John Katsaros

Collaboration

A big word - News of Cisco's scaling down of its efforts in the collaboration arena doesn't surprise us. We've always said – collaboration is the hardest topic to chase after because it's about everything – every computer that's running – from those that were built decades ago to those that are yet to come onto the market. It's really hard for technologists to "get it right" when it comes to working in the collaboration area because for every idea that you'll have you're bound to find someone who thinks it's a good idea. So bad ideas can't be dismissed as easily as in other markets. For instance, Cisco's acquisition of PostPath was unfortunate in that it took time and money away from other areas where Cisco needed to be. Cisco didn't need to be in the e-mail software business. Microsoft has been defeating all comers in the e-mail space for almost two decades – you name it – Oracle, IBM, Lotus, Novell and many more – were defeated in the business. And it's not clear what Cisco would have had to gain in the process. But that word "collaboration" can be used to justify a lot of things.

Say It Ain't So

Although I'm not card carrying member of the Muglia FanBoy Club, I do admire his accomplishments (and by the way think he's a nice guy). Microsoft is making a mistake by letting him go after 23 years. I don't pretend to know the issues and I'm sure everyone is trying to do their best but the outcome seems wrong. The fact is that Microsoft is a better company with Bob M. than it is without him. His accomplishments are many. We've seen this scenario played out many times and it always turns out the same — senior exec leaves, takes new job with nice future — old company still left with unresolved problem. 

"Don't Let Me Down"

It's been two weeks since Facebook unveiled its new messaging service and so far the world seems to be pretty much what it was before.  Facebook execs called it everything from a "modern" messaging service to a "Gmail killer" except they didn't call it JAMS — Just Another Messaging Service.  After years in the e-mail business, it's pretty clear that it takes a marketing group several years before they really understand the market well enough to find their niche.  Messaging is one of the most difficult markets to understand.  That's because on the outside things look pretty simple — "it's just e-mail isn't it?" but finding the sweet spot is complex because ... e-mail is the most popular application on the planet.  e-mail works on almost every computer, handheld, tablet, mainframe, mini, micro ever built and will work on anything new that comes out in our lifetimes.  And its popularity is what makes it such a difficult area for marketers to understand — because it is so widely used, every marketing hypothesis that you dream up is valid — you can say, as Facebook's Mark Z. did — that  e-mail is too slow.  Sure, you'll find a lot of people that agree with that.  But you can also say that it's fast enough and you'll find a lot of users who agree with that.  Simply stated, finding the next killer app in messaging isn't easy.  Facebook says it had a huge team on their messaging service — 15 people for 15 months. It probably will take more than that (last time we checked Microsoft had over a thousand).  Facebook has built in some nice features — smart mail box to triage incoming messages and also organize threads and multiple delivery options (e-mail, Instant Messaging, SMS, whatever...) — most of which have been around in various forms.  And of course a lot of users will sign up for it — but they could have built a JPOES product (Just a Plain Old e-mail System) which would end up with lots of users. The most interesting thing is that they are giving each Facebook user an @Facebook.com e-mail address.  That's needed, of course, because despite being a modern mail system they really would like to interconnect with the rest of the world.  This may come out to be a good idea or, in fact, it may end up opening up Facebook users to the outside world — who knows what clever things developers will do.  Surely you can make pronouncements about having saved the world from traditional e-mail but what actually happens might turn out to be more complex than anyone anticipated.

They Eat Their Young

Microsoft has a reputation for being a developer's best friend as the Microsoft platforms are successful in larger part due to the support of their eco-system. There are many examples - SharePoint with several hundred partners and Microsoft's relationship with Citrix. VMware on the other hand doesn't have the same magic touch developing its ecosystem, in large part due to its product line expansion strategy. Probably the best way to think about being a VMware partner is that VMware will develop 80% of the functionality itself and take down 80% of the market opportunities unfortunately leaving partners with a much smaller and technically challenging market slice. At VMWorld there were new examples of this as VMware introduced vShield and in doing so changed the bar for companies trying to add security functionality to the VMware platform - setting the stage for VMware to roll up the bulk of opportunities in this space. And two announced acquisitions, single sign on vendor TriCipher and its $100M acquisition of Integrien for visibility must have taken the wind out of the sails of a dozen companies providing the similar capabilities. VMware is on top of its game so if its ecosystem rules are 80/20 then that's the way the games going to be played this time around.

