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Peter Coffee at Southland Technology Conference


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Cloud computing should do much more than merely relocate the current delays, risks, and costs of application development. Peter Coffee, former Technology Editor of eWEEK, explores the status and prospects of the multi-product, multi-vendor cloud, where complementary services offer proven development leverage and enable next-generation business processes.

Peter Coffee joined in January of 2007, after spending 18 years as an analyst and columnist at the enterprise technology journal eWEEK (including time under its former title PC Week). Based near Los Angeles, he works with corporate and commercial application developers to establish an international community of best practices on the cloud computing Platform-as-a-Service (PaaS).

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Peter Coffee at Southland Technology Conference

  1. 1. Moving Beyond Migration Re-Inventing Process in “ ” Peter Coffee Head of Platform Research inc.
  2. 2. Safe Harbor Safe harbor statement under the Private Securities Litigation Reform Act of 1995: This presentation may contain forward-looking statements that involve risks, uncertainties, and assumptions. If any such uncertainties materialize or if any of the assumptions proves incorrect, the results of, inc. could differ materially from the results expressed or implied by the forward-looking statements we make. All statements other than statements of historical fact could be deemed forward-looking, including any projections of subscriber growth, earnings, revenues, or other financial items and any statements regarding strategies or plans of management for future operations, statements of belief, any statements concerning new, planned, or upgraded services or technology developments and customer contracts or use of our services. The risks and uncertainties referred to above include – but are not limited to – risks associated with developing and delivering new functionality for our service, our new business model, our past operating losses, possible fluctuations in our operating results and rate of growth, interruptions or delays in our Web hosting, breach of our security measures, risks associated with possible mergers and acquisitions, the immature market in which we operate, our relatively limited operating history, our ability to expand, retain, and motivate our employees and manage our growth, new releases of our service and successful customer deployment, our limited history reselling products, and utilization and selling to larger enterprise customers. Further information on potential factors that could affect the financial results of, inc. is included in our annual report on Form 10-Q for the most recent fiscal quarter: this document and others are available on the SEC Filings section of the Investor Information section of our Web site. Any unreleased services or features referenced in this or other press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase our services should make the purchase decisions based upon features that are currently available., inc. assumes no obligation and does not intend to update these forward-looking statements.
  3. 3. “Why aren’t enterprise apps as easy to use as” – Straightforward to discover and evaluate – Negligible cost of adoption – Non-disruptive upgrades – World-class infrastructure robustness and security for all Myths require busting – Multi-tenancy does not preclude top-tier security – Packaged services can still enable deep customization – Remotely operated systems can integrate with legacy assets – Individual customers can still accept or defer upgrades at will These cloud truths are still “new news” – If you have to buy new hardware, it is not a cloud – If you have to install, patch, and disruptively update software, it is not a cloud The First Decade of SaaS
  4. 4. Password security policies Rich Sharing Rules User Profiles SSO/2-factor solutions Login… Authenticate… Apply Data Security Rules… View Filtered Content Bottom-Up Design to be “Shared and Secure”
  5. 5. Every Act an Invocation: Granular Privilege
  6. 6. Quickly approaching “Five 9s” • > 99.997% of planned availability • Continually shrinking maintenance windows Live System Status Security Best Practices Historical Performance Full Public Disclosure Amazon Google Trust through openness
  7. 7. Trust Attainment Enables Cloud Adoption Robust infrastructure security Rigorous operational security Granular customer controls – Role-based privilege sets – Convenient access control & audit “Sum of all fears” scrutiny and response – Multi-tenancy reduces opportunities for error – The most demanding customer sets the bar
  8. 8. Coherent Code Base and Managed InfrastructureCoherent Code Base and Managed Infrastructure Your Clicks Your Code User Interface Logic Database Metadata representations: Rigorously partitioned data, logic and customizations for multiple customers Build strategic applications Customize any aspect Upgrade when convenient Preserve IP control The Metadata Model: Cloud + Customization
  9. 9. Cloud Integration: No Need for Rip/Replace Mash-ups from Web and AppExchange Native Desktop Connectors Integration Partner Ecosystem Developer Toolkits Native ERP Connectors
  10. 10. “If you take the ideal world, everything is done as a service: computing, storage, software and operations.” “The risk for enterprises that don't start a SaaS migration strategy soon is that their IT organizational structures will be a competitive disadvantage.” Geir Ramleth CIO, Bechtel Corp.
  11. 11. Cloud Computing Shrinks IT’s Carbon Footprint On-premise Software CO2 Emissions (grams CO2 per transaction) 0.2 0.03 1.35 * “Cloud Computing Emissions Comparison,” Nucleus Research, 2 Sept 2010 Watt-hrs per transaction statistics converted to CO2 / transaction by using U.S. carbon output ratios computed by region by EPA
  12. 12. If we talk about cost reduction, the most I can do for you is cut your IT spending by 100%. Then we’re done. If we talk about value creation, I can keep on delivering value with no upper bound. That’s a much more interesting conversation. The Cloud’s Lower Cost is Compelling. So What? If you want cheap IT, go ahead. You won’t be in business next year. Your competitors will do projects with attractive ROI, while you spend less, and you won’t be competitive in service or performance. Demand curves slope downwards. Better apps at lower cost will expand demand and grow total IT spending. And that’s OK.
