CloudU Notebooks is a weekly blog series that explores topics from the CloudU certificate program in bite sized chunks, written by me, Ben Kepes, curator of CloudU.  How-to’s, interviews with industry giants, and the occasional opinion piece are what you can expect to find.  If that’s your cup of tea, you can subscribe here.

The interesting thing about disruption is that when it occur there are both opportunities and threats – opportunities for those who are prepared to stand on he edge of whatever the disruption is, and threats for those unable or unwilling to adapt. As I posted the other day, Cloud Computing is fundamentally changing the shape of the IT job. It’s undeniably disruptive to the IT industry, but this disruption extends beyond simply a threat/opportunity vector for IT, it effects more general roles as well.

Wanted Analytics, a real time business intelligence company, recently posted some statistics round the hiring for cloud computing skills. They found that recruiters, over a 90 day period, posted over 10000 online job ads that included a requirement for cloud computing skills – that’s 61% more than he same period a year ago. The graph below shows this growth.

The interesting thing here though is that these aren’t all in technical roles – there’s  bunch of marketing and sales roles, along with customer service and even cargo and freight agent positions that are all demanding a competency in cloud. It’s kind of analogous to typewriters. It used to be that only people who were looking for jobs in a typing pool needed to know how to type. Nowadays pretty much everyone needs some typing skills as a core competency for their role – so to with cloud skills. That’s our reason for creating the CloudU program, and even more so the CloudU certificate – they’re an attempt to give people an entry level introduction to Cloud Computing, something to whet their appetite and to give them a grounding.

Life is about ongoing skill-building. I’m a big fan of lifelong learning and the great thing about the disruption coming from cloud computing is that it means there is a real impetus to build skills in this particular area, and those skills in turn will make people more valuable to current and prospective employers. Feedback from course participants (and we’ve now had nearly 1500 people sign up for the certificate and going on 300 graduate) is that what we’re doing is on the right track. As recent graduate Melissa Huebener says;

Cloud is the future of technology. This Certification serves a springboard for continuing education in this area. It supplies a wonderful indication to employers that I am willing to learn, change and grow in my career as technology advances forward.

We’re also getting great feedback from other educators. Steve Mallard from the Tennessee Technology Center wrote an unsolicited email thanking us for the program and said that;

CloudU is an excellent resource for anyone wanting to learn about Cloud Computing.   As an instructor of information technology, the certificate provides a great learning tool for the planning, deployment and  logistics behind cloud computing.

And without wanting to blow our own trumpet too much, someone also pointed out to us recently that we’ve been named one of the top 10 Cloud certifications in the industry – that’s pretty awesome praise!

CloudU is an exciting development and one that I’m really proud to be involved with – we’d love to have you join in the discussion!

Drive allows people to store photos, documents and videos on Google’s servers so that they could be accessible from any Web-connected device and allows them to easily share the files with others, these people said. If a person wants to email a video shot from a smartphone, for instance, he can upload it to the Web through the Drive mobile app and email people a link to the video rather than a bulky file.

WSJ’s Drew Dowell has details of Google’s planned cloud storage service, intended to compete with Dropbox. Photo by Justin Sullivan/Getty Images

The Google service, which is expected to launch in the coming weeks or months, will be free for most consumers and businesses. Google will charge a fee to those who want to store a large amount of files, the people familiar with the matter said.

After the announcement, I tweeted a simple enough question, asking the community if this was an indication that DropBox (and other similar filesharing services) will be disrupted by Google. The tweet garnered a bunch of responses, some of which I include below;

Would have to offer more storage for less money and be easier to use. Not an easy task.

I think you over estimate Google’s power.

Depends on Googles policies – if they read/server ads against your stored data may not go over well

i will take the bet. dropbox is going to fuck up other people’s shit, not the other way around.

Dropbox integration ease and ecosystem play is REALLY powerful..

Since so much heat was generated, I though I’d spell out my thoughts, in particular as they relate to DropBox. I’ve posted before about what I see as DropBox’s corporate immaturity, in the face of a real competitor, and one that has a massive existing userbase through its own Application suite, DropBox will have to be smart to maintain momentum.

Some respondents likened GDrive to Google+, the over-hyped and seriously on-the-backfoot social network that Google recently introduced. One commenter took the perspective that since DropBox is primarily used for sharing of files and folders, that the Google+ analogy is the best one to use to predict success. I don’t really buy that, Google apps already offers a social overlay, inasmuch as it needs to in order to enable file and folder sharing – Google Apps has been doing so for years now and is equally easy to use as DropBox in my opinion.

