Author: Rene Buest

Rene Buest is Gartner Analyst covering Infrastructure Services & Digital Operations. Prior to that he was Director of Technology Research at Arago, Senior Analyst and Cloud Practice Lead at Crisp Research, Principal Analyst at New Age Disruption and member of the worldwide Gigaom Research Analyst Network. Rene is considered as top cloud computing analyst in Germany and one of the worldwide top analysts in this area. In addition, he is one of the world’s top cloud computing influencers and belongs to the top 100 cloud computing experts on Twitter and Google+. Since the mid-90s he is focused on the strategic use of information technology in businesses and the IT impact on our society as well as disruptive technologies.

Rene Buest is the author of numerous professional technology articles. He regularly writes for well-known IT publications like Computerwoche, CIO Magazin, LANline as well as Silicon.de and is cited in German and international media – including New York Times, Forbes Magazin, Handelsblatt, Frankfurter Allgemeine Zeitung, Wirtschaftswoche, Computerwoche, CIO, Manager Magazin and Harvard Business Manager. Furthermore Rene Buest is speaker and participant of experts rounds. He is founder of CloudUser.de and writes about cloud computing, IT infrastructure, technologies, management and strategies. He holds a diploma in computer engineering from the Hochschule Bremen (Dipl.-Informatiker (FH)) as well as a M.Sc. in IT-Management and Information Systems from the FHDW Paderborn.

Categories
Analyst Cast Cloud Computing

Shared-Responsibility in the Public Cloud (Webcast Recording in German)

Public cloud and responsibility is a difficult topic. However, most of the companies still have to understand that self-responsibility is a central point using the public cloud. The provider does his homework up to a certain level and delivers services and tools the customer has to use to do his homework. Thus, the complexity mostly sticks in the architecture of the infrastructure respectively in the application running on the infrastructure. However, a customer cannot drop the full responsibility into the hands of the provider.

“Shared-Responsibility” is key in the public cloud. How this works and how companies have to deal with this in terms of operation and security I discussed together with Amazon Web Services German country manager Martin Geier and Zalando STUPS Hacker Henning Jacobs during the Computerwoche live webcast “Security First in the Public Cloud“.

The recording of the webcast is now online and can be watched for free under “Webcast mit Zalando und AWS: Security First in der Public Cloud” in German.


Picture source & credits: Amazon Web Services Germany

Categories
Cloud Computing

Cloud Market Update Germany 2015: Cloudy with a Chance of Digital Enterprises

The hard numbers speak for themselves. Those who still assume that the cloud is just a playground for developers, must learn a lesson from the $1.8bn revenue ($391m net profit) of Amazon Web Services. Such numbers cannot be accomplished with a couple of small workloads but are rather a clear indication of increased relevance for corporate customers. The strengths that AWS has proven on the international stage continuously increase in Germany and have a positive impact on the German cloud market.

„First they ignore you, then they laugh at you, then they fight you, then you win.“ The evergreen quote from Mahatma Gandhi is also relevant to the cloud story. In the beginning, the cloud was laughingly labeled as „the hype“; then followed the battle with partially erroneous arguments, among which the ever-recurring topics of Data Protection & Data Security, well covered by the media and unfairly used interchangeably. At the end of 2014, however, the cloud in Germany had rapidly spread out and this shift continues in 2015.

An analogy to the cloud’s growth can be made with the triumphant spread of WLAN at the enterprise and can provide evidence as to why the cloud finally enforces itself. Earlier, CIOs were being ridiculed for daring to introduce WLAN infrastructure and open their businesses to the outside world. Psychology and technological developments have made it possible to dismiss further claims that WLAN is unsecure.

The Cloud is the foundation for Digital Transformation

For close to 75 percent of the German enterprises, cloud computing occupies a significant place on the IT agenda. The cloud is either an active component of the ongoing IT operations and deployed as part of projects and workloads, or being used for planning and implementation purposes. We see a clear trend toward hybrid cloud solutions. More than half of the survey respondents (57 percent) rely on this operational cloud model. Moreover, in the context of multi-cloud strategy, managed private cloud environments (57 percent) gain increasing importance.

The hybrid cloud stays in focus, especially because enterprises are intensely occupied with the topic of „Data Gravity“. This comes down to data immobility. Either the data volume is too large to store in the cloud, or legal frameworks necessitate the keeping of specific data on premise. A hybrid cloud architecture is in a good position to address the challenges of „Data Gravity“ and offer unique solutions. In this case, data mobility is no longer necessary. Instead, the data are kept on private storage systems (for example, in the managed private cloud) and the public cloud services (compute power, applications, etc.) then access the data for processing. In the course of processing via the use of public cloud services, the data have indeed been modified and, as the case may be, new data have been generated. However, the data never leave the storage system in the direction of the public cloud.

Only around 25 percent of the German decision makers do not find any place for the cloud on their IT agenda. It is a matter of wait and see how long this stays the case. The pressure on the different departments for more flexibility and a shorter time-to-market for new applications is increasingly stronger. At the end, it all boils down to the CIOs not being able to move forward without using cloud services, in whatever form they may be. And who would let oneself to be reproached for negligently playing the wrong note with the digital transformation opportunity?

Among those businesses that actively dedicate themselves to the digital transformation, and accordingly build a Digital Infrastructure Fabric (DIF), the cloud platforms and infrastructure are a central part of IT strategy in supporting the digital efforts. This is indicated by the open presence of Infrastructure-as-a-Service and Platform-as-a-Service on the agenda of respectively 63 percent and 70 percent of CIOs, and their use as a foundation for the development and operations of new applications.

