage and business value of the solutions they provide.  We'd also like to hear from organizations running large e-mail systems.  For now we're calling it "The 2010 Messaging Fabric Report" and are planning on completing it soon.  If you're interested send us a note: jkatsaros@irg-intl.com.

The Messaging Fabric Report

We're pleased to announce our intent to create a new research report on the role of messaging infrastructure in the quickly evolving landscape of IT. This is the infrastructure that runs between the outside world and the systems that provide mailboxes internally — all big companies have it in some form. It seems to us that with the changing demands on email (e.g., compliance, DLP) and the evolving email alternatives (e.g., malware filtering in the Cloud or even mailboxes in the Cloud) this infrastructure layer could play an even more important role in the future orchestrating all the pieces. We're going to invite vendor participation in the form of briefing us on their offerings and market participation, and, helping us contact representative customers to better learn about the usage and business value of the solutions they provide.  We'd also like to hear from organizations running large e-mail systems.  For now we're calling it "The 2010 Messaging Fabric Report" and are planning on completing it in July.  If you're interested send us a note: jkatsaros@irg-intl.com.

Risky Cloud Stuff

If there's one thing that the banking collapse taught us all was that in the long term, you can't ignore the risk factors in a business. Risk has a nasty habit of landing on your front doorstep when it's least welcome — just ask someone who worked for Lehman. In a similar but different way, cloud computing has collateralized risk in a way which might come back to haunt us. Just a few years ago when a group wanted to create a new product they'd often have to build a data center for development, test and deployment. If it was a start-up, venture capital was used to pay for the data center with the investors essentially holding the risk if something went wrong. With Cloud Computing the risk taker, while still present, has changed. Instead of building their own datacenters, startups now use their credit cards and rent computing power from companies like Amazon. Essentially the server providers who in the past had customers with multi-year managed server contracts (little risk) now have customers with no commitments at all, just monthly MasterCard bills. From a risk perspective, the risk moved from the venture investor (or whoever funded product development) to the service provider. This doesn't sound like too big of a deal unless the service provider inadequately accounts for the risk that they're facing. For instance, what if the service provider didn't adequately account for utilization and server demand surged with unexpected consequences. In the past, this sort of risk was borne by the investors and the company developing the product which could lose its investment if it got things wrong — but it could only hurt itself. In our new world the risk is spread across the entire customer base of a cloud service provider who may not completely understand the impact of a surge and inadvertently bring down a large portion of their customer base and anything else that might be running on their system. The risk that came with bringing new services online is still there; it's just taken a completely different form, might not be fully understood and could come crashing down when you least expect it. — Sound familiar?

The Cloud as Supply Chain Management

In his CA keynote, Dr. Ajei S. Gopal, EVP of the Products and Technology Group, introduced the best simple way of understanding the ongoing transition to "Cloud" computing that I've heard so far. He said that IT is going through a transition very much like what manufacturing has gone through for many companies over the last decade. For example, today Cisco manufactures essentially nothing, instead using a network of contract manufacturers and logistics specialists. Ajei's point was that if you're part (say) of Cisco's Global Supply Chain Management team ("manufacturing") your mission is getting high-quality products quickly to Cisco's customers at the lowest possible cost (where "high-quality" and "quickly" are complex issues). If a company does its own manufacturing there is the risk of focusing on (say) the fact that you are best-of breed at wave soldering 21-layer PC boards, and thinking that's what counts the most, whereas the supply chain mission is pure and aligned with the business. Legacy IT shops are very much like legacy manufacturing. Moving forward, more and more options open up for outsourcing aspects or all of IT (e.g., use of SP resources, SaaS, ...). The new (and better aligned) IT mission is a direct analogy: how can you deliver high-quality, agile services and applications to the business at the lowest possible cost?

Fanboy

We're not trying to be Simon Crosby fanboys but it is sure fun to watch Simon (Citrix's CTO of the Data Center and Cloud Division) in a panel discussion because he clearly explains complex concepts and put misconceptions to rest. This week during an Interop keynote panel discussion Simon took on the notion that enterprise private clouds will only be housed on enterprise locations by pointing to the IRS (which already has much of its data housed in third party data centers and to service providers like Terremark which, by specializing in managed services, houses its customers' data in locations that are much more secure than their customers could ever match and protect these locations with armed guards). Simple, easy to understand and convincing. The Interop Panel Keynote can be found here.