Alex Williams was even more forceful, saying that;

Dropbox is a gem w/ incredible depth. a new kind of technolgy that , Ben, you are very much underestimating.

Alex is an awesome guy, and much of the time I’m happy to defer to his analysis, but I’ve been using DropBox (and competitors SugarSync, Syncplicity, Google Docs etc) for years and I really fail to see this depth that Alex intuits, as for DropBox being a new kind of technology, I don’t see that. It’s an effective front end to cloud storage that has done a great job of making a friendly UI. I don’t see anything really revolutionary in the technology there.

But my bottom line sits outside of the technology. DropBox, over a number of years, has shown itself to be poor at being a disciplined and effective business. They’ve grown amazingly well because of the viral nature of their product and largely because they had first move advantage. Google has the ability to be cheaper, more ubiquitous and has an existing client base that should readily convert to GDrive.

That’s my analysis – watch this space I guess.

MegaUpload, the Patriot Act and Vendor Arrogance

See, I said I was going to be provocative! On the show I raised the issues around MegaUpload and talked about how I saw them as very much the start of an ongoing series of US Federal authorities coming down hard on providers at the behest of the recording industry and Hollywood studios.

Prior to MegaUpload, the general view espoused by vendors was that cloud services were safe overall and that copyright infringement was potentially a risk to individual users connectivity, but not to service providers offerings.

Well the takedown notice on MegaUpload put paid to that contention. So vendors have come out with a response that I have to say smarts of cloudwashing – they’re contrasting the service they provide with that of the less scrupulous service providers. The word “trusted provider” gets thrown around freely. I’m not sure where these vendors get the justification for taking this line – if end users store data with them (as in the case of MegaUpload) and that data is shown to breech copyright (again as in the case of MegaUpload) then there is the risk that these providers too, no matter how much they profess to being a trusted provider, could also face the wrath of the authorities.

I believe that two distinct things need to happen, and soon;

Change the Law

Now I’m no lawyer (but have studied law enough to be dangerous) but it would seem to me that legislation and regulation falls greatly behind the realities of technology. I’d never suggest that MegaUpload is a shining bastion of virtue. But the fact is that honest users had legitimate data stored on MegaUpload servers and the actions of the federal authorities denied those users access to their data. I believe this is untenable and undermines the rights of legitimate individuals and organizations.

Regulations need to mature such that they no longer take such a scattergun approach but rather have the ability to target the specific data that breaches copyright and the specific users who upload that data. Anything else is plain unfair.

Give us Geographic Granularity

Swayed perhaps by the fact that I live outside of the US, I believe that it is simply not viable for cloud vendors (be they infrastructure, platform or software) to provide services where data is located in only one, or a small number of locations. While some would argue that giving users more geographical options fundamentally negates the economy of scale benefits that cloud providers enjoy, I believe that until we offer users highly flexible options around data storage and transfer, that a significant proportion of potential users of cloud services will avoid doing so.

It’s plain arrogant for vendors to pass off this issue as of no consequence or invalid – real customers around the world hold grave fears about the impacts of the Patriot Act and issues around privacy regulations.

What Will Happen?

Some of these issues will be resolved by an increasing demand for cloud services – Amazon’s recent opening of a South American facility, Salesforce building out data centers rapidly and a host of other indicators speak to this point. But my contention is that we need to give natural supply and demand a boost, vendors need to hyper-invest ahead of the supply and demand curve as a strategic move to allay the concerns of users.

At the same time we need to ensure that legislation and regulations truly reflect the realities of the cloudy world we live in and do not allow for a shotgun approach to compliance that primarily meets the needs of just one powerful interest group.

A recent survey published by CouchBase, a NoSQL vendor, gives some clarity to the actual market adoption of NoSQL solutions. CouchBase gathered responses from 1300 individuals or organizations and the majority indicated that the increased flexibility and removal of the requirement for rigid schemas are a pressing driver for NoSQL adoption.