Furthermore, the Internet of Things (IoT) will spur forward the German cloud market and quickly become a decisive factor for the future competitive advantage of businesses who must quickly get busy and grapple with the necessary technologies. Public cloud environments – especially infrastructure (IaaS) and platforms (PaaS) – offer the ideal prerequisites for back-end support of IoT services and end devices. The critical attributes for this aim have already been placed in the cradles of leading public cloud providers, to be further developed into an IoT backend. One can then rightfully adhere to the view that cloud growth in Germany and the advancement of the Internet of Things are closely interrelated.

Provider Overview

An overview of the behavior of the most important public cloud providers is presented in the current research note: „Public Cloud Providers in Germany: Frankfurt is the Stronghold of Cloud Data Centers“.

Halfway 2015: Six Cloud Trends in Germany are already confirmed

In the beginning of the year, Crisp Research outlined ten trends in the cloud computing market in Germany. Six of them are already a reality.

  • The Public Cloud arrived in Germany
    The public cloud model is gaining massive ground in Germany. At the AWS Summit in Berlin, strong and comprehensive projects from companies like Audi, Zalando and Zanox spoke the same distinct language. The public cloud enjoys towering popularity as IT users use it to bring agility and flexibility into application management. Then again, by this time almost all relevant public cloud providers boast data centers on German grounds.
  • Consultants and System Integrators benefit from the cloud boom
    The complexity associated with public cloud infrastructure as well as the missing cloud expertise and development skills in the German enterprise brings cloud system integrators into the game. This has been confirmed through conversations with decision makers from the respective companies like Direkt Gruppe, TecRacer or Beck et. al. The somewhat EUR 2.9bn market is divided by the system integrators and consultants who are truly committed to the cloud topic and make a significant contribution to the digital transformation in Germany.
  • Multi Cloud is now a reality
    The use of cross-functioning cloud deployments has experienced strong growth. As part of cloud strategy, the evaluation of and operations from at least two cloud providers are considered. One reason for this is risk management. Another, main reason is that not every provider is capable of handling all applications – e.g. bare metal or legacy IT. At present, the customer administers workloads individually on each cloud provider’s platform. In the mid-term, the management will make a shift to a more centralized platform that simplifies deployment.
  • Frankfurt ensures cloud connectivity and performance
    Cloud connectivity is of paramount importance for both the user and the provider, as technical challenges (low latency, high availability and throughput) must be tackled to ensure high-performing, stable and secure application operations and services. Frankfurt is the core of the German and European cloud markets. A look into the presently leading public cloud providers in the German market reveals that already half of them have selected Frankfurt as a data center location, affirming the relevance of cloud connectivity and performance. Amazon Web Services, ProfitBricks, SoftLayer and VMware are already present in Frankfurt, to be followed by Salesforce in August.
  • The Internet of Things drives Mobile Backend Development
    In the course of digitalization, the development of mobile apps in the context of the Internet of Things mounts up. The data gathered from end devices will be transferred to back-end infrastructure, where back-end applications will undertake the analysis and linkage with other data, to prepare for the visualization of a front end. Mobile backends become IoT Backends and an important part of the IoT value chain. What is now known in the market as Fitness Wearables, which many people use to self-measure certain indicators, will spread to other industries. A lot of movement has been observed in the Smart Home space. Providers like Tado (intelligent heating and air conditioning management) or Netatmo (weather station) use backend applications based on cloud infrastructure that takes care of integrated connections of end devices and secure control.
  • More Services – Pricing rises
    Price reductions belong to the past. Now the price barometer points to the other direction. First, Microsoft will increase prices for Azure in the European region from August 1st. The focus is deemed to be increasingly more on innovation. Amazon AWS released 220 new services and functions this year, Microsoft Azure about 110, respectively. ProfitBricks also recognized that pure infrastructure has already become a commodity and offers very little potential for innovation. Instead, the customers require enablement of cloud infrastructure, on top of which to build their own products and services. ProfitBricks presented DevOps Central, a portal to inspire developers to use the infrastructure environment. Furthermore, proprietary SDKs for Java and Go were introduced, to aid the developer to manage the ProfitBricks infrastructure components via programmable REST APIs.

Marketing Gimmick: „Cloud Made in Germany“

What is „The German Cloud“ doing? Nothing! The marketing about „The German Cloud“ really needs to stop. The German customers have never asked for a German cloud. This naming is the creative idea of a couple of German marketing managers.

Instead of applauding „The German Cloud“, German providers should rather use their strengths to develop and bring to market innovative and appealing cloud services. The market leadership and the clear innovative advantage of the US providers versus the German ones present a grave problem. At the end, the availability and the competitive advantage of the German cloud services is really shrinking. Many enterprises are snatching the offerings of the cloud providers from the US.

The fact is that a large part of German CIOs ask for German data centers, in order to guarantee the level of data protection and fulfil the legal requirements. Certainly, enterprises should not neglect the significance of global scalability, in order to expand to other geographies. Having a provider with a global footprint is imperative. Here is a reason why the IT and cloud strategies must be aligned from the beginning.

Bottom Line: Digitalization drives Cloud Computing

The German businesses find themselves in the middle of their cloud transformation processes. They lay out a multi-cloud strategy step by step, based on existing infrastructure, platforms and services from different providers. In the course, CIOs assess technologies and providers for the creation of their Digital Infrastructure Fabric (DIF), which will further play out the technological implementation of the individual digital strategy and will put the foundation of novel business models and agile business processes.

The cloud has acquired leading status as a vehicle for the digital transformation. Only by means of deploying dynamic and globally scalable platforms and infrastructure can the IT strategy adequately address the evolving market conditions and support the business strategy in an agile way from a technical perspective.

Categories
Cloud Computing

Public Cloud Providers in Germany: Frankfurt is the Stronghold of Cloud Data Centers

In the beginning, US public cloud players didn’t care much about Germany. However, in the meantime more and more providers are bustling on the German market. Above all, Frankfurt emerged as the Mecca of cloud data centers.

