Archive for the ‘conference’ Category

Cloud Summit Executive: Making "Pay-As-You-Go" Customers Happy

October 15, 2008 Leave a comment

I got to spend a few hours yesterday at the Cloud Summit Executive conference at the Computer History Museum in Mountain View, California, today. The Summit was unique, at least in the Bay Area, for its focus on the business side of cloud computing. The networking was quite good, with a variety of CxOs digging into what the opportunities and challenges are for both customers and providers. The feedback that I got from those that attended the entire day was that the summit opened eyes and expanded minds.

Ken Oestreich has great coverage of the full summit.

I attended the afternoon keynotes, which started with a presentation from SAP CTO Vishal Sikka which seemed at first like the usual fluff about how global enterprise markets will be addressed by SaaS (read “SAP is the answer”). However, Vishal managed to weave in an important message about how the cloud will initially make some things worse, namely integration and data integrity. Elasticity, he noted, is the key selling point of the cloud right now, and it will be required to meet the needs of a heterogeneous world. Software vendors, pay attention to that.

For me, the highlight of the conference was a panel led by David Berlind at TechWeb, consisting of Art Wittmann of Information Week, Carolyn Lawson, CIO of the California Public Utilities Commission, and Anthony Hill, CIO of Golden Gate University. Ken covers the basic discussion quite well, but I took something away from the comments that he missed: both CIOs seemed to be in agreement that the contractual agreement between cloud customer and cloud provider should be different than those normally seen in the managed hosting world. Instead of being service level agreement (SLA) driven, cloud agreements should base termination rights strictly on customer satisfaction.

This was eye opening for me, as I had always focused on service level automation as the way to manage up time and performance in the cloud. I just assumed that the business relationship between customer and provider would include distinct service level agreements. However, Hill was adamant that his best SaaS relationships were those that gave him both subscription (or pay-as-you-use) pricing and the right to terminate the agreement for any reason with 30 days notice.

Why would any vendor agree to this? As Hill points out, it’s because it gives the feeling of control to the customer, without giving up any of the real barriers to termination that the customer has today; the most important of which is the cost of migrating off of the provider’s service. Carolyn generalized the benefits of concepts like this beautifully when she said something to the effect of

“The cloud vendor community has to understand what [using an off premises cloud service] looks like to me — it feels like a free fall. I can’t touch things like I can in my own data center (e.g. AC, racks, power monitors, etc.), I can’t yell at people who report to me. Give me a sense of control; give me options if something goes wrong.”

In other words, base service success on customer satisfaction, and provide options if something goes wrong.

What a beautifully concise way to put a very heart felt need of most cloud consumers–control over their company’s IT destiny. By providing different ways that a customer can handle unexpected situations, a cloud provider is signaling that they honor who the ultimate boss is in a cloud computing transaction–the customer.

Hill loved his 30 day notice for termination clause with one of his vendors, and I can see why. Not because he expects to use it, but because it let’s him and the vendor know that Golden Gate University has decision making power, and the cloud vendor serves at the pleasure of Golden Gate University, not the other way around.


My Night at Camp

Its late, so I’ll keep this brief. I just got home from CloudCamp Silicon Valley on the Sun Microsystems campus in Menlo Park. What a great event. I am completely sold on the unconference format, and very much appreciate the contributions of the organizers and sponsors. If you get a chance to attend a CloudCamp at a city near you, do it. You can’t help but broaden your understanding of this loosely defined monstrosity we call cloud computing.

I attended two sessions, and organized a third. The first discussed technologies that could be used to stitch together processes and transactions in the clouds. I think I need to process the ideas there a little more before I write about them, but workflow/ESB concepts are certainly alive and well in the cloud according to this session.

The second session covered the need for common APIs and architectures in the cloud, and what can be done to make J2EE/.NET/whatever applications more “cloud friendly”. We discussed the concept of software fluidity, the different needs of IaaS and PaaS based architectures, and ways to address certain traits of distributed systems that force tradeoffs between consistency, availability and partitioning. It was an amazingly cool discussion, and I learned a lot from everyone involved.

The final session was one I organized, targeting the US legal climate for the cloud, and the constitutional issues I’ve written about here before. Needless to say it was lightly attended, but each participant lent significantly to a far ranging conversation about the Stored Communications Act, the Patriot Act and the Warshak vs. USA case, and what–if anything–can be done about it. I think I’ll blog about the outcome of this conversation a little later as well.

I also enjoyed meeting with Sam Charrington, Lew Tucker, Franco Travostino, Paul Lancaster, Luis Sala, and all the others I shared thoughts with throughout the evening. I go to bed tonight inspired and hopeful about the cloud for perhaps the first time in several weeks. Thanks again to those that made it happen.