Tag Archives: Hyper-Scalers

What Services Providers Need to Think About in 2019 and Beyond…

We are entering interesting times in the cloud space! We should no longer be talking about the cloud as a destination and we shouldn’t be talking about how cloud can transform business…those days are over! We have entered the next level of adoption whereby the cloud as a delivery framework has become mainstream. You only have to look at what AWS announced last year at Re:Invent with its Outposts offering. The rise of automation and orchestration in mainstream IT also has meant that cloud can be consumed in a more structured and repeatable way.

To that end…where does it leave traditional Service Providers who have for years offered Infrastructure as a Service as the core of their offerings?

Last year I wrote a post on how the the VM shouldn’t  be the base unit of measurement for cloud…and even with some of the happenings since then, I remain convinced that Service Providers can continue to exist and thrive through offering value around the VM construct. Backup and DR as a service remains core to this however and there is ample thirst out there in the market for customers wanting to consume services from cloud providers that are not the giant hyper-scalers.

Almost all technology vendors are succumbing to the reality that they need to extend their own offering to include public cloud services. It is what the market is demanding…and it’s what the likes of AWS Azure, IBM and GCP are pushing for. The backup vendor space especially has had to extend technologies to consume public cloud services such as Amazon S3, Glacier or Azure Blob as targets for offsite backups. Veeam is upping the ante with our Update 4 release of Veeam Backup & Replication 9.5 which includes Cloud Tier to object storage and additional Direct Restore capabilities to Azure Stack and Amazon EC2.

With these additional public cloud features, Service Providers have a right to feel somewhat under threat. However we have seen this before (Office 365 for Hosted Exchange as an example) and the direction that Service Providers need to take is to continue to develop offerings based on vendor technologies and continue to add value to the relationship that they have with their clients. I wrote a long time ago when VMware first announced vCloud Air that people tend to buy based on relationship…and there is no more trusted relationship than that of the Service Provider.

With that, there is no doubting that clients will want to look at using a combination of services from a number of different providers. From where I stand, the days of clients going all in with one provider for all services are gone. This is an opportunity for Service Providers to be the broker. This isn’t a new concept and plenty of Service Providers have thought about how they themselves leverage the Public Cloud to not only augment their own backend services, but make them consumable for their clients via there own portals or systems.

With all that in mind…in my opinion, there are five main areas where Service Providers need to be looking in 2019 and beyond:

  1. Networking is central this and the most successful Service Providers have already worked this out and offer a number of different networking services. It’s imperative that Service Providers offer a way for clients to go beyond their own networks and have the option to connect out to other cloud networks. Telco’s and other carriers have built amazing technology frameworks based on APIs to consume networking in ways that mean extending a network shouldn’t be thought of as a complex undertaking anymore.
  2. Backup, Replication and Recovery is something that Service Providers have offered for a long time now, however there is more and more completion in this area today in the form of built in protection at the application and hardware level. Where providers have traditionally excelled at is a the VM level. Again, that will remain the base unit of measurement for cloud moving forward, but Service Providers need to enhance their BaaS, R/DRaaS offerings for them to remain competitive. Leveraging public cloud to gain economies of scale is one way to enhance those offerings.
  3. Gateway Services are a great way to lock in customers. Gateway services are typically those which a low effort for both the Service Provider and client alike. Take the example of Veeam’s Cloud Connect Backup. It’s a simple service to setup at both ends and works without too much hassle…but there is power for the Service Provider in the data that’s being transferred into their network. From there auxiliary services can be offered such as recovery or other business continuity services. It also leads into discussions about Replication services which can be worked into the total service offering as well.
  4. Managed Services is the one thing that the hyper-scalers can’t match Service Providers in and it’s the one thing that will keep all Service Providers relevant. I’ve mentioned already the trusted advisor thought process in the sales cycle. This is all about continuing to offer value around great vendor technologies that aims to secure the Service Provider to client relationship.
  5. Developing a Channel is central to be able to scale without the need to add resources to the business. Again, the most successful Service Providers all have Channel/Partner program in place and it’s the best way to extend that managed service, trusted provider reach. I’ve seen a number of providers not able to execute on a successful channel play due to poor execution, however if done right it’s one way to extend that reach to more clients…staying relevant in the wake of the hyper-scalers.

This isn’t a new Differentiate or Die!? message…it’s one of ensuring that Service Providers continue to evolve with the market and with industry expectation. That is the only way to thrive and survive!

Looking Beyond the Hyper-Scaler Clouds – Don’t Forget the Little Guys!

I’ve been on the road over the past couple of weeks presenting to Veeam’s VCSP partners and prospective partners here in Australia and New Zealand on Veeam’s Cloud Business. Apart from the great feedback in response to what Veeam is doing by way of our cloud story I’ve had good conversations around public cloud and infrastructure providers verses the likes of Azure or AWS. Coming from my background working for smaller, but very successful service providers I found it almost astonishing that smaller resellers and MSPs seem to be leveraging the hyper-scale clouds without giving the smaller providers a look in.

On the one hand, I understand why people would choose to look to Azure, AWS and alike to run their client services…while on the other hand I believe that the marketing power of the hyper-scalers has left the capabilities and reputation of smaller providers short changed. You only need to look at last week’s AWS outage and previous Azure outages to understand that no cloud is immune to outages and it’s misjudged to assume that the hyper-scalers offer any better reliability or uptime than the likes of providers in the vCloud Air Network or other IaaS providers out there.