The top 5 reasons of Germany’s attractiveness are:

  • a stable political situation.
  • a central location in Europe.
  • high data privacy laws.
  • a geographical stable situation.
  • a high economic performance (fourth largest national economy in the world and number one in Europe).

Frankfurt is the Cloud Hub in Germany

Data centers are experiencing their heyday. The “logistic centers of the future” are coming to the fore as never before and provide the digital backbone of the digital transformation. With good reason. In the course of the last decade more and more data and applications have been moved to IT infrastructure of global distributed data centers. The significance of data centers as well as IT infrastructure as a logistic data vehicle is no accident. Also German companies have recognized this. More than two-thirds (68 percent) see data centers as the most important building block of their digital transformation.

In the recent 20 years a cluster of infrastructure providers has been established in Frankfurt that helps companies of the digital economy to position their products and services in the market. These providers have shaped Frankfurt and its economy and deliver integration services for IT and networks as well as data center services. More and more public cloud providers have recognized that they have to be on site in the local markets and thus near their customers – despite the inherently global character of a public cloud infrastructure. This is an important insight. No provider who wants to make serious business in Germany can relinquish a local data center location.

The research paper “The significance of Frankfurt as a location for Cloud Connectivity” is dealing with the question, why Frankfurt is the preferred location for cloud data centers.

Public Cloud Providers and their Data Centers in Germany

A view on the most important public cloud providers for the German and European market shows that already half of them has decided for Frankfurt as their preferred data center location. That a German data center pays off is proved by Amazon Web Services (AWS). According to the German country manager Martin Geier, the cloud region in Frankfurt (consisting of two data centers), AWS has opened in October 2014, is the fastest growing international AWS region ever. In addition, the AWS region has helped to quicken the German cloud market. On the one hand, AWS customers are welcoming the opportunity to physically store their data in their own country. On the other hand, AWS efforts also help local providers like ProfitBricks who indirectly profit from constantly getting new customers.

  • Despite being a vigorous follower of Amazon Web Services, Microsoft has yet not managed to open a datacenter in Germany. This is hard to explain, considering that Microsoft has had its own legal entity in the German market for a long time and should be well familiar with the concerns and requirements of the German enterprise customer. Microsoft’s efforts in the cloud are considerable and display a clear trajectory. Certainly, Microsoft would be able to finally convince its German customers and meet their requirements only through establishing a local datacenter. Rumors are spreading that Microsoft will open one in Q2 2016. One possible strategy could be to partner up with a large local partner, similar to the joint efforts of Salesforce and T-Systems. At the moment, Microsoft relies on technology partnerships (Cloud OS Partner Networks) with local managed service providers, who build their own Azure-based cloud environments based on the Azure Pack.
  • At CeBIT, VMware announced officially the General Availability (GA) of its German datacenter. The outlook for the technology provider is generally good. On the one hand, a large part of on-premise infrastructure is already virtualized via VMware technologies. On the other hand, businesses are searching for ways to migrate their existing workloads (applications, systems) to the cloud without facing too much hassle and making many modifications. Indeed, even when VMware’s own public cloud offering focuses on standardized workloads, it still competes directly with a range of its partners (cloud hosting providers, managed service providers), who have built their offerings using VMware technologies as a foundation.
  • The American provider Digital Ocean has had its own datacenter in Germany since April 2015. Digital Ocean is a niche provider to keep a close watch on. It targets mostly developers and not so much enterprise customers. Moreover, if Digital Ocean seriously wants to stand in the ring against Amazon Web Services, then the company must offer more than boring SSD cloud servers and a couple of applications to its customers.
  • Rackspace is not yet represented by a local datacenter in the German market; yet its business is expanding into the DACH market, where Germany is of strategic importance. A local datacenter would certainly underline the commitment. Rackspace could have winning cards as a managed cloud service provider, because the majority of German businesses are already busy with managed cloud services.
  • On account of the partnership with T-Systems, Salesforce will likely establish a seat in Frankfurt. The datacenter’s opening is announced for August 2015.
  • At present, one should not expect Google to open a datacenter in Germany. This speaks for Google’s attitude to determine the rules of the game and concentrate on itself, rather than on the needs, challenges and concerns of its customers. This is reflected widely through the Google Cloud Platform. The requirements of the corporate customers have to this date not been considered by Google.

Moreover, it is worth noting that the lower costs and the innovation capabilities of public cloud providers put a continuously rising pressure on managed service providers with own datacenters. The providers are now forced to change their strategies and become managed service providers who operate infrastructure for public cloud environments. This means that the providers manage their customers’ applications and systems from cloud infrastructure such as that of Amazon’s AWS. Only specific, mission-critical workloads remain in the providers’ own datacenters.

Frankfurt’s leads in density of datacenters and interconnected Internet exchange points not only in Germany but also Europe-wide. The continuous motion of data and applications on the infrastructure of external providers has made Frankfurt the citadel of cloud computing in Europe. Strategic investments from colocation providers such as Equinix and Interxion have emphasized the significance of the location.

As most of the relevant public cloud providers have already found their own place in Frankfurt, Crisp Research envisions an important trend for the next couple of years – an increasing number of international providers will build their public cloud platforms in Frankfurt and will respectively continue to expand and develop them there.

Categories
Open Source Strategy

CIOs can generate a sustainable business value with OpenStack! Here’s how it works.

