Enterprise cloud summary, with additional commentary on the recent public cloud announcements and the good, bad and ugly of leading vendors.

1. The Good the Bad and the Ugly
Critical Decisions for the Cloud Enabled Enterprise
Adrian Cockcroft @adrianco #ccevent March 2014

2. | Battery Ventures

3. | Battery Ventures
Typical reactions to my Netflix talks…
“You guys are
crazy! Can‟t
believe it”
– 2009
“What Netflix is doing
won‟t work”
– 2010
It only works for
„Unicorns‟ like
Netflix”
– 2011
“We‟d like to do
that but can‟t”
– 2012
“We‟re on our way using
Netflix OSS code”
– 2013

4. | Battery Ventures
Cloud Native for High Availability at Scale
NetflixOSS at netflix.github.com and techblog.netflix.com
Over 40 projects, PaaS, NoSQL, Big Data, etc.

5. | Battery Ventures
What I learned from my time at Netflix
● Speed wins in the marketplace
● Remove friction from product development
● High trust, low process, no hand-offs between teams
● Freedom and responsibility culture
● Don‟t do your own undifferentiated heavy lifting
● Use simple patterns automated by tooling
● Self service cloud makes impossible things instant

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Demands on IT Increased 1000x
Compete or lose in the market!

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Evolution of Business Activities
Genesis Custom Product Utility
Simon Wardley http://blog.gardeviance.org/2014/03/on-mapping-and-evolution-axis.html
Innovate Optimize

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Mature Industry Example - Electric Power Utility
Innovate Optimize
http://publib.boulder.ibm.com/infocenter/tivihelp/v4r1/index.jsp?topic=%2Fcom.ibm.sspc_v15.doc%2Ffqz0_r_sspc_power_cords.html&lang=en
Light
Electric Motors
Heat / Cool
Microwaves
Networks
Computers
Hydroelectric
Diesel Generator
Nuclear Power
Gas Power
Wind Power
Solar Power
Local
Transmission
Residential
Adaptors
Transformers
Rectifiers
Standardize
New standard plugs for
new volume applications
Consumer
Ecosystems
Generator
Ecosystems

10. | Battery Ventures
Cloud Industry Moving to Utility
Innovate Optimize
Desktop
Mobile
Services
Social
Things
Instances
Storage
Network
Databases
Services
Public
Colocation
On-Premise
Libraries
Platforms
Standardize
APIs
Developer
Ecosystems
Operator
Ecosystems
Operator ecosystems need a new volume use case to get a new API adopted

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How fast can you innovate?

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Non-Cloud Product Development
Months before you find out whether the product meets the need
Hardware provisioning is undifferentiated heavy lifting – replace it with IaaS
Business
Need
• Documents
• Weeks
Approval
Process
• Meetings
• Weeks
Hardware
Purchase
• Negotiations
• Weeks
Software
Development
• Specifications
• Weeks
Deployment and
Testing
• Reports
• Weeks
Customer
Feedback
• It sucks!
• Weeks
IaaS
Cloud

13. | Battery Ventures
IaaS Based Product Development
Weeks before you find out whether the product meets the need
Software provisioning is undifferentiated heavy lifting – replace it with PaaS
Business Need
• Documents
• Weeks
Software Development
• Specifications
• Weeks
Deployment and Testing
• Reports
• Days
Customer Feedback
• It sucks!
• Days
PaaS
Cloud

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Process Hand-Off Steps for Product Development on IaaS
Product Manager
Development Team
QA Integration Team
Operations Deploy Team
BI Analytics Team

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Process Hand-Off Steps for Feature Development on PaaS
Product Manager
Developer
BI Analytics Team

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PaaS Based Product Feature Development
Days before you find out whether the feature meets the need
Building your own business apps is undifferentiated heavy lifting – use SaaS
Business Need
• Discussions
• Days
Software Development
• Code
• Days
Customer Feedback
• Fix this Bit!
• Hours
SaaS/
BPaaS
Cloud