That said, there is no doubt that the scale and brain power that sits behind the hyper-scalers ensures a level of service and reliability that some smaller providers will struggle to match, but as was the case last week…the bigger they are, the harder they fall. The other things that comes with scale is the ability to drive down prices and again, there seems to be a misconception that the hyper-scalers are cheaper than smaller service providers. In fact most of the conversations I had last week as to why Azure or AWS was chosen was down to pricing and kickbacks. Certainly in Azure’s case, Microsoft has thrown a lot into ensuring customers on EAs have enough free service credits to ensure uptake and there are apparently nice sign-up bonuses that they offer to partners.

During that conversation, I asked the reseller why they hadn’t looked at some of the local VCSP/vCAN providers as options for hosting their Veeam infrastructure for clients to backup workloads to. Their response was, that it was never a consideration due to Microsoft being…well…Microsoft. The marketing juggernaut was too strong…the kickbacks too attractive. After talking to him for a few minutes I convinced him to take a look at the local providers who offer, in my opinion more flexible and more diverse service offerings for the use case.

Not surprisingly, in most cases money is the number one factor in a lot of these decisions with service uptime and reliability coming in as an important afterthought…but an afterthought non-the less. I’ve already written about service uptime and reliability in regards to cloud outages before but the main point of this post is to highlight that resellers and MSP’s can make as much money…if not more, with smaller service providers. It’s common now for service providers to offer partner reseller or channel programs that ensure the partner gets decent recurring revenue streams from the services consumed and the more consumed the more you make by way of program level incentives.

I’m not going to do the sums, because there is so much variation in the different programs but those reading who have not considered using smaller providers over the likes of Azure or AWS I would encourage to look through the VCSP Service Provider directory and the vCloud Air Network directory and locate local providers. From there, enquire about their partner reseller or channel programs…there is money to be made. Veeam (and VMware with the vCAN) put a lot of trust and effort into our VCSPs and having worked for some of the best and know of a lot of other service provider offerings I can tell you that if you are not looking at them as a viable option for your cloud services then you are not doing yourself justice.

The cloud hyper-scalers are far from the panacea they claim to be…if anything, it’s worthwhile spreading your workloads across multiple clouds to ensure the best availability experience for your clients…however, don’t forget the little guys!

Cross Cloud: Why The VM Shouldn’t Be The Base Unit of Measurement

I’ve been sitting on this topic since the VMworld 2016 US Keynote where VMware announced the Cross Cloud Architecture. I posted some raw thoughts the day after keynote and have been reflecting on how the Cross Cloud Platform could impact on VMware’s vCAN business. As mentioned previously I believe it’s representative of how VMware is worrying over it’s future relevance and reacting to current market fads all while ultimately worrying about how the hyper-scalers will impact their core infrastructure business.

The concept of cross cloud isn’t new and in truth a lot of vendors today are working to, or have solutions that aim to convert workloads from one platform to another. Zerto do this with their Cloud Fabric with the ability to move certain VMs from ESXi to Hyper-V, AWS and Azure and every combination in between. Veeam also have a new feature where you can restore ESXi or Hyper-V VMs to Azure…again, limited in functionality but a strong indication of what’s to come given the latest Veeam announcements.

Both Zerto and Veeam market their solutions well, however those that have been involved in V2Vs know that only under certain conditions do conversions go smoothly. There is no doubt this cross platform world is getting more reliable and more and more vendors are chasing the perfect conversion. However what Veeam and Zerto are offering is Backup and DR services that complement VM workloads either on-premises or in a cloud…the end game with these products isn’t mobility…its availability.

Focusing back on VMware it was clear to almost everyone that the Cross Cloud Platform featuring Azure and AWS workload migrations, was tech previewed to show that VMware is relevant in an enterprise multi cloud world but I am going to argue that the focus on the VM as the base unit of measurement is misguided…especially when it comes to VMware supporting it’s vCloud Air Network providers. I understand it as a necessity being able to have a class of portable applications in this new microservice and serverless world while having them transportable between multiple clouds. Again, I don’t believe the VM should be the base unit of measurement and the unit shown to be the most transportable.

Service providers need to play to their strengths, which in the vCAN world is no bill shock fixed cost IaaS workloads. This remains the base platform for a significant portion of any on-premises or cloud workload. Service providers take most of their revenue stream from compute, storage and networking that are the building blocks of instance based and resource pool offerings from which VMs can be provisioned and consumed. If you ask any service provider they would say that they would like total VM stickiness and any mechanism that aims to make VMs more portable will impact the bottom line and threatens ongoing viability.

Having customers access a VMware provided console that moves VM workloads off VMware based infrastructure and onto AWS or Azure to my mind is close to madness, and while there is an argument to suggest that cloud is the new hardware and VMware want to manage this new hardware…it still doesn’t make up for the fact that most revenue is made by having VMs staying local and not having an easy way to migrate them to platforms where smaller margins are the norm.

Going back to the point of this post around the theory that the VM shouldn’t be the base unit in a cross cloud world, I believe that for the sake of the vCAN VMware should be focusing within the VM and the applications that run within them…working towards a truly hybrid scenario whereby Platform and Feature as a Service offerings are managed, configured and operated via the Cross Cloud platform. This will help achieve a sustained revenue stream for IaaS providers that in truth, still represents the best value for money for the vast majority of critical business applications that are in existence today, all while allowing consumers the choice of going out and finding the best “As a Service” offering that specifically suits application requirements.

At the end of the day I do wonder which side of the VMware business wins out…the one that derive their revenue from Enterprise…or the one that derive their revenue from Service Providers. Unfortunately I know where the bigger revenue streams lie and that doesn’t bode well for Service Providers. It’s all about the corporate dollar after all.