OpenStack is on everyone’s lips and is slowly working it’s way forward into the IT infrastructure of German companies. 58 percent of German CIOs see in OpenStack a true alternative to commercial cloud management solutions. However, IT decision makers should look closely what they are holding in their hands. OpenStack is basically just an infrastructure management solution and accomplishes no direct value to the business success. However, this is exactly what CIOs have to deal with in order to position themselves as a business enabler. This raises the question how OpenStack is able to create a significant added value, stepping out of the shade of a simple open source cloud management software.

CIOs have to state the fundamental question, how OpenStack can provide a strategic advantage. This is only the case if they use OpenStack different from their competition and thus not only restrict oneself to operational excellence. It is rather about to understand the OpenStack technology as part of their IT strategy using it to create a real value for the company.

Playground: Enablement Platform for Developers

CIOs who want to achieve a business value with OpenStack need to see more potential in OpenStack than just a pure management solution for their cloud infrastructure. In this case it is much more than just cost savings and running an IT infrastructure. CIOs have to understand OpenStack as an enablement platform for their developers and use the open source solution exactly in this way. CIOs, who only want to focus on operational excellence, can use one of the several standard OpenStack distributions. However, these ones should consider, that they are just one of many. For those, who see a strategic vehicle in OpenStack, a distribution is a good foundation to extend OpenStack and expand it to an enablement platform.

OpenStack as enablement platform means that developers are provided with much more than just compute (virtual machines), storage or databases. It is about providing higher-value services, which can be found in the portfolios of Amazon Web Services and Microsoft Azure. This is about microservices that support the application development. These are ready building blocks whose functionalities don’t have to be developed again. Instead they can be used directly as a “brick” within the own source code. The OpenStack community has recognized the importance and slowly tries to take parts of the AWS respectively Azure service portfolio over to OpenStack. First services are Sahara (Elastic Map Reduce) and Zaqar (Multiple Tenant Cloud Messaging). Of course, this is by far not enough and further microservices are needed to make OpenStack to a powerful enablement platform.

However, one thing shouldn’t be underestimated for this scenario: the significant investments that are necessary. Building a massive scalable and globally available cloud infrastructure respectively enablement platform like the ones of Amazon Web Services or Microsoft Azure is complex as well as costly. However, this must not prevent CIOs from running an own OpenStack based platform. For this purpose e.g. partnerships with hosting providers suit to run OpenStack in different deployment models. The German research paper “Managing OpenStack: Heimwerker vs. Smarte Cloudsourcer” describes what kinds of variants are suitable.

Despite the high complexity of OpenStack it is possible for CIOs to make use of its openness and flexibility to build custom solutions based on the various sub-projects.

Innovation: Leave the Community

The common work within a community is important to push a project like OpenStack successfully forward. In addition, all involved parties benefit from the ideas other community members. However, the big disadvantage is that one member is just as good as the community itself. The community concept neither works to diversify towards the competition. In the end the focus is again completely on operational excellence. A technological or strategic advantage cannot be achieved.

The cloud market shows that solo efforts are part of a concept for success. Providers like Amazon Web Services (AWS), Microsoft Azure, ProfitBricks in Germany or CloudSigma in Switzerland have built individual infrastructure environments. This strategy has helped AWS to achieve a massive advantage in technology within the cloud market.

Another paragon in the open source space is Canonical. The Linux distributor is well-known for using the Linux open source code but only giving back a little (e.g. patches). It is the same behavior for the OpenStack project, proven by numbers (see http://stackalytics.com). Idealists my have a problem to understand Mark Shuttleworth’s (Founder of Canonical) attitude. However, in the end it is about the business and thus to operate in the black.

OpenStack is perfect for CIOs to serve as a foundation for their cloud infrastructure. For this purpose, standard OpenStack services like compute, storage or identity management can be used. However, in the end it is about one thing: individuality! This means that a CIO should say good-bye to the community concept in order to focus on innovation. The strategy is about to look what the OpenStack community has to offer, adopt the necessary services and develop individual enablement services and solutions on top of it. The use of standard OpenStack is not sufficient to differentiate from the competition neither to create a serious value for the company.

Business Value: Applications and Services support new Business Models

The Internet of Things (IoT) is the next megatrend rolling towards companies forcing them to finally start with their individual digital transformation. OpenStack is a powerful tool and a global standard CIOs can use to support this individuality. However, OpenStack is just a means to an end and only offers the basic functionality so far. But, based on the open source approach OpenStack can be completely customized for the own necessities and thus is the perfect foundation for individual backend solutions to support mobile and IoT applications.

For this purpose, CIOs should stand back from standard OpenStack, use a distribution as a foundation and extend it with individual functionalities. This means that they have to get used to OpenStack’s complexity. However, it is exactly this technological excellence that will pay off over time to differentiate from the competition in order to obtain a technical advantage and thus create an added value.

Categories
Cloud Computing

AWS Summit Berlin 2015: Germany embraces the Public Cloud

The spell is apparently broken. The public cloud model is massively gaining ground in Germany. Without using the public cloud most of the German companies will struggle to play a significant role in the future market of the Internet of Things (IoT) and kicking off their digital transformation. However, it looks like that the topic has arrived at some German executive floors. The AWS Summit Berlin 2015 was a good indicator for this.

It is October 7th 2010, Amazon CTO Werner Vogels welcomes 150 developers at “Kalkscheune” in Berlin. Family environment, no partners, no booth, some snacks and drinks. It is the first AWS cloud computing event in Germany and quasi the very first AWS Summit in Germany ever. Speakers from Moviepilot, Cellular, Plinga and Schnee von Morgen are talking about their experiences with Amazon Web Services.

On June 30th 2015, almost five years later, Werner Vogels is again on stage, again in Berlin, this time at the “CityCube”, in front of over 2,000 attendees, in front of developers and decision makers. Big booths, conference food, 32 partners and 45 sessions distributed over 9 tracks. All this shows the enormous growth of the AWS Summit Berlin and reflects the interest of German IT users in the public cloud and the Amazon Web Services (AWS).

