Wednesday, October 27, 2010

HP's Managed Paths to Private Clouds Provide Swifter Adoption at Lower Risk for More Enterprises

Transcript of a sponsored BriefingsDirect podcast on the role of effective management in moving enterprise applications to the cloud.

Listen to the podcast. Find it on iTunes/iPod and Download the transcript. Sponsor: HP.

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you're listening to BriefingsDirect. Today, we present a sponsored podcast discussion on finding low-risk, high-reward paths to cloud computing.

Businesses are looking to cloud-computing models to foster agility and improve time-to-market for new services. But attaining cloud benefits can founder without higher levels of unified server, data, network, storage, and applications management.

These typically disparate forms of management must now come together in new ways to mutually support a variety of different cloud approaches -- public, private, and hybrid. Without adoption of such Business Service Automation (BSA) capabilities, those deploying applications on private and hybrid clouds will almost certainly encounter increased complexity, higher risk, and stubborn cost structures.

Using increased automation and proven reference models for cloud management -- and by breaking down traditional IT management silos -- the progression toward cloud benefits will come more quickly, at lower total cost, and with an ability to rapidly scale to even more applications and data.

We're here with two executives from HP Software & Solutions to learn more about what BSA is and why it's proving essential to managed and productive cloud computing adoption.

Please join me now in welcoming our guests, Mark Shoemaker, Executive Program Manager for Cloud Computing in the Software & Solutions Group at HP. Welcome Mark. [Read an exclusive interview with Shoemaker.]

Mark Shoemaker: How are you Dana? Great to talk to you again.

Gardner: Good to be with you, too. We are also here with Venkat Devraj, Chief Technology Officer for Application Automation, also in HP’s Software & Solutions Group. Welcome, Venkat.

Venkat Devraj: Thank you, Dana. Good to speak with both of you.

Gardner: Mark, I know you've been out and about talking with a lot of folks about cloud computing. It's a really hot topic around the world nowadays. What is driving the latest wave of demand and interest in cloud? What has people really excited?

Shoemaker: There are several things, Dana, and it certainly is an exciting time for us. There is hardly a place we go that we don’t end up talking to our customers about cloud.

Universally, it's the same things that have been driving a lot of the work that IT has been doing over the last few years. They want to improve their productivity, definitely get better utilization out of what they have already got. They want to be your better partner in the business. What that means is to shorten the time that the business has to wait for the services. It's all of those things, and there’s a lot to do to get there.

Gardner: Now, we have talked about these different models, even software as a service (SaaS), thrown in there from time to time. Is there any particular type of cloud approach that you see as the first step or the early path to more types of cloud?

The private cloud

Shoemaker: Most of the enterprise customers we talk to are looking at private cloud, the internal cloud solution that they own, that they then provide to their business partners, whether that’s the development teams or other elements in their business. So, that’s the first step. Most of them are looking to build on the virtualization work that they've already done.

Devraj: Mark is absolutely right. Coupled with that intention that IT has, there is also an interesting micro trend that’s occurring. A lot of the application teams, end-user business teams, are getting increasingly sophisticated. They're learning about private cloud implementations. They're privy to the same articles and magazines that IT is reading these days. Consequently, they're demanding levels of service from IT that are difficult to provide without a private cloud.

For example, because of things like agile development methodologies, application teams are doing a lot more application deployments and code releases than ever before. It's not uncommon to see dozens of application releases for different applications happening during the same day.

IT operations are just bombarded with these requirements, and requests, and they are just unable to keep up based on yesterday’s processes, which are relatively static. A lot of these processes are based on standards like ITIL and they have a certain level of static nature to them. They are there for stability and predictability and they're not evolving to accommodate the kind of dynamism that’s expected from IT ops.

Unfortunately, or fortunately, these application teams and business unit teams are quite influential. They're even willing to fund specific initiatives to allow their teams to work in self-service mode, and IT ops are finding themselves in reactive mode. They have to support them, make their internal processes more fluid and dynamic, and leveraging technology that allows that kind of dynamism.

IT really has to get in front of this. They have to manage all this.

Gardner: So, Mark, it sounds as if cloud isn’t just a new way of doing computing, it's really changing the way IT is defined.

Shoemaker: Absolutely. Just to add to Venkat’s comment, we're seeing the business driving IT and demanding that agility and that flexibility. We talk to a lot of our customers, where their own coworkers have taken corporate credit cards and gone out into the public cloud, procured space, and have begun developing outside of them. IT really has to get in front of this. They have to manage all this.

Gardner: One of the things that’s been interesting for me in watching this unfold is how, not that long ago, IT only had to compete with its past record. As long as they were showing improvements, riding Moore's Law, getting higher productivity, then everyone was pretty satisfied. Now, the competition for IT is not necessarily against its past track record, but they are competing against these other cloud providers, whether it's for platform as a service (PaaS) or spinning off into actual deployment.