Some key data points from the survey include;

• Nearly half of the respondents indicated they have funded NoSQL projects in the first half of this year
• In companies with more than 250 developers, nearly 70% will fund NoSQL projects over the course of 2012.
• 49% cited rigid schemas as the primary driver for their migration to NoSQL
• 40% overall say that NoSQL is very important or critical to their daily operations

Some interesting use cases or NoSQL came out of the survey, and this speaks to some strong areas of developemtn. Some key use ases respondents were using NoSQL for included;

• Real-time tracking and segmentation of users for ad targeting
• Disaster recovery
• Inventory tracking
• Manufacturing automation
• Insurance underwriting
• Multi-call center operations (with replication of production data)
• Twitter stream analysis

NoSQL really lends itself to some commonly occurring contemporary use cases – it’s going to be interesting to see the relative split between the use of NoSQL and relational databases over time.

One way that Google has maintained simplicity while not missing the features that larger organizations need is by the use of third party tools offering specific functionality. Perhaps best known of these is Cloud Sherpas who have had great success with a bunch of administration functionality for Google Apps in their SherpaTools product. Next up to he plate is BetterCloud who are today launching DomainWatch, a security offering for Google Apps users. Based in New York, BetterCloud is run by David Politis, who previously ran the SMB group for Cloud Sherpas.

The idea of DomainWatch is to give IT the ability to monitor, control and secure end-user access specifically to Google Docs, Sites and Calendars. So what does DmainWatch offer? Specific components that this $8/user/year toolkit offers include;

• Policy Editor and Compliance Analytics: Policy Editor allows admins to specify what’s permitted or not permitted to be shared outside of their domain. DomainWatch monitors domains per admin created policies and flags non-compliant sharing as a violation

• Dashboard: The dashboard provides a single view of how admins share Docs, Sites and Calendars with people both outside and inside of their domain

• Asset Search, Filter, Discover: All domain assets can be searched and filtered along nine dimensions, giving admins a comprehensive view into Docs, Sites and Calendars

• Domain Trends: An automated analysis of all Docs, Sites and Calendars in a domain gives users a complete asset inventory. Multiple domain management allows admins to report and filter by the entire domain or by any sub-domain

• Security Detective: Search for users or groups with whom documents are shared.  For example, admins can discover which Docs, Sites and Calendars are shared with contractors, so admins may remove access at the completion of a project

• Take Immediate Action: Remove a specific sharing mode from a Google Site, remove access to Calendars from an external user, or change ownership of a Docs collection.

There is always tensions between partners building features onto a core product, and what the core product itself will introduce. Much of what Google Apps has offered via third party add ons in the past has since been rolled into the core offering and this is something that BetterCloud needs to be wary of. That said, their proposition is a sound one, and as long as they keep innovating there is a big opportunity for them.

VMware sees this and is today rolling out a tool to help service providers cloud products. the VMware vCloud Integration Manager is a solution that sits in-between the service provider infrastructure and their customer deliver tools (CRM, a web front end etc) to map a customer facing product catalog to the actual provisioning of cloud services.

To clarify, VMware has two distinct classes of service provider using vCloud;

• vCloud data canter providers – abide by a prescriptive architecture and provide a consistent set of core IaaS components. Answering the call for geographically spread enterprises who want to obtain ultimate consistency when using services form disparate vendors
• vCloud powered – service providers who, while using vCloud, do not commit to a specific architectural model but still support the full vCloud API and the Open Virtualization format for portability

Some context around vCloud as a tool that service providers are using to create their own cloud products. VMware claims the following statistics around vCloud;

•3x partners (87) in vCloud Powered vs. Q4 2011 (31)
•7 major players in vCloud Datacenter
•From no clouds 3 years ago to 94 in 19 countries today
•200% VMware revenue growth in 2011 from service providers

Anyway – back to today’s announcement. Graphically the vCIM sits between customer facing/service tools and the vCloud director orchestration platform;

Matthew Lodge, VMware’s director of cloud services, believe vCIM has a compelling proposition;

Service providers are looking to get high-margin cloud services to market as quickly as possible. Until now that involved wrangling manual processes, diverting scarce development resources onto writing glue code and portals, or choosing to implement complex and expensive third-party systems. With VMware vCloud Integration Manager, providers of vCloud services will have the tools they need to automatically provision services, enable reseller partners and speed customer on-boarding.

The key thing that VMware are banking on is the attractiveness to service providers that using a VMware stack brings – they’re banking on service providers being happy to commit to a homogeneous environment and that the environment of choice is likely to be one from VMware. Part of this strategy means that VVMware vSphere, VMware vShield Edge and VMware vCenter Chargeback Manager to automate the provisioning and delivery of infrastructure and associated services. That level of integration starts to get compelling.