Germany has become one of the growth engines for AWS. According to the German country manager Martin Geier, the cloud region in Frankfurt (consisting of two data centers), AWS has opened in October 2014, is the fastest growing international AWS region ever!

Innovation: 1.170 new Functions and Services in 7 Years

The growth in the German market stands symbolic for AWS global growth. According to AWS, already over 1 million active customers of different sizes and from various industries are using the public cloud infrastructure. This includes 3,600 customers from the education sector and over 11,200 non-profit organizations. In order to expand the customer base in the German startup scene a partnership with Rocket Internet was established. Rocket has committed recommending all prospective startups to run their infrastructure and applications at AWS. In addition, existing startups are advised to think about moving to AWS. AWS next top target customer group is the public sector (schools and public authorities). For this purpose, the Summit hosted a public sector track for the first time. This is an important strategic step for AWS. If AWS is able to gain a foothold into one German government authority this would be a precedent that could encourage other public customer to follow.

The growth on the customer side can also be seen on the technical level. The incoming and outgoing data transfer of Amazon S3 has been increased by 102 percent in the last year. The usage of Amazon EC2 instances increased by 93 percent.

In addition, AWS operates 11 cloud regions consisting of 30 Availability Zones (AZ). One region consists at least of two AZs, one AZ consists of one or several data centers. Furthermore, 53 edge locations exist to deliver data to customers in single local markets quicker. The 12th cloud region opens in India in 2016.

Besides the advantage to be the first infrastructure-as-a-service (IaaS) provider on the market, especially two factors lead to the enormous head start: the service portfolio and the speed of innovation.

  1. Instead of just providing pure infrastructure, AWS has a huge portfolio of microservices that is helping customers to use the infrastructure gainful by developing web applications and backend solutions on top of it. At the same time the infrastructure platform serves as a technical enabler for new business models.
  2. AWS is more innovative than any other cloud provider. In the last seven years 1,170 new functions and services have been released, 516 of them only in 2014. AWS has more functionality than any other infrastructure provider.

AWS stands for the public cloud. The provider and CTO Werner Vogels again made this very clear. The private cloud has no space in the world of AWS. The hybrid cloud is just considered as the journey but not the ultimate destination. Therefore, customers are only provided with elementary solutions and services (Amazon VPC, AWS Direct Connect) for hybrid cloud scenarios and it is likely to remain like that. Customers who got used to it are Netflix, Kempinski Hotels, GPT, University of Notre Dame, Emdeon, Intuit, Infor, Splunk, Tibco and Informatica. These companies are “All-in” with the public cloud and AWS.

Corporate Customers discover the Public Cloud

Companies of all size are able to benefit from using the public cloud. Startups have the advantage to start with a greenfield approach und doesn’t drag any legacy along. They can grow slowly without making heavy investments in IT resources in the very beginning. Existing companies need one particular thing in this day and age: speed, in order to keep pace with the fast changing market conditions. An idea is just the beginning. However, a fast go-to-market mostly fails due to the technical execution because of not existing IT resources like modern tools and services that are significantly helping for the development.

AWS counts the who is who of the startup scene as its customers. Now it is about to navigate more corporate customers to the infrastructure. Unilever, Qantas, Dole, Netflix, Norvatis or Nasdaq are already big international customers on the list. In Germany after Talanx and Kärcher finally a heavyweight was presented at the AWS Summit 2015, Audi.

Audi

Audi decided for AWS in the context of its new mobility program “Audi on Demand” to provide customers with individual services. The reasons for this are requirements for a frictionless 24/7 operations as well as the capabilities for global scale in order to reach out to global customers quick and to store data in the local markets. Therefore, Audi is using several AWS services and functions such as Virtual Private Cloud, a multi availability concept and Amazon EC2. One decisive detail: Audi has transformed the organizational structure from a hierarchy model to a fully meshed model and built everything around IT.

Zalando

Zalando said good-bye to its own data center and moved the IT infrastructure of its ecommerce shops into the AWS cloud. This was for strategic reasons to promote the innovation and creativity of the company. For this purpose, Zalando is empowering its employees acting autonomously to provide the necessary IT infrastructure quicker than previously. In doing so, Zalando is able to deliver its customers new functions quicker. However, Zalando’s example shows how important a cultural change is if innovation should be promoted supported by the cloud. Therefore the company is orientating on something it is calling “Radical Agility”. This is about e.g. the organization and architecture that is required to give own teams the capabilities for more freedom to learn and in this context allowing them to make mistakes. In the end, this is the only way to understand how to develop massive complex applications.

Zanox

In a personal briefing Sascha Möllering, lead engineer at Zanox AG, talked about his experiences of using the AWS cloud. Möllering is significantly responsible building the virtual IT infrastructure and the development of the backend service that is used by the Zanox affiliate marketing network. Zanox operates an own data center infrastructure in Berlin to serve the European market. However, the number of customers in Brazil is constantly increasing. Zanox depends on a global scale to provide the customers in this market with a good performance. The challenge is the high latency to deliver data as fast as possible. This is the main reason Zanox decided for AWS. The cloud region “Sao Paulo” offers Zanox three availability zones and four edge locations in Brazil. For this purpose, Möllering developed a native AWS application but only focus on using core services in order trying to avoid an AWS service lock-in. Because Zanox doesn’t want to relinquish the own data center infrastructure in Berlin and connects AWS in a hybrid model. In addition, Möllering plans in the case of an AWS error and has considered a multi region scenario respectively a multi cloud scenario. Therefore he has developed an own module that is implementing the APIs of Amazon Kinesis, Microsoft Azure Service Bus as well as Apache Kafka to make sure not losing the incoming data stream and thus not losing data on no account.