Back to you, Venkat. IT really can't sit around and wait. They're now under the gun to accelerate the way in which they go about change in terms of a private cloud type of a development and deployment capability.

Devraj: That’s right. It's easy to say that, though, because when you look at this picture a little more closely, you find that the third-party companies, the cloud providers, the pure-play server enablers, have an unfair advantage. Because they were started relatively recently, in the last few years, they have the advantage of standardized platforms and delivery units.

A lot to deliver

They can say, "Okay, I'm going to deliver only Linux-based platforms, Windows-based platforms, or certain applications." When you look at the typical enterprise today, IT has a lot more to deliver. There is a lot of prevailing heterogeneity in terms of multiple software platforms and versions. There is a lack of standardization. It's very difficult to talk about cloud and delivery within the enterprise in the same breath, when you look at these kinds of technical challenges.

As a result, IT is undergoing a lot of pressure -- but they have to deliver given the kind of challenges that they face. That’s going to require a lot of education and access to the right kind of technology, training, and guidance. That’s where HP really comes into help.

Gardner: So this pressure on IT now can't necessarily lead them to leap before they look. This is still something they need to do with a great deal of planning and foresight. The governance needs to be in place.

Mark, tell me about what needs to come together in order for IT internally to progress toward cloud models, but at low risk, and perhaps transform the way they manage things, so that the services can be created swiftly, but without it being some sort of complexity at the same time.

Shoemaker: The one thing that’s different about cloud is that it really is a supply chain. It’s the supply chain of IT technology that the business consumes. If you think about what a supply chain is, it’s something that’s got to be repeatable. As you said, it has to be governed, to some extent, and it provides a baseline or foundation and building blocks to build those services that you can then customize on top of the business.

So, the farther up that you can go with your standard building blocks, the less difficult it is to manage and focus on the custom business-facing functions on the front-end.

So, the farther up that you can go with your standard building blocks, the less difficult it is to manage and focus on the custom business-facing functions on the front-end.

To do this, cloud has helped us out in a lot of ways. One of the challenges IT has always had is to get the business to consume standards. Because of a lot of hype in the market, the business absolutely is convinced that they get it and they want the business benefits that cloud offers.

To consume that, as you said, you have to start with standards. I'd wager that the majority of technology inside of most of our data centers, as much as 70 percent, is the same every time. It's the same hardware, a lot of the same software, and a lot of the same application packages.

You have to look at your total footprint and understand what those common elements are and then start building those inside the cloud catalog or the inventory of what would be consumed inside of the cloud. These can be OS images with applications, common applications, like SQL Server or Apache Web Server, that then get loaded into the service catalog. That’s what the developers or whoever the users are going to be get to select.

So, you control the base building blocks, and then they get consumed and can be developed on top of. Does that make sense?

Gardner: It does. It sounds like it's really something that’s aligned with these multiple clouds and sourcing options as well, whether it's hybrid, private, public, because if things align with that service catalog, regardless of where the services originate, there is that opportunity to leverage them, but in some sort of a managed fashion.

Shoemaker: You're right. One of the things you can't overlook is the fact that the business is the same. We want cloud, and IT is not ready for it. Even if the business decides to go to a public cloud, they still have to consume those elements in a standard fashion. There's no way out of that.

Doesn't work like that

We got kind of spoiled with virtualization, because there is that big physical-to-virtual (P2V) button, where you could take a physical server and basically pull it into a virtual image on another physical server. The cloud doesn’t work like that. There is no P2V button inside a cloud. Cloud has to be manageable, and to do that, you have to be able to set some standards and get those building blocks together to be offered.

Devraj: One of the things I see, to add to Mark’s point, is that a lot of CIOs look at the standardization part as something they need to solve before they embark on the cloud journey. That's one way of doing it. Definitely, you try to get some standardization in place, applying the 70/30 rule, as Mark alluded to.

But, it is also important to remember that the cloud requires a different set of dynamics, a lot more pragmatic approach, wherein CIOs need to look at standardization as a process that they undertake as part of the journey towards the cloud, rather than trying to do it all upfront.

If they take one of their mission-critical applications, that's a natural starting point. They look at, does this meet the requirement of being able to deliver value within a certain amount of time? Does it meet the requirement of being very close to the business users, being in high demand, and a lot of IT work goes into maintaining and managing that application stack. If that’s the right candidate for moving to the cloud, then they have to decide how do they do that? Having P2V like capabilities is one option.

It is also important to remember that the cloud requires a different set of dynamics, a lot more pragmatic approach.

The other option is that there are lots of application modernization capabilities that HP and Stratavia have brought to the table. One of the examples that I'd like to talk about is a lift-and-shift capability, where you can take a composite application running on a legacy environment like Sybase, for example. Let's say that Sybase is not part of the cloud implementation. They can choose to have that Sybase database converted in a fairly lights-out manner to a SQL Server or an Oracle environment and then launch it into the cloud.