Aware that part of the compulsion comes from integration with existing back office systems utilized by service providers, vCloud Integration Manager will provide a REST-based API to integrate various back office systems (CRM, billing, etc.), along with a Web-based administration portal.

The integration manager will be generally available this quarter and priced on a usage-based subscription model.

It seems to me that we’re slowly getting to a point where organizations are no longer doubting the suitability of the Cloud for them, but rather having to make some big decisions about which Cloud vendor to use.

One of the things we’ve talked about a lot over the time we’ve been running the CloudU series is how Cloud Computing tends to democratize technology, meaning that organizations can get a level of IT that they simply wouldn’t have been able to achieve previously.

There’s  flip side to this democratization however in that this high level of accessibility also means that it’s very easy for organizations to set themselves up as vendors – sometimes without the necessary level of professionalism that would be optimal.

More and more than organization are having to perform a thorough due diligence and really assess the quality of prospective vendors. In a previous CloudU report we wrote in depth about what organizations need to think about when planning a move to the Cloud. But recently over on BoxFreeIT, Loryan Smith raised the issue once again. In the piece Loryan rightly pointed out that;

anyone can run an email and file server from their garage and call it a cloud service. The problem is that Bob’s Garage Cloud Co. doesn’t have all the key technical and business components in place to provide organizations with a business-class service.

So here’s a very quick checklist of things that organizations should be aware of or think about when moving to the Cloud;

• Have a process for deciding which applications or workloads are candidates for Cloud
• Think about service requirements in terms of security, compliance and performance
• Consider issues around migrating existing workloads
• Think about the economic factors – what to do about existing sunk costs
• Accurately think about the potential demand curve to assess the economic impacts of a move to the Cloud
• Consider issues relating to vendor lock-in
• Make sure any prospective vendor is sufficiently flexible to meet your needs
• Think about the changing scope of needs within your IT department
• Consider the management challenges that the move might introduce – things like dealing with objections and employee retraining

While we believe that Cloud is the way of the future for IT, we are adamant that organizations need to think long and hard about what the move to the Cloud and how that move occurs – one valuable resource for discussing the challenges and opportunities is he CloudU LinkedIn group, we’d love to see you over there!

Apart from being an arrogant attitude it’s also a seriously bad business strategy – the bulk of technology consumers live outside of the US, the bulk of consumers do not speak English as a first language and the bulk of the really exciting emerging markets (meaning the BRIC nations) to a one converse in languages other than English.

So given his personal peeve of mine I as stoked to hear from Ryan Nichols from Podio (more on them here) that this small start up has already moved to offer their application in seven languages (Brazilian Portuguese, Spanish, German, French, Italian, Danish and English).

They’ve also rolled out all these languages not only on their web application, but on their mobile (iOS and Android) apps too. Podio is a living breathing international company – they have employees from 14 different countries spread cross their two offices (in Denmark and the US), and they boast of users in 170 countries – given that fact, multi lingual is a no-brainer.

Awesome to see a little company innovating fast and seeing the world as borderless. Now to get those big vendors to do likewise…

$20M Raised from Existing Shareholders

Existing shareholders have reinvested to the aggregate tune of $20M. Sam Morgan, Sam Knowles, Craig Winkler and Peter Thiel’s fund Valar Ventures have all taken part in the round. This is interesting as I was picking a major investment from a US based fund. While admittedly Valar is US based, I am a little surprised at the modest quantum and the Australasian focus of this round. CEO Rod Drury has spent some time recently talking with VC funds in the US and I would have expected a much larger round from an assortment of US funds. I see two possibilities – first that this $20M is an interim step to fund growth in US prior to a major round for a mass US attack. Secondly there is the possibility that Xero has made a strategic decision to keep a modest pace to their US operations (growing, but not seeking meteoric growth), if this is the case the $20M will see them able to deliver this growth.

At the same time Xero is offering a shareholder purchase plan to existing Xero shareholders under the same terms as the new round – namely $2.75 per share (a slight discount on what they are trading at currently). This will appease any existing shareholders concerns around dilution and shareholder equality.