Public Cloud has arrived in Germany

The AWS Summit in Berlin was a good indicator that more and more German companies are discovering the public cloud. Conversations with customers, partners and system integrators show a good progress. Audi, one of the leading German car manufacturers from one of the oldest industries, has shown that it has realized the capability and necessity of the public cloud.

The trust in the public cloud is growing and the time is playing for the public cloud providers and against the German companies. The one who is not transforming digitally will sooner or later disappear from the market. The one who wants to keep pace with digital transformation (e.g. Internet of Things, smart products, ecommerce etc.) is not able to avoid using the public cloud, its services, modern development tools as well as the global scalability.

AWS is one of the public cloud providers who can help during this transformation process. However, AWS is complex! It is complex during the setup as well as the operation and administration of the virtual infrastructure and thus also with regard to the development of web applications and backend services. No discussion! The conversation with Zanox has clarified this once again and confirmed several conversations with other AWS interested parties. Moreover, the necessary cloud knowledge is still limited and it will take some time until it has broadly arrived.

Categories
Cloud Computing @de

Analyst Strategy Paper: Cloud Data Fabric – Enterprise Storage Services in der Cloud

Mit der wachsenden Marktreife von Public Cloud-Infrastrukturen positionieren sich diese immer mehr als gute Alternative zu On-Premise Enterprise IT-Infrastrukturen. CIOs erhalten dort eine Vielfalt an Möglichkeiten, um ihre bestehenden Infrastruktur- und Applikationsumgebungen flexibler und kosteneffizienter zu betreiben.

Aktuelle Public Cloud Storage Services wurden primär mit dem Fokus auf eine neue Generation von Anwendungen entwickelt. Sie sind somit weniger für den Betrieb von existierenden Enterprise Applikationen vorbereitet. Für die Nutzung von Legacy Enterprise Anwendungen auf Public Cloud-Infrastrukturen fehlen derzeit die dafür erforderlichen Storage-Konzepte, Standards und Technologien.

Um den Fortbestand und Betrieb klassischer Applikationsarchitekturen auf Public Cloud-Infrastrukturen sicherzustellen, ist es notwendig, die gesetzten und weit verbreiteten Standards in die Public Cloud zu überführen.

Vor dem Hintergrund, dass Legacy Applikationen weiterhin den Großteil potentieller Cloud-Migrationskandidaten gegenüber neuartigen Cloud-nativen Anwendungen ausmacht, sind bekannte Storage-Konzepte in der Cloud erforderlich, um sicherzustellen, dass sich bestehende Applikationen ohne Anpassungen auf eine Public Cloud-Infrastruktur migriert und dort weiter betreiben lassen.

Das Analyst Strategy Paper kann unter “Cloud Data Fabric: Enterprise Storage Services in der Cloud” kostenlos heruntergeladen werden.

Categories
Open Source

OpenStack Acquisitions: The sellout runs at full speed

This year OpenStack celebrates its fifth birthday. Despite its young past the open source project already caused quite a stir, driven by a solvent ecosystem consisting of the who is who of the cloud and open source industry. This has a positive affect on the market maturity. Linux needed around 10 years and thus twice as long to achieve similar market relevance. The OpenStack Foundation has learned from the older brother and does a lot of things right. One signal for the importance and market maturity of OpenStack is the acquisition behavior. The sell out runs at full speed.

OpenStack acquisitions over time

After only five years, the OpenStack community already looks back at a proud number of acquisitions. The year 2014 can be regarded as the starting shot when the first big IT vendors started their shopping tour to snap the strategic most important OpenStack startups for their portfolios.

  • April 2014: Red Hat buys Ceph storage vendor Inktank and transfers the product as „Red Hat Ceph Storage“ in the own portfolio.
  • Juni 2014: Red Hat buys OpenStack integration service provider eNovance to increase its consulting competency for its customers.
  • September 2014: Cisco buys OpenStack-as-a-Service provider Metacloud and transfers the product as „Cisco OpenStack Private Cloud“ in the own portfolio.
  • Oktober 2014: EMC buys the OpenStack distribution Cloudscaling and will release an own OpenStack product called „Caspsian“ in November 2015 that is based on the Cloudscaling technology.
  • Juni 2015: Cisco buys OpenStack pioneer Piston Cloud Computing to strengthen its Intercloud initiative.
  • Juni 2015: IBM buys OpenStack private cloud provider BlueBox to expand its hybrid cloud offering.

During this wave of mergers the big vendors have acquired most of the hitherto most promising OpenStack startups. This shows that OpenStack has made it on top of the strategic agendas of the big players and underwrites its importance. The vendors expand their portfolios but also want to become an inherent part of the OpenStack market. In addition, they buy todays rare OpenStack knowledge from the market.

However, one attractive target is still not taken: Mirantis. Even if the self-appointed pure play OpenStack vendor is today’s highly profiled acquisition candidate. With good reason, Mirantis is offering an own distribution (Mirantis OpenStack), a hosted private cloud (Mirantis OpenStack Express) as well as consulting services (Mirantis Consulting) and training services (Mirantis Training). So, a quite appealing target for the prospective buyer to make the portfolio OpenStack ready in all aspects and that at a single blow.

The shopping tour of the big vendors speaks for their commitment and the progressed maturity stage of OpenStack. Indeed, a good sign for the further development of the open source project. However, it seems that the OpenStack ecosystem more and more is getting under the control of the big players.