So, there is a little bit of standardization as part of the journey towards the cloud that IT managers and stakeholders need to look at.

Gardner: You mentioned Stratavia, and for the benefit of our listeners, HP has now acquired Stratavia, and there was also quite a bit of product and service news on Sept. 15 around BSA.

Mark, why don’t you give us a recap, before we delve a little bit more into this methodology, and the crawl, walk, run approach to this that Venkat is getting at. Let's get into the news and then come to that strategic and technical discussion.

Shoemaker: Several things have happened in the last 60 days. Obviously, we had VMworld and we presented a cohesive strategy for infrastructure and even PaaS built on the BladeSystem Matrix hardware platform that we have, Converged Infrastructure. We've combined that with two other pieces and a piece of Cloud Service Automation (CSA) software.

The other pieces, and it goes back to what Venkat is talking about as the how-to, is a thing we call CloudStart, which is a consulting and a professional services-led engagement, where we come in and work with the customer to get that transformation process nailed, so we can quickly get them moving into the cloud benefits.

On the back end of that, there is another piece that we announced called Cloud Maps, which is really more knowledge, but in a different capacity, in that it offers downloadable templates, preconfigured applications, and best practices for sizing.

Cloud is a solution

As you said, if you had an application that you wanted to shift, or lift and shift to cloud, it's our best practices about sizing and other things around common applications like Outlook, SAP, and some others, that we are constantly adding to. We see the Stratavia acquisition fueling that fire, because in the end, cloud is a solution, and a solution needs content, and content wins. Content is what the customer is able to consume and use day one, when the solution is in. So it's important. We've done a lot there.

Obviously, the Stratavia acquisition was a huge, huge win for us, and puts us in a great position to help our customers transform their infrastructure.

Gardner: Mark, you painted a big picture of where these announcements go, but what are some of the constituent parts?

Shoemaker: We've been really busy over the last two months. We've had significant announcements at VMworld around the BladeSystem Matrix, where we have now got Converged Infrastructure and we have embedded the CSA software inside of it, combined that with the best practices on the front-end, and what you need to get up and running, and then the templates and the quick start pieces on the back-end, to really let you establish a cloud offering quickly.

But, all that sits on a recently refreshed BSA portfolio, with significant enhancements and new capabilities across network, automations, servers, and storage, that really makes all this happen. It's really the brains and the heavy lifting of what goes on to manage infrastructure, whether it's in a cloud or not.

On top of that, we've got a best-in-class content provider in Stratavia that’s come on board to help round out the capabilities and add more into what the customer can get out of our solutions in very quick order.

All that sits on a recently refreshed BSA portfolio, with significant enhancements and new capabilities across network, automations, servers, and storage, that really makes all this happen.

Gardner: Let's delve into that a bit. Venkat, you've come to HP Software & Solutions from Stratavia. Tell me about Stratavia and what it brings to the table in terms of this larger equation that Mark just described in terms of a progression towards cloud?

Devraj: Sure, Dana. As Mark mentioned, HP already has a very comprehensive set of technology platforms within BSA, as well as consulting capacity and educational prowess. However, the gap that existed was around specific domain knowledge and out-of-the-box content to manage specific composite application software stacks within the cloud.

These include being able to enable provisioning config management of heterogeneous database and middleware products, doing things such as code releases, performing maintenance work, and other functions around these stacks, in self-service and lights-out mode.

At Stratavia, that was precisely the area of focus. We had built a patented technology to manage and control varied software stacks, such as databases, web servers, application servers, and even well-known packaged applications, including Microsoft Exchange, Oracle E-Business Suite, and SAP.

The software used by these enterprises, which are common customers for both Stratavia and HP, tends to be disparate, heterogeneous, and requires a lot of domain knowledge to be able to manage, resulting in significant delays and bottlenecks associated with service delivery. Those processes just don’t scale in the cloud.

Different platforms

For example, just at the database layer, within the enterprise, it's very common to see four or five different platforms in use, such as DB2, SQL Server, Oracle, and so on. By automating the operations management lifecycle around these layers, Stratavia made it possible for the enterprise to deliver and manage these assets as a service within the context of the cloud. As more and more of HP’s and Stratavia’s joint customers started seeing value in that capability, HP brought Stratavia into its BSA/Business Technology Optimization umbrella.

Gardner: Mark, let's pull this back into this notion of being able to get to cloud quickly. IT is under pressure, and there are new kinds of competition, even competing against other companies that have had more of a greenfield approach. A startup might be able to get into cloud benefits much sooner, so there is another element of competition there.

But, to attain these cloud values without risk what is it about the announcements on the 15th that you think really is sort of the lynchpin to that? I am thinking that CloudStart, being able to manage as a service, coupled with whatever you have got on premises is part of that, but I would like to hear what your thoughts are.