  13. 13. Deployed a custom app in three months Records, tracks and manages contacts and activities between staff and external partners App scaled up as census went active; will unwind as process concludes Managed 2,200 partners: temp agencies geographically dispersed at headquarters and 12 regional offices The bureau has a database of 170,000 temporary workers that had been initially planned to be hosted in house. However, problems with the contract forced an alternative solution. was the alternative solution and the database was rolled out in six weeks. Compared to the months or years that the average government IT project requires for deployment, the database was deployed shockingly fast., 1/22/2010 U.S. Decennial Census Agility Enabling Capability
  14. 14. True Cloud Storage as a Service – No one can sell you a hard drive that tells you when your data’s out of date – In the cloud, your storage can be self-cleaning True Cloud Customer Support as a Service – No one can build you a call center that knows everything your customers know…and everything they’re saying to each other about you – In the cloud, your service center can embrace and interact with social nets True Cloud Application Platform as a Service – No one can give you a local development platform that automatically deploys your applications onto every new portable device – In the cloud, apps can acquire new features and support new devices at zero cost to the developer But Let’s Not Settle for Parity
  15. 15. Addressing Data Quality: A Cloud that Maintains the Cloud Largest, Most Accurate Database: 22 million+ B2B contacts Massive, Engaged Community: 1.2 million+ community adds 36,000 new contacts per day Real-time Updates: Community updates 12,000 contacts per day
  16. 16. Legacy Models Don’t Connect with Today’s Constituents But customers/constituents are doing this:Old models assume this… Contact Center Community Sites
  17. 17. Traditional Platforms Are Too Expensive, Complicated & Slow Too Expensive Install and Integrate Stack Configure Software Write and Test Lots of Code Deploy and Load Test Monitor and Tune Patch and Regression Test 1 2 3 4 5 6 Too Complicated Too Slow
  18. 18. High-Function APIs: a Better Way to Build Cloud Apps
  19. 19. Measured Results: Far Superior to Process Migration 2009 IDC Research Report Savings with Staffing 76%-85% Development Time 76% Time to Make Changes 75% Total Cost 54%
  20. 20. Qualcomm Opens New Support Channel In One Week Mark Silber IT Systems Architect $11B Chip Manufacturer 20,000 customers (engineers) that require 24/7 support Deployed first customer portal in 1 week Retired 40 servers and 11 databases Reduced IT CRM support costs by 60% 100,000 self-service portal users
  21. 21. New Capabilities Added At Will… …Not When the Capital Budget Allows Chatter PlatformChatter Platform Profiles Check to Enable Feeds Status Updates Groups Apps Document Sharing Social Apps
  22. 22. Shrinking Devices Accelerating Product Cycles “The Portable Intelligence Platform is built on cloud computing application environment. “The development environment enables easy integration via web services with your company's existing software platforms (e.g. ERP, CRM, Finance etc.). “It is also an ideal environment for the development for the P.I. iPad, Mobile and Developer APIs.”
  23. 23. 1999: Why isn’t all enterprise software like 2010: Why isn’t all enterprise software like Facebook?
  24. 24. 2009: Social Networking Surpasses Email Email Users Social Networking Users GlobalUsers(MM) Social Networking Users Surpass Email Users on 7/09 Source: Morgan Stanley Internet Mobile Report, December 2009 Data is for unique, monthly users of social networking and email usage.
  25. 25. It’s hard to add security to a tool that shares by default It’s possible to add social tools to a proven trust model Enterprise Clouds Enable Secure Communities
  26. 26. What is the organization’s mission? What information supports that mission? Where does it originate? Who holds it? Who can see it? What events change it? When is that important? How do people know? How can people act? The Map to “Securely Social”
  27. 27. Where are key players already having conversations? What facilities exist for tapping that stream? What are the cultural norms of that community? When should you be present? How should you participate? Who will represent you? How will that process scale? What will you learn? How will you change? The Map to “Securely Social”
  28. 28. Bank of America Joins the Twitter Conversation Responds in real-time to customer tweets (average 1,100 tweets per day) 6,000 Twitter followers Personalized Service: each twitter agent has a picture and name Operationalizes Twitter as formal customer service channel David Knapp Customer Service Bank of America
  29. 29. Social Business Processes Collaborative process creation & maintenance Best practice sharing Integration with feeds and other social channels Social process monitoring Steve Wood. Great – I can help with the case escalation by linking in the Apple Escalation Process. New process created: iPad Tier 1 Support Process (Goals: Run time, 5 min) Andrew Leigh. I need to create a new customer service process for the iPad, can you guys help? Varadarajan Rajaram. Yes, I know this product well – there are a bunch of solutions I can build into this process.