17. | Battery Ventures
SaaS Based Business App Development
Hours before you find out whether the feature meets the need
Business Need
• GUI Builder
• Hours
Customer Feedback
• Fix this bit!
• Seconds

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What Happened?
Rate of change
increased
Cost and size
and risk of
change reduced

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Observe
Orient
Decide
Act
Land grab
opportunity Competitive
Move
Customer
Pain Point
Analysis
JFDI
Plan
Response
Share Plans
Incremental
Features
Automatic
Deploy
Launch AB
Test
Model
Hypotheses
BIG DATA
INNOVATION
CULTURE
CLOUD
Measure
Customers
Continuous
Delivery on
Cloud

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The Good, Bad and Ugly of Cloud

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Cloud Enterprise IT Adoption
By Simon Wardley http://enterpriseitadoption.com/
You Are
Here

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What happened last week?
● Demo: Live instance migration
● Sustained Usage Pricing
Discount for over 25%/month
● New Google DNS Service
● New MS Windows Support
● Price cuts
Storage 2.6 cents/GB/month
Storage access 1 cent/10k ops
32% reduction in instance cost
Cost for n1-standard == m3
● Demo: Workspaces Cloud VDI
● New High Memory Instances
r3 cheaper & bigger than m2
● Updated Storage Instances
i2 cheaper & bigger than hi1
● Price cuts
S3 2.75-3.0 cents/GB/month
S3 access 0.4 cent/10k ops
m3 cheaper&faster than m1
c3 cheaper&faster than c1
Google Cloud Amazon Web Services

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What Was Missing Last Week
● No big enterprise customers
● No reservation options
● Need more regions and zones
● Need lower inter-zone latency
● No SSD options
● No per minute billing
● Need simpler discount options
● Need more regions and zones
● No real PaaS strategy
● No instance migration
● Need m3.small to replace m1
Google Cloud Amazon Web Services
Too many architectural differences make using both together tricky

24. | Battery Ventures
AWS Good, Bad and Ugly
● Good
Most enterprises now have an AWS strategy – as a primary IT vendor
● Bad
AWS partners have to keep dodging AWS products
● Ugly
Retail industry refuses to do business with Amazon

25. | Battery Ventures
Google Cloud Good, Bad and Ugly
● Good
Google‟s aggressive goal to be faster and cheaper than AWS
● Bad
Scales in theory, but too few zones/regions and no really big customers
● Ugly
Almost no Enterprise IT traction, sales and support not there yet

26. | Battery Ventures
Microsoft Azure Good, Bad and Ugly
● Good
Technology, scale, their own big .Net developer ecosystem, Satya!
● Bad
Enterprises that are trying to reduce their dependency on Microsoft
● Ugly
Vestigial Linux support, not trying to compete head on with AWS

27. | Battery Ventures
IBM Softlayer Good, Bad and Ugly
● Good
Technology, sales force, enterprise oriented ecosystem
● Bad
IBM is very late to the game
● Ugly
Hard to make a profitable transition from product to low margin services

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Other Public Clouds Good, Bad and Ugly
● Good
Lots of specialized niche application areas and markets to target
● Bad
The big vendors are taking over the high value niches
● Ugly
Billions of $ investment needed to play in this game

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How do I get there?

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"This is the IT swamp draining manual for anyone who is neck deep in alligators.” Adrian
Cockcroft, Cloud Architect at Netflix

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Continuous Deployment for Speed
New book May 2014
Flow Conference:
Flowcon 2013 – See videos
Flowcon 2014 – September…

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Speed wins in the marketplace

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Any Questions? Presentations by @adrianco
● Battery Ventures http://www.battery.com
● Adrian‟s Blog http://perfcap.blogspot.com
● Netflix Tech Blog http://techblog.netflix.com
● Netflix Slideshare http://slideshare.com/netflix
● Migrating to Microservices – Qcon London - March 6th, 2014
● Monitorama Keynote Portland OR - May 7th, 2014
● GOTO Chicago Opening Keynote May 20th, 2014
● DevOps Summit at Cloud Expo New York – June 10th, 2014
● GOTO Copenhagen/Aarhus – Denmark – Oct 25th, 2014