Shoemaker: It's really about taking our experience, dealing with numerous customers in this area, and being able to apply into your IT. So we give them a running start at cloud, rather than trying to figure out everything.

Face it, a lot of the CIOs are looking at a data center that’s packed full of applications that they probably don’t feel as if they have got a good handle on. Now, cloud is coming into the picture, and they've got two things to do here. Number one, they need to start applying those new business methodologies to IT around providing cloud and the things that go with that, but also they have got a transformation piece to go along. And that can be very daunting.

We can quickly take the customer through the book of our experiences and best practices, help them get that plan, start that transformation, and look at the applications that can be pulled over, what needs to be modernized or what needs to be standardized.

What we've done is looked at the experience of helping previous customers do that work and we have applied that into the CloudStart and Cloud Maps, CloudStart being the planning and the upfront work that you need to get done.

So, we're right there with you. You don’t have to read chapter one of the book.

Then, as we put the infrastructure in with CSA for Matrix in the frame, we're embedding some of the CSA software inside of the Blade Matrix frame. So, you've got a way to build infrastructure as a service (IaaS) and manage it through the platform throughout the lifecycle.

Then, on the back end of that, we've got the preconfigured application templates. If I need a SQL Server image to put into the system, I can pull that from Cloud Maps, build it into a framework and offer that very quickly. I don’t have to go and figure out how to size for this piece or what golden template looks like for this application.

It's really about a running start into the cloud, and one that’s not going to leave you wanting in a year or two. You have to be careful. Cloud is a great enablement technology and a lot of people are looking at IaaS, but that’s the starting point for it, and then you have to manage everything that you put inside of that as well.

Gardner: Venkat, a similar question to you. What do you feel is the most important aspect or lynchpin to being able to get to cloud fast, but without it spinning out of control and/or being able to scale, if in fact you are successful?

Key areas

Devraj: There are a couple of things that become key areas. Number one, you have to be able to integrate with an existing ecosystem within the enterprise.

Companies have already spent millions and millions of dollars over the last several years on things like monitoring systems, ticketing systems, metering systems, and service catalogs. So the technology that they adopt for the cloud cannot be a radical redefinition of these existing assets. They have to be able to leverage these assets, where it makes sense, and tie them all together.

Number two, the new value that the cloud brings in comes in through out-of-the-box content. The out-of-the-box content needs to be able to manage and control all the layers of the cloud stack. The one thing that the cloud doesn’t change dramatically is that in order to deliver IT services, you still have to do it with network, storage, servers, databases, web servers, and application servers.

These are the fundamental building blocks and they have to be brought together using out-of-the-box content, automation content, as well as doing it in a manner where the application language is presented through a service catalog to the end users. The application that drives the business has to be the de-facto delivery unit for the cloud.

So both the out-of-the-box content and integration are the two main lynchpin areas in my opinion.

The whole content that I talk about becomes an abstraction layer, where the customer, the end user, the people who consume the services, see a very easy to understand service catalog.

Gardner: I guess it gives you that opportunity to keep the plane flying while changing the wings, as it were. So, you can go to a cloud model but you are really using the same technologies and assets, you are just perhaps abstracting them a little bit.

Devraj: Precisely. The whole content that I talk about becomes an abstraction layer, where the customer, the end user, the people who consume the services, see a very easy to understand service catalog. They can click on it. They can choose some menu options, some values from a drop-down box, and then specify exactly what they need, and have the response come back in minutes and in hours, rather than days and weeks, as is traditionally the case.

Gardner: Mark, as Executive Program Manager for Cloud, you've been traveling around the world quite a bit. We're talking about this in sort of a theoretical mode, but how about on the street? Are there folks who are doing this now? What are their experiences? What sort of paybacks are they getting, and is the business noticing?

Shoemaker: There's good news on all those fronts. Yes, we're talking with and helping a lot of our customers start to move into the cloud and move down that path.

I'll be honest with you. A lot of people we talk to are looking at drawing that line in the sand and creating those new standard services that the business can start to consume, but there are a couple of things.

Number one, it buys them some breathing room. The business is putting pressure on them to move into the cloud. The second part is that it lets them get experience on how things work and how they are going to work inside the cloud, because then it lets them go back, look at their legacy infrastructure and application portfolio, and try to figure out how that’s going to transform over time.

Some things will stay

We've talked about it in previous conversations. Everything doesn’t move into the cloud. Some things are going to stay in the physical elements. Some things will stay virtual, things that you've already virtualized and that you really can't standardize.

Then you've got cloud. As Venkat said, everything from the physical, all the way up to the application, whether it's in the physical infrastructure or the virtual or the cloud, still has to be managed, every element that you perform today. Compliance, patching, all of the service level management, being able to barebones provision servers, all of that is still going to occur in the data center, and we really have to pay attention.

Taking that first step, creating those new services, and building on those for the new applications that come in does a good job of pulling the rest of it, and lets the IT organization become more familiar with what it takes and raises their success ratio.