Categories
Strategy

CIO at the Crossroads: The Enterprise IT as a Digital Factory

The progressive movements of the digital transformation as well as new megatrends like the Internet of Things (IoT) let CIOs finally reach a crossroads. Even if statements like “IT is a business enabler” were ignored as “one of these phrases” in the past, the reality brings CIOs back down to earth. No doubt, the CIO still has a pivotal role. However, he has to meet the challenge to understand the enterprise IT as a service provider for its internal customers to enable the company to reach external customers with new digital and hybrid products. This only works if he considers the “Digital Enterprise” en bloc and restructures the enterprise IT to a “Digital Factory”.

Yesterday’s IT: Keep Things Running

Over the last three decades, IT departments worldwide have developed, introduced, updated and detached a rash of IT systems. They have digitized their companies by introducing and maintaining ERP and CRM systems, office solutions and self-developed applications. So far, they didn’t have awarded another significance. The IT department was just the maintenance of the “IT engine room”, no colleague wanted to deal with respectively was able to deal with.

Today, suddenly everything is completely different. Due to the “Consumerization of IT” and the easy access to IT resources, every employee is now able to use an iPhone or a SaaS application. It is even worse, suddenly everybody is bawling for the digital transformation. In most IT departments there is a lack of understanding for this. Transforming digital? Eventually, digital systems have been introduced and maintained over the last 30 years. Indeed, the term “digital transformation” is a little bit confusing, especially if one is working in IT for decades and has seen all developments. The digital transformation describes the radical shift of a company to an entire interconnected digital organization. Based on new technologies and applications more and more processes and process elements are reshaped and are adjusted to the requirements (real-time, connected) of the digital economy. So, it is about the tight integration of entire process and supply chains within the company as well as with partners, suppliers and customers. Finally, it is about a closer customer relationship and an optimized understanding of the customer by serving a better customer experience. Thus, the digital transformation influences customer and business relationships and changes respectively create new value chains. Among this influence, companies have the chance to develop new business models.

So, the IT department has much more responsibility as just keeping the status quo. The IT needs to understand themselves as a strategic partner and business enabler and tightly engage among different departments to understand their needs and requirements. In the digital age and during the digital transformation this can become a strategic competitive advantage for the company.

This is also the overall feedback from German companies. The results of Crisp Research’s “Digital Business Readiness” study has shown that the majority of the interviewed companies see their own IT department as a strategist (34 percent) respectively an ideas provider (21 percent) in the context of their digital transformation.

Thus, the expectations are high, which is strengthening by the fact that more than half of the respondents (58 percent) understand the digital transformation as an IT paradigm. So, IT departments and CIOs are under pressure to act as an enabler and ideas provider for digital processes and ways of working within other departments – with good reason. Hidden champions even global leaders can be found in several industries of Germany’s economy. However, especially these companies should spend very much attention to the digital change in order to retain their competitive and innovation capabilities in the future or ideally reinforce them.

The Internet of Things and the Industrial Internet are both an allegory for the digitization of all industries. New smart products will be developed and existing “analog” devices will be enhanced with sensors, thus “smart” extended and admitted into the digital value chain. Existing organizational and IT structures don’t support IT departments any longer to make the digital mind shift in good time and to react with innovative ideas to the requirements of corporate divisions to proactively serve the customer with new products and solutions. The digital transformation requires a rethinking and a radical change within IT departments. One step of this transformation is the change from an enterprise IT to a digital factory.

From an Enterprise-IT to the Digital Factory

CIOs don’t create any direct value for their companies if they just setup and operate an IT environment with standard applications. In this case they are just the supporting force in the background without having any influence on the business model respectively the business success. Those CIOs who have developed own applications in the past and thus already participated in the business success belong to the innovators of the IT guild. However, also they have to rethink their approaches. Because applications and other IT solutions have been completely focused on static processes in the past. Today’s customer expectations, new business models as well as solutions for the Internet of Things are following a dynamic behavior (so to say in real-time) and thus need to be considered in all processes and the user experience.

In order to handle the challenges on the technical side, IT departments should stop thinking in silos and instead start to transform themselves into a corporate “digital factory”.

In the center of the digital factory is a cloud based IT environment that is representing the “digital power plant” powered by infrastructure-as-a-service (IaaS) and/or platform-as-a-service (PaaS). The power plant hosts an “Application Platform” where applications are developed and operated as well as an “Analytics Engine” for the analysis and preparation of data. The resulting insights are accessible for the applications running on the application platform. The application platform can be used to develop completely new products or to digitize existing products, for example, to extend it with a sensor or a smart unit. The digital power plant is supplied with existing internal and/ or digital external resources like data or cloud services. Thus, a hybrid environment is created. The digital or digitized products like mobile apps, SaaS or IoT solutions and engagement solutions that have been created in the power plant provide the digital factory continuously with data, which leads to an ongoing improvement of the products respectively to new products. The integration of the digital factory with typical enterprise business solutions like ERP or CRM systems should also be highly considered to create a value from the existing data and to interact better and more predictive with existing and new customers.

As part of the business enablement, the digital factory should also provide the internal customers with an on demand self-service to serve them with the necessary resources like compute power, storage, microservices, development platforms or other SaaS solutions exactly in the moment when they are acting. This supports them to improve their productivity. Therefore, a cloud environment is the perfect foundation for a digital factory.

The Digital Factory is the Foundation of the Digital Enterprise

In the digital age the IT department is claimed to deliver an essential part to the product and support during its development, enhancement as well as the process optimization. This is the fundamental basis to enable a company serving its customers with the best user experience and to provide them with innovative and superior services. Therefore a radical approach is necessary. This means to bring oneself into question and rethink everything. The old entrenched structures don’t work within a digital company anymore. Modern companies are mostly technology companies, independent from their industry, supported by IT. A clear defined cloud strategy helps CIOs to build the foundation for the digital enterprise. This enables their internal and external customers to experience a convenient and especially faster access to IT resources like dynamic infrastructure, platforms and other cloud services and thus improves the overall productivity and the customer experience.