Acquisition of WorkFlowMax Completed

18 months ago Xero made a strategic investment in what was then project management vendor WorkFlowMax. This investment was in my assessment a reaction to the announcement of a tight partnership between Xero competitor Saasu and former Xero partner Acclipse (the deal came less than a month after the Saasu/Acclipse hookup was announced). Xero has long told the story of the modern practice which sees client side and practice side operations occurring over a common ledger. In order to delvier on this vision, Xero needed a strong practice management offering and with Acclipse having gone elsewhere, Xero had to run fast to find this. While WorkFlowMax wasn’t primarily about practice management per se, they have since built out sufficient functionality to deliver upon this single ledge vision.

Xero made the decision that since the single ledger is central to their strategy, full ownership of WorkFlowMax was critical and hence has acquired the company for $2M in cash and $4M in shares.

I’m surprised that Xero has made the full acquisition, my earlier view was that the strategic investment gave them enough control over WorkFlowMax to achieve their aims, obviously having a separate entity didn’t sit comfortably with the Xero board and the benefits of bringing it in house with total control were worth the cost of acquisition.

It’s fair to say that, in Australasia at least, accounting practices are in a state of flux, unwilling to pay for a practice management solution that is growing ever less functional (when compared with modern approaches). Xero aren’t alone in trying to capture this latent demand, Acclipse is also doing well with its iFirm product – it’ll be interesting to see how the two of them grow.

Disclosure – I am involved in an initiative, LiveMigrate, that aids end users and practices moving from varying accoutning solutions. Our initial product being launched at Xerocon is an MYOB to Xero conversion service.

Excuse the slightly cataclysmic title of this post, but the first post for 2012 in the CloudU notebook series is one which hopefully will get you thinking about your career and the changes it is going to undergo over the years to come.

One of the drivers for the CloudU program, and especially the CloudU certificate, was an attempt to give traditional IT folks an entry level introduction to Cloud Computing, something to whet their appetite and to give them a grounding, before offering up other, more specific learnings.

Of course our rationale for doing this is the thesis that the job market is fundamentally changing and that Cloud Computing is a major driver for this. It was good then to read the other day a Forbes article by Joe McKendrick that spells this fact out clearly. McKendrick pulls no punches saying that;

Just as cloud computing is a game-changer for many companies, it is also changing the nature of jobs – not only within the information technology department, but in other parts of the enterprise as well.

Interestingly McKendick goes on to discuss some empirical data that speaks to the real change that IT roles are seeing. In particular he references a study from CA technologies which found that;

A majority of 685 CIOs surveyed, 54%, believe that cloud computing has enabled them to spend more time on business strategy and innovation. Approximately 71% who have adopted cloud computing see their position as  a viable path to pursue other management roles, compared to only 44% of non-cloud adopting CIOs.

In other words, it’s precisely the CIOs who have adopted Cloud who are feeling empowered to move into broader management roles, while their more laggardly colleagues remain technically focused.

None of this should come as a surprise to CloudU participants – we’ve always said that management for the new IT is a totally different beast than in the old world. Whereas traditional IT leaders had to remain abreast of technology paradigms and ensure that their departments cut clean code, maintained pristine data centers and had their fingers on the pulse of software updates, a modern CIO has to think about more broad business skills like;

• Vendor relationships
• Rapidly accelerating technology innovations
• Strategic business skills
• Managing and maintaining a workforce when there is a limited talent pool

Now before people get up in arms pointing out that traditional CIOs have to manage these roles, let me say that I accept that fact. But I also contend that the rate of change, and the amount of time that a CIO has to spend on business as opposed to technical issues is far greater under Cloud Computing. And the statistics, at least from the CA report, would seem to back this up. Cloud adopting CIOs feel more confident with strategic, business-related functions within their role than do their traditional counterparts.

It’s also interesting to see other industry folks speak to the same themes – Chuck Hollis, VP at EMC summed up the challenge for IT leaders when he said that;

If you’re an IT leader, you’ve got an interesting challenge on your hands. You most likely don’t have the right portfolio of end-state roles, skills and processes. And you are probably lacking the people with skills who can lead the change from present state to future state.

In other words – we’re here now, and we kind of know we want to be someplace else pretty soon, but we just don’t know how to get from A to B. We just don’t have the people who can take us on that journey. Or our own people maybe could but they simply “don’t know what they don’t know”.

That’s what CloudU is all about – whether your preference is for whitepapers you can print out and ruminate over. Whether it’s for a certificate you can print out and point to in your resume. Whether it’s simply for a community where you can discuss the challenges you’re going through – CloudU aims to fulfill your needs.

So the Cloud is definitely changing your job – what are you planning on doing in 2012 about it?