Gardner: Venkat, a similar question to you. For those folks who have already been progressing in this direction, doing this the proper way, what are some of the paybacks that they get and how well does both IT and the business benefit?

Devraj: One of the things I am seeing, Dana, is that there is a lot of qualitative analysis being done in this area. A lot of the customers that I work with are not sure yet what the baseline is for success in the cloud, given the newness of it and the rapidly changing definition of the cloud. So, not a lot of people are able to have publishable metrics that they can stand behind and say that this is the value that they've got.

In data warehousing, there is a saying that data never lies. That is true with cloud deployments as well.

A lot of them are in a wait and watch, or pilot, mode, and they're doing what I call a micro-cloud implementation, wherein they take a subset of their environment and do a pilot around a cloud deployment.

This is the data point that we're seeing. Of course there is a lot more maturity in some retail environments, for example, financial services, banking, insurance, etc., but a lot of it is wait and watch and there is a lot of qualitative stuff that’s going around. I'd love to see them apply some financial discipline and get some quantitative data around it, based on things like their ticketing system.

In data warehousing, there is a saying that data never lies. That is true with cloud deployments as well. Enterprises already have a wealth of data in their ticketing system, their incident management systems, and their change management systems, regarding which applications and environments are consuming the most IT admin time, which are violating the service level requirements of end user business teams the most, and which require the most caring and feeding.

One school of thought that will help them enable more quantitative analysis and measuring ROI would be to start the deployment with an application that offers the biggest bang for the buck.

They could start reviewing and mining their ticketing system data and choose the environment that cost the most to deploy and manage and maintain and has the toughest problems related to service level agreements (SLAs) and get those guys into the cloud.

Another school of thought is all about being risk averse and safe. Start with your least strategic system and get that into that cloud. If that works, fine. Then, you can start going to better, bigger, and harder to solve problems.

Either way the data is there

Either way, whichever is the approach that companies can adopt, the data is already is there in the ticketing systems and incident and change management systems. What is required is some level of guidance and education for these companies to start tracking this data and approaching this problem in a quantitative and easy-to-measure approach. Then, we should start seeing a lot more success stories that come out of the market.

Gardner: That, of course, will build on itself, and we'll see adoption patterns emerge. We look forward to charting that along the way.

Mark, how do folks get started? Any thoughts about where some resources are, how to educate yourself and to recognize that this is comprehensive? This isn't necessarily a piece that you plug in. You really have to think about the strategic and holistic view of doing this?

Shoemaker: This is similar to a lot of the things we have been talking about for the last few years. Cloud is an evolutionary process for IT. We've been talking about service-oriented architecture (SOA) and we have been talking a lot to our customers about data center automation over the last few years. Cloud just builds on that.

A lot of the different methods, no matter what they are, are what we already know inside of IT, and are what HP has been helping customers with. We've got significant experience and significant mindshare in workshops that we can help with. From the point of view where, "I don’t know what cloud is, but I know I need to do something," we've got one-day workshops that can come in and help educate.

You have to make sure you put in place a closed-loop process that’s going to allow you to be successful without all those hands in the middle of it, because you're not going to be able to keep up with it.

We've got longer engagements that come in and work with our customers to look at their processes and their level of maturity, along with the complexity in their applications, and help them build a set of steps that help them move into cloud.

Certainly, with what we've announced, with IaaS, with our rich legacy of data center automation, which really is what CSA is built on, we have got a history of providing ROI for customers around this. Cloud builds on that, but adds some challenges. There are a lot fewer human hands in the middle of it. Cloud’s whole purpose is to run on its own.

You have to make sure you put in place a closed-loop process that’s going to allow you to be successful without all those hands in the middle of it, because you're not going to be able to keep up with it. Plus, the customer is your actuation point. They push the button to get this thing going.

Leveraging the experience that we have, a great investment and the series of workshops we work with our customers on, being able to pull in the Converged Infrastructure offering, the transformation technology that we have, applying the cloud experience, and now bringing in the content maturity that Stratavia brings to the table for us, really just makes this a one-stop shop for what you need to do to transform.

Gardner: Venkat, last word to you. Given that automation is such a big part of this, what would you say is sort of an important stepping stone or a bridge to being automated in this and not stumbling in terms of sprawl or complexity? So, the question is how to be mindful about automation, as you progress towards these cloud values?

Devraj: The key thing to be mindful of is, what are the admins doing today that makes the environment run like clockwork. If you look at most IT enterprises, most of the people working there are very hardworking. They do a lot of good things. They do a lot of right things. And, they do that because of a lot of tribal knowledge that they have in their heads.

So, when you approach automation, one has to be very cognizant of the value that these people bring to the table. There is a level of education that’s required that tells them not to be threatened. It's not about job loss when automation comes in, but it's about job improvement.