  30. 30. Real-Time Device Interactions Instant updates, not limited by human speed or attention Effective integration of hardware speed & human judgment The next new application opportunity public String CloudThoughts{ get; set;} Mike Leach,
  31. 31. Customers Building Cloud Apps: 5X Faster at Half the Cost Franchise Management App 1/3 the cost of .Net Departmental Apps Medical Research Apps Added 11 New Products in 12 Months Business Process Apps Data-Driven Web Sites Community Web Site 10 Million Users Built in 3 Weeks Replaced 5,000 Notes Seats 5X Faster 1/5 the Cost Lotus Notes Replacement
  32. 32. Yes, There Is a True Cloud Mash-ups from Web and AppExchange Native Desktop ConnectorsNative ERP Connectors
  33. 33. “Enterprise apps can be as easy to use as!” – Straightforward to discover and evaluate – Negligible cost of adoption – Non-disruptive upgrades – World-class infrastructure robustness and security for all Myths are dispelled by demonstrations – Multi-tenancy has not compromised security – Service composition accelerates customization – Cloud integration adds value to legacy assets – Almost all customers welcome rapid upgrades These cloud truths are still “new news” – If you have to buy new hardware, it is not a cloud – If you have to install, patch, and disruptively update software, it is not a cloud Even After a Decade of SaaS
  34. 34. Cloud Platforms: Much Better than Burning Money Spot-market auction site and on-line dealer training system Built in one week for $50k Brought on-line at end of week 2 • Week 3 revenues $500k • Week 4 revenues $1M • Week 5 revenues $5M • Week 6 revenues $8M Internal rate of return 383%/week Annualized: 36,749 decillion % (Your mileage may vary)
  35. 35. Compelling Cloud ROI Elevating IT Jobs Some regions (e.g., North Carolina) are actually showing net growth in positions vs. two years ago Hiring execs say: Colleges are five years behind the market in skills emphasis Business process engineering and collaboration systems are key opportunities Climb higher on the ladder of abstraction
  36. 36. Peter Coffee Head of Platform Research Q&A?
  37. 37. Currently used in critical service sectors – 53% of high-tech firms – 40% of financial services firms – 37% of legal services providers – 35% of retail firms – 32% of health care providers – 32% of manufacturers – 29% of educational institutions Plans for expanded use across the board – 73% of health care providers – 75% of government agencies – 75% of high-tech firms – 70% of all current users Sources: Accenture, Mimecast surveys of US/Canada IT decision makers Broad Cloud Services Adoption
  38. 38. Questions about security: perception of security risk is #1 concern about cloud computing in nearly every survey – OK, so ~80% of people believe that the cloud is inherently insecure – 80% of Americans also believe the government is hiding its knowledge of alien visitors to Earth – Fears are refuted by facts • ISO 27001 • SAS 70 Type II • SysTrust – Fact: Silicon Valley VCs say that IPOs are made easier when startups use cloud services to address their SarbOx requirements What do CIOs not want?
  39. 39. 4 Months (Oct ’06- Feb ’07) 1 Month (Dec ’06) 5 Months (Dec ’06 – May ’07) 2Q07 Deployments “This is process lite. It gives my business users what they want, a unique app for each sales team, fundamentally reflecting their own personality. “And yes, I get a single standard SAP integration. It’s a terrific success.” –CIO, Fortune 500 Firm SAP Back-end Integration Customized for Diverse Sales Groups Sales Distributors Sales Distributors EMEA Inside Sales EMEA Inside Sales AFS Global Sales AFS Global Sales FLPR Field Sales FLPR Field Sales Cloud Integration: New Leverage for Knowledge
  40. 40. 40 Database Platform Services Your Java Apps VMware vSphere Spring & Tomcat vCloud Technology VMware Managed Application Stack Breaking Developer Boundaries
  41. 41. 41 Use the Spring Tool Suite Eclipse IDE Your Java App Drag-and-drop your app to the Cloud VMware vCloud Technology Automatically Manages Java Stack Free at Build Java Apps the Way You Do Today
  42. 42. zSeriesS/3904300S/370S/360IBM 701Mainframe Sun/AMD x86 Servers Niagara CPUs Sun/ILM Render Farms Sun Workstations & Servers DEC VAX 11/780 DEC PDP-8 Mini Windows XP & Mac OS X Windows 3.x/9x/NT & Linux 1.0 IBM PC Macintosh MITS AltairPC ’00s’90s’80s’70s’60s’50s To Everything There is a Season
  43. 43. Appearance Em ergence A scendance R efinem ent… zSeriesS/3904300S/370S/360IBM 701Mainframe Sun/AMD x86 Servers Niagara CPUs Sun/ILM Render Farms Sun Workstations & Servers DEC VAX 11/780 DEC PDP-8 Mini Windows XP & Mac OS X Windows 3.x/9x/NT & Linux 1.0 IBM PC Macintosh MITS AltairPC Grid Computing X Window Cloud Apps & Platforms ’00s’90s’80s’70s’60s’50s