Peter Christy

Mile-High Mark

Citrix held its Analyst meeting in Denver recently. It's always a delight to catch up with the Citrix executive team. The big news was the intent to integrate Citrix's "VDI" offering within the broader application delivery offering (XenApp, previously known as Presentation Server). Citrix has done very well with its various bundling strategies over the last few years building off of Citrix's market leadership and market success, and I would bet this will continue the trend. With this move a Citrix XenApp customer can choose to use any of the technologies, including VDI, within the basic seat license. As long as VDI solutions remain a relatively small part of the overall application delivery market (our assumption) this is a smart way of keeping Citrix customers in the fold by making VDI essentially "free."

Autonomic Computing (Redoux)

In the last issue I wrote about how VMware's acquisition of SpringSource gives them a way to interact directly with application developers, and how valuable a framework may turn out to be in Cloud and Utility computing as a way of solving important infrastructure optimization issues (like edge acceleration) without requiring the application developer to understand all the nasty bits. VMware has something even more important in mind I think: what their Analyst Day talks hinted at was that they thought that applications built on the framework could be instrumented and automatically managed as a result. If you remember, IBM tried "Autonomic" computing some time ago, and couldn't really make it work. It seems pretty clear that an executable binary is much too cryptic to make sense of at run time for broader management purposes. Things improve with virtualization because it's much easier to see what the application is doing (if not to understand it). With a framework, things improve still more because you see more of the program structure at the framework abstraction layer, and as VMware notes, you can instrument the framework to give you more useful information about what the program is doing. Are these changes enough to make something like autonomic computing really work? Remember, the goal is a smart data center than automatically dynamically adjusts to accommodate evolving load, hardware and software failure, issues of scaling, ... Our friends at Microsoft would argue I think that this isn't going to work for VMware. Microsoft thinks that by the time you get an executable program all the interesting information about the program (the design intent, how it performs and scales, how you can tell it's in trouble) has been removed or encrypted beyond all hope. Microsoft's approach (Dynamic IT) is based on the idea of capturing and preserving key design and operational data in a declarative form, and using all this in the data center to achieve the goal. Virtualization changes the game enough to make VMware's direction worth looking into, but if you asked me now, I wouldn't bet the rent money they can make it work anymore than IBM could.

Service in the Cloud

On the heels of VMworld, SalesForce held a delightfully upscale introduction luncheon to announce the Service Cloud 2. Sales force automation — SalesForce's primary offering — is a key pillar of CRM, but CRM is a much broader topic and customer service is another important pillar. To date, the customer service part has been typically done with in-house systems that organize problem/solution knowledge bases that are then used by call center agents. Enabling customer self-service is a less-expensive solution, and done well a fundamentally better solution, especially when augmented by community support where users help each other. But of course customer self service and community support are outward facing applications with scaling and distribution aspects that make them perfect Cloud candidates. About a year ago, SF acquired InStranet, a knowledgebase technology company (a key underpinning of all forms of customer service) and they have been integrating and extending that capability since. The SF Service offering is still only a small part of SF revenues but is growing much more rapidly that the core SFA business. This most recent announcement incorporated innovative Facebook and Twitter integration. For example, a vendor can set up a Facebook page and using the SF system, service questions can be posted entirely within Facebook, but fully integrated with the other service delivery channels. It's going to be interesting to watch how this catches on. It's fair to say that SF is way ahead of the traditional application vendors in offering a SaaS/Cloud service. For companies wanting to be on the innovative side of support (self-service and community-service early adopters) but not wanting to operate it themselves, the SF solution is pretty compelling.

Cisco and Video Heat Hp

It was only last spring when Cisco proudly acquired Pure Digital, the makers of the Flip cameras, for north of $500M. The reasoning made sense: end-to-end video (including consumer) was an important strategic pillar for Cisco, and Pure had done a great job of producing easy to use Flash memory cameras and grabbed a reasonably chunk of the camcorder business. It looked like a smart product and brand move. And now, just a few months later, Cisco looks up and finds that no one less than Apple is a direct competitor (well, sort of). Apple has added video camera capability to the iPod Nano, one would guess as a means of keeping the Nano ASP up while the cost of Flash continues to slide. But whatever "Flip" was becoming as a consumer brand, it will never be "Apple" (at $182B, the AAPL market cap is 30% larger than CSCO). And however cool and easy to use the Flip camera was (it is), I'm personally willing to bet that Apple cameras will be easier and cooler, and Apple clearly has better client software to integrate with on a PC or Mac. I guess we'll see how good chops Cisco has as a consumer product company right soon! Just to keep things interesting Cisco wants to acquire Tandberg (which used to be an awesome consumer brand!) to get and integrate their broader video conferencing line. We certainly can't accuse Chambers of sitting still!

"Coring out Cisco"

I recently had a chance to catch up with Dave Roberts, CMO of Vyatta, an old friend from our previous lives. Vyatta was founded in 2005 with the mission of driving open source solutions into networking, and the goal of "coring out" value from Cisco as RedHat Linux successfully did from Sun Solaris. On the one hand, Vyatta's offering isn't particularly innovative as networking functionality (they've largely packaged and integrated other open source networking bits); on the other hand, networking software running on commodity hardware has always been viewed as a real competitive threat by Cisco. Open source works best when the offering is well defined (Linux as a version of UNIX for example) and what could be better defined than networking. Vyatta isn't the first or only vendor to produce a networking software stack, but it is one of the first to try and fully leverage an open source business model. The Vyatta code base is available for free download and use (its open source). Although you can largely get the same functions from the separate chunks that Vyatta has build on, the Vyatta "stack" is all integrated and works well together, so that saves a lot of time. Because Vyatta is free and in often works adequately on older servers that are already paid for, a lot of companies, big and small, have played with the software. For the high value use cases that almost work, Vyatta will often hear from the user either to understand when the missing functions might be available or to inquire about support (Dave tells the story of a very large enterprise CIO realizing how many "free" systems he had running and wanting very much to understand how much a site support license would cost). So the free downloads substitute for traditional and much more expensive demand creation, the users self-select to identify the best fit use cases and to help identify what should be developed next. Dave reports rapid growth over the last 1-2 years, and expects that to continue. Vyatta is still miniscule and not a business threat to Cisco, but the trends are interesting for sure.