Big gap

When you talk about improvement, there's a big gap in IT today, which is IT/Ops Engineering or IT/Ops Architecture. That’s a big missing silo within IT/Ops. And lot of the operators today that rely on scripts, command-line stuff, and point-and-click tools need to evolve themselves to more of an architect approach. They need more of taking stock of the big picture, and taking the tribal knowledge that they have in their heads and looking at the out-of-the-box content that HP provides and selecting the right content that corresponds to their tribal knowledge.

When they go into the cloud, the underlying management, things like compliance and governance, are not out of whack. They're able to successfully take that knowledge, put it in there, and then, in their new role as architects or engineering folks, they're able to watch, measure, and make modifications as appropriate.

So, the role that people play, that key subject matter experts play, is very crucial as part of walking before running with automation.

Gardner: Very good. We've been discussing finding the path to low-risk, but high-reward cloud-computing adoption. We have been enjoying the thoughts and leadership from HP’s Software & Solutions Group. I want to thank our panelists, Mark Shoemaker, Executive Program Manager for Cloud Computing at the Software & Solutions Group at HP. Thank you, Mark.

Shoemaker: Great, Dana. Thanks so much. I appreciate your time.

Gardner: And also Venkat Devraj, Chief Technology Officer for Application Automation at HP Software & Solutions. Thank you so much.

Devraj: Dana, Mark, thank you very much. I enjoyed the discussion.

Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. You've been listening to a sponsored BriefingsDirect podcast. Thanks for listening, and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Download the transcript. Sponsor: HP.

Transcript of a sponsored BriefingsDirect podcast on the role of effective management in moving enterprise applications to the cloud. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

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Monday, October 25, 2010

FuseSource Gains New Autonomy to Focus on OSS Infrastructure Model, Apache Community Innovation, Cloud Opportunities

Transcript of a sponsored podcast discussion on the status and direction of FuseSource, which is being given its own corporate identity today by Progress Software.

Listen to the podcast. Find it on iTunes/iPod and Download the transcript. Sponsor: FuseSource.

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you're listening to BriefingsDirect.

Today, we present a sponsored podcast discussion on the rapid growth, increased relevance, and new market direction for major open source middleware and integration software under the Apache license.

We'll learn how the FUSE family of software is now under the FuseSource name and has gained new autonomy as its own corporate identity. We'll also look at where FuseSource projects are headed in the near future. [NOTE: Larry Alston also recently joined FuseSource as president.]

Part of the IONA Technologies acquisition by Progress Software in 2008, FuseSource has now become its own company, owned by Progress, but now more autonomous, to aggressively pursue its open source business model and to leverage the community development process strengths.

Even as the IT mega vendors are consolidating more elements of IT infrastructure, and in some cases, buying up open-source projects and companies, the role and power of open source for enterprise and service providers alike has never been more popular or successful. Virtualization, cloud computing, mobile computing, and services orientation are all supporting more interest and increased mainstream use of open-source infrastructure.

Please join me in welcoming ours guests. We're here now to discuss how FuseSource is evolving to meet the need for open source infrastructure with Debbie Moynihan, Director of Marketing for FuseSource. Welcome to the show, Debbie.

Debbie Moynihan: Hi, Dana. Thank you. It's great to be here.

Gardner: We're also here with Rob Davies, Director of Engineering for FuseSource. Welcome to the show, Rob.

Rob Davies: Hi, Dana. Good to speak to you today.

Gardner: Debbie, tell me about some of the trends. As I said, we're seeing some of the most aggressive use of open source and IT infrastructure. We're seeing great success in terms of total cost, efficiency, and agility. Why is that happening now, and where do you see the demand trends headed to in the next several years?

Cost reduction

Moynihan: As we all know, over the past couple of years, there has been a lot of focus on cost reduction, and that resulted in a lot of people looking at open source who maybe wouldn’t have looked at open source in the past.

The other thing that’s really happened with open source is that some of the early adopters -- we have had customers for many years -- started out with a single project and now has standardized on FuseSource products across the entire organizations. So there are many more proof-points of large global organizations rolling out open source in mission-critical production environments. Those two factors have driven a lot of people to think about open source and start adopting open source over the past couple of years.

Then, the whole cloud trend came along. When you think about scaling in the cloud, open source is perfect for that. You don’t have to think about the licensing cost as you scale up. So, there are a lot of trends that have been happening and that have really been really helpful. We're very happy about them helping push open source into the mainstream.

From a FuseSource perspective, we've been seeing over 100 percent growth each year in our business, and that’s part of the reason for some of the things we're going to talk about today.

Gardner: How about the popularity of the Apache license? We see controversy, in some cases, a lack of clarity and understanding about where some other licenses are going, but Apache seems to be pretty solid and pretty accepted.

Moynihan: We really like the Apache license. There's a lot of confusion around open source licensing. There are many different licenses. There is a lot of fine print. A lot of people don’t want to think about it, and a lot of legal departments get concerned about the gray areas. The Apache license is very easy to understand and it's very permissive in what you can do with software that’s licensed under the Apache license.