IRG's Azure Appliance diagnostic

In August we will be introducing a new offering — the IRG Azure Diagnostic.  In July Microsoft announced the Azure Appliance which we think both leapfrogs the competition and will prove to be an important strategic thrust for the company.  We've always believed it's important for infrastructure companies to pay close attention to what Microsoft does because of the broad influence that Microsoft has on computing, especially in the Enterprise market.  Because of the impact of Azure we're doing more than just research reports.  The IRG Azure Diagnostic is an affordable engagement where we both educate your team about Azure and the industry implications as we see them, but additionally we do an initial assessment of what Azure means to your business and what you should do about it. Want more info?  jkatsaros@irg-intl.com

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.

TechEd, Velocity 2010 and Structure 2010

TechEd is always good — Microsoft pays a lot of attention to getting the right topics and the best speakers. And the STB Analyst Summit is a great way to chat with the management team, including a "fire side chat" with Bob Muglia. This was followed relatively quickly with O'Reilly's Velocity 2010 meeting and GigOm's Structure 2010. Clouds and the analysis of large data sets was a topic common to all three with some surprising twists (BI was a big part of TechEd as they merged their previously standalone BI Conference in). It's becoming clear that when it comes to computer clouds it's like fluffy clouds — when you stare at them different people see different things.

iPad (the XPARC Alto redux?)

There is a delicious irony to the iPad (probably many). If you remember the history of the Mac, in a sense it begins when Steve Jobs visits Xerox PARC and seeing the Alto (the $100K "personal" computer that PARC built to understand what could be done in the future) and then Jobs "stealing" the windows and mouse design for the Apple Lisa, and soon thereafter the MAC. The irony is that the Alto system principals — Butler Lampson and Chuck Thacker — both ended up at Microsoft Research and were the creators of the Windows Tablet prototype that Microsoft made into a marginally successful product line. Now of course the iPad is going to cause serious issues for Windows and PC's. I don't think that anyone will accuse Jobs of stealing the tablet design this time!

Is that a chip on your shoulder?

VMware spent a disproportionate amount of time in the Analyst meeting "explaining Microsoft's competitive playbook" (the Karl Rove perspective on industry competition) apparently in hopes of explaining how MS was lying and cheating and distorting the facts about virtualization. Given that a younger and brasher VMware in the not so distant past redefined vendor arrogance on more than one occasion, this seemed to fall in the category of "the pot calling the kettle black," and for us probably had the undesired outcome of demonstrating how much VMware really fears the Evil Empire from up north. Or are we unduly cynical for assuming that all vendors spin the facts to suit their pleasure? Isn't that the definition of "marketing?" Many of VMware's top execs spent significant successful portions of their careers at Microsoft and seem to be overly conscious of the Microsoft threat to the point where they may be caring more about Microsoft's reactions to what VMware does than to how customers may react. We had to sit through rather long diatribes about the "Microsoft Playbook" and what to expect from Redmond. There's an old adage in the advertising business that says you're winning the battle if you can get your competition reacting to what you do rather than paying attention to what customers want. Without even firing a shot across the bow, Microsoft is commanding more of their mindshare than it may be due. Let's hope that's not the case here.

Keeping It Simple

Even just ten years ago you'd have thought it crazy that we'd be talking about 12 cents an hour for a server. Last week Microsoft announced its pricing model for Windows Azure making it clear that the company will play a very aggressive role to quickly develop usage once its cloud services become available. The table below compares Microsoft Azure's pricing to Amazon's cloud computing prices. Microsoft's pricing is simpler but Amazon's pricing has two years of experience behind it which account for it being more nuanced. The two charts below compare Microsoft and Amazon pricing for data transfer out of their Clouds. Microsoft is clearly being competitive in the small to medium categories which probably is illustrative of their overall strategy.