The digital factory is the foundation for novel digital and hybrid products – e.g. for the Internet of Things – as well as to develop services and prototypes more efficient.

The IT department needs to enhance from a maintainer to a product center. This includes developing new products and extending existing products with digital resources. The digital factory is the technological foundation for this transformation.

Best practice examples show that decision makers have recognized the importance.

  • Klöckner & Co. (CEO, Gisbert Rühl) a steel and metal trader drives its digital transformation with a new detached team. Therefore the center of excellence “kloeckner.i” was founded, which is promoting the digitization together with colleagues from other corporate divisions. The classical IT at Klöckner & Co. is standardized. In its digital factory “kloeckner.i” most of the things are self-developed to manufacture individual products in order to constantly answer the question: “What does the customer need to collaborate easier and more efficient with Klöckner & Co.”.
  • Volkswagen AG (Head of Application Development, Ralf Bunken) considers IT as a central element during the development of a car. Volkswagen specifically analyses data to enhance products and to make its business processes – from development over manufacturing up to sales – more efficient. However, just a digital factory is not enough. Thus, Volkswagen bets on the close and interdisciplinary collaboration across several departments and experts from different disciplines, partly in cooperation with IT suppliers. For example, the responsibility for technology and software in the “Connected Car” project lies in the hands of the automotive developers. The IT is responsible for all things outside the car. However, both areas are working closely together. Volkswagen encourages its approximately 10,000 IT employees by hosting internal hackathons and offering “Data Labs” where each employee can try new things.

Introducing the digital factory requires much more than just a technological restructuring. CIOs should also consider the following topics:

  • Consider the digital transformation as a traversing umbrella across the entire company.
  • Destroy silos and promote interdisciplinary ways of working and acting.
  • Consider the DevOps model and microservice architectures to promote the continuous delivery of IT solutions.
  • Promote and establish developer know-how within the IT department and further adjoining corporate divisions.
  • Consider the API economy as a competitive advantage to increase the customer engagement.
Categories
Internet of Things

Guidance: The Internet of Things Stack for CIOs

CEOs and CIOs who consider to enter the Internet of Things (IoT) market need to understand, which capabilities are waiting for them and at which level they are keen to play along. In addition, develop an IoT solution means to research lots of providers and and suppliers in order to find the appropriate partner for the needs. Crisp Research’s IoT stack distinguishes the most important players in the Internet of Things categorized by IoT platform providers and IoT product vendors.

The IoT platform providers are split into the categories IoT back-end and IoT enablement. Crisp Research classifies the different providers as follows:

  • IoT back-end providers: IT infrastructure is the foundation for the deployment of IoT application and services. Cloud platforms are playing a dominant role. Popular IoT back-ends are Amazon Web Services, Cisco IoT Cloud Connect or Microsoft Azure.
  • IoT enablement and middleware providers: This group includes providers of middleware who combine and integrate data as well as providers of analytics solutions who analyze and visualize data. Relevant players in this area are not only traditional IT providers like IBM, Intel and SAP but also several startups like Splunk and Parstream and industrial companies like Bosch SI and GE Software.
  • IoT network and connectivity providers: In order to establish a secure and powerful connection between the physical and digital world and to bind sensors over several communication and network standards, network and telecommunication providers are playing an elementary role in the IoT value chain.
  • IoT integrators and consultants: This providers support companies with consulting during the conception, implementation and operation of IoT services and applications. They need to have process and industry know-how as well as experience with IoT projects.
  • IoT solution and service providers: IoT product vendors represent different kind of companies producing IoT devices (wearables, sensor systems), IoT services for end users (smart home, fitness, self tracking) up to industrial specific solutions (industrial internet).
  • IoT users: IoT users are divided into the categories industrial Internet, consumer IoT and government IoT. Industrial Internet includes e.g. smart power grids, connected mobility and smart logistic. Consumer IoT includes wearables, smart home and self-tracking solutions. Government IoT contains solutions healthcare, public security and military.
Categories
Cloud Computing @de

Analyst Strategy Paper: Enterprise-IaaS – Kontrolle und Konnektivität im Multi-Standort Cloud-Betrieb

Die Planung moderner IT-Umgebungen stellt CIOs vor große Herausforderungen. Einerseits müssen sie ihre Applikationen mit skalierbaren und ausfallsicheren Infrastrukturen unterstützen. Andererseits dürfen sie dabei nicht die Kontrolle über ihre Daten und Systeme verlieren, um rechtliche Rahmenbedingungen und Compliance-Regelungen zu erfüllen.

Für den Aufbau moderner IT-Infrastrukturen gelten Infrastructure-as-a-Service (IaaS)-Umgebungen als gesetzter Standard. Sie bilden die notwendige Grundlage, um Unternehmensapplikationen zukunftsorientiert, skalierbar und ausfallsicher zu betreiben.

Enterprise-IaaS Anbieter haben ihre Portfolios speziell an den Herausforderungen und Bedürfnissen von Unternehmenskunden ausgerichtet und können auf die individuellen Anforderungen eingehen. Dies zeigt sich in der Kombination der Skalierbarkeit einer Public Cloud-Infrastruktur mit der Sicherheit und dem höheren Kontroll-Level einer Private Cloud- Infrastruktur.

Enterprise-IaaS Umgebungen bilden das ideale Fundament, um existierende Enterprise Applikationen auf eine Cloud-Infrastruktur zu migrieren – ohne Kompromisse bei den Themen Governance, Kontrolle und Compliance eingehen zu müssen.

Das Analyst Strategy Paper kann unter “Enterprise-IaaS: Kontrolle und Konnektivität im Multi-Standort Cloud-Betrieb” kostenlos heruntergeladen werden.