Essentially, you can make any modifications you want to the software and you don’t necessarily have to contribute back to the community. It's nice, if you can contribute back, but from a business perspective, if you want to use any of the components, it's what's considered a non-viral license. So, you're pretty free to do what you want, as long as you give credit back to those who wrote the initial code.

Gardner: Rob, we've seen a lot of popularity for open source in operating systems -- server operating systems, in particular -- but why has the use of open source for infrastructure, say for integration and middleware, become so popular? Why do you think that’s going to continue with such things as cloud?

Davies: There has been a trend over the last few years, and Debbie alluded to this, with companies looking to open source and kicking the tires around. In fact, I recently spoke to a large customer of ours in the telco space. They had this remit. Any open source that came in, they wouldn’t put into mission-critical situations, until they kicked the tires for a good while -- at least a couple of years.

Because there has been this push for more open source projects following open standards, people are now more willing to have a go using open source software.

Snowball effect

We've been around in this space for a while, but the earlier adopters who were just trying out in distinct groups are now rolling this out into broader production. Because of that, there is this snowball effect. People see that larger organizations are actually using open source for their infrastructure and their integration. That gives them more confidence to do the same.

In fact, if you look at the numbers of some of our larger customers, they are using Apache ServiceMix and Apache ActiveMQ to support many thousands of business transactions, and this is business-critical stuff. That alone is enough to give people more confidence that open source is the right way to go.

Gardner: Debbie, tell us a little bit about the FuseSource move toward more autonomy. This clearly is an opportunity, but it’s a different opportunity than a purely commercial license and software model. Tell us what’s going on with Progress Software and FuseSource.

Moynihan: We're really excited as a team. Progress is launching a new company called FuseSource that will be completely focused on the open source business model. The FuseSource team has been an independent business unit, since IONA was acquired by Progress Software. We have been fairly independent within the company, but separated as our own company we'll be able to be completely independent in terms of how we do our marketing, sales, support, services, and engineering.

When you're part of a large organization, there are certain processes that everyone is supposed to follow. Within Progress, we are doing things slightly differently (or very differently depending on the area) because the needs of the open source market are different. So being our own company we'll have that independence to do everything that makes sense for the open-source users, and I'm pretty excited about that.

Being our own company we'll have that independence to do everything that makes sense for the open-source users, and I'm pretty excited about that.

Gardner: So, here we are in the middle of October, and this is pretty much now a done deal. Tell me about the history of FuseSource and what led up to this movement.

Moynihan: Rob, who is on the call, can maybe talk about the early days. He was actually a founder of a startup company and that was really the genesis of that is now FuseSource. So Rob, why don’t you start out and I can chime in if needed.

Davies: The notion is of having open source infrastructure start with a group of developers and founders in open source projects. It worked for commercial license based infrastructure product companies before. We -- the other individuals are James Strachan, Hiram Chirino, and Guillaume Nodet -- realized that the best way to deliver open source for infrastructure was to develop open source at Apache.

We decided that open source is the best thing to do, because it opens up the software for engineers to look at, use, and enhance. We felt like that was a very good way to grow a community around the projects we wanted to do.

We started this company called LogicBlaze, which was acquired three years ago by IONA. At that time, we decided to sell to IONA because we wanted to piggyback on their expertise of doing large infrastructure rollouts. IONA, the FUSE brand, and the FUSE product line then really came into the forefront.

Get the message out

ebbie Moynihan, who was the director of open source at IONA, was working on another project at the time called Celtix, which morphed into Apache CXF. We decided to collaborate on this effort to get this message out about using really good infrastructure based on Apache open source projects and get that into the marketplace.

Then, when IONA was acquired by Progress, Progress initially liked the idea, or liked the fact that it’s disruptive. They invested in the group: we added more employees, more sales people, more people in marketing, etc. We have been involved in that for the last two years.

But, it has gotten to a point where we realized that to operate it in its most effective way it has to be outside of Progress to a degree, because it is so different in the go-to-market strategy and what we deliver to customers compared to the rest of what Progress is doing with the one-product solution.

Moynihan: Also, from a business prospective, Progress’ go-to-market is, as Rob said, offering solutions at the business level, whereas open source has traditionally been looked at by developers and project managers more from a technical perspective and more from an open source advocate perspective.

That’s growing over time, as we have talked about earlier. Open source is becoming more and more mainstream, but our approaches to marketing and sales are different in the FuseSource team and are much more community oriented and grassroots than the way that corporate marketing is done at Progress Software.

Our model is that there is no license cost. It’s a subscription support model.

Gardner: Let’s face it, the business models are quite different. The way in which you develop revenue is more through support and maintenance and not on the upfront costs and implementations. Maybe you could explain why the business models being separate makes more sense.

Moynihan: Absolutely. From a practical perspective, the business model is very different. In traditional enterprise software sales, there is a license fee which is typically a large upfront license cost relative to the entire cost over the lifetime of that software. Then, you have your annual maintenance charges and your services, training, and things like that.

From an open source perspective, typically upfront, there is no license cost. Our model is that there is no license cost. It’s a subscription support model, where there is a monthly fee, but the way that it is accounted for and the way that it works with the customer is very different. That's one of the reasons we split out our business. The way that we work with the customers and the way they consume the software are very different. It’s a month-to-month subscription support charge, but no license charge.

Gardner: It’s interesting to me that Progress with FuseSource recognizes that there is that little bit of apples and oranges going on, and perhaps keeping them separate is in the best interest of the users and the community. But, we're seeing the opposite in other companies, where people are looking to fold open source projects and products into a larger family or stable of commercial products.

Do you think that we are going to see that trail off in the market? I guess the question is: what about these mega vendors and the direction of how an open source model and a commercial model should or shouldn’t overlap or exist together?

Very difficult

Moynihan: There are a lot of opinions out there on whether or not open source can be successful in a hybrid model within a single mega vendor. My view is that it’s very difficult, especially because the business model is different. If you're a company and you're out there selling a large portfolio of products, where only a small amount of it is open source, you have a team of people trying to sell, market, and grow business around that portfolio. They're going to focus on the license product.

They're going to have a tendency to focus on those products that are going to drive revenue in the short-term, from a business perspective. It has nothing to do with whose model is better.

I'm very happy that Progress has decided to separate out FuseSource. We already had our own sales team, but now we can be completely focused on working with our customers to help them adopt open source, and when it makes sense, they can work with us to get support and to get training.

It’s a very consultative partnering model. In the early days we really like to provide everything someone needs to get going at no cost. You can come to and get a lot of documentation, and you can get a lot of training webinars for free. We have weekly webinars that show you how to get going on our products, and that’s nothing that you would see in traditional commercially licensed software.

Gardner: Debbie, tell me about what a customer should expect. If you're a user of FuseSource and if you're in the community, how will this move towards autonomy actually impact you? Will you perhaps not even notice too much?

Overall, it will be really good for our customers. We've talked with them, and they're pretty excited about it. We're all excited about it.

Moynihan: From a customer perspective, this change will have a small but significant impact. We are continuing to do everything that we have been doing, but as I mentioned earlier, we will be able to have even more independence in the way that we do things. So it will all be beneficial to customers.

From an administrative perspective, our email address will change to and invoices will say FuseSource instead of Progress Software, for example. But, from who they're going to be working with, who their account managers will be, who is developing the software, and who is providing the services and the support, it’s going to be the same people that they have been working with.

We have also launched a new community site at, which we're pretty excited about. We were planning to do that and we've been working on that for several months. That just provides some additional usability and ability to find things on the site.

Overall, it will be really good for our customers. We've talked with them, and they're pretty excited about it. We're all excited about it.

Gardner: Let's get back to looking at the overall market for infrastructure, open source infrastructure in particular. Rob, tell me a little bit about what's going on in the market?

We're seeing a lot of interest in clouds, private clouds, hybrid clouds. We're certainly also seeing a great deal of emphasis on reducing costs, particularly from the service provider, where they are going down to minute margins in some cases. They really need to make to sure that they're doing this in the most cost-effective manner. Then I have to imagine that if the service providers are able to provide IT-as-a-service at a low cost, the IT enterprises themselves will have to follow suit.

Help me understand the new economics of IT and how open source infrastructure fits into that.

Disruptive in the market

Moynihan: From a market perspective, at a high level, open source is really disruptive in the market in that it's affecting how people are buying software. Generally, we've seen a lot of changes over the past 5 to 10 years anyway, where license costs seem to be coming down with more and more discounting, and people are looking at it.

Historically, software vendors looked at license revenue as the premium part of the business to focus on. More and more they're realizing that a lot of value really does come from the services side. Why? Because that’s where you partner with your customer. That’s where you get to know them. That’s where you help them select the right solutions.

In the open source community, that’s how it works. People come to the community and work with the developers directly. It eliminates a lot of the cost involved in large, complex software organizations, where you might have to wait to schedule time of the product manager, who then would have to spend time with the engineers understanding what's happening with the products, so that he could then relay it to the account team, and then they would meet with the customer.

Open source just breaks down a lot of barriers and eliminates a lot of the costs involved in getting the best software to the users. Why? Because people are talking directly to the developers in the community. The developers are getting the feedback directly.

While we do have some level of product management for open source, a lot of it is based around packaging, delivery, licensing, and these types of things, because our engineers are hearing directly from customers on a moment-by-moment basis. They're seeing the feedback in the community, getting out there, and partnering with our customers. So, from an economic perspective, the model is different.

You pay as you go. You scale as you go. And you don’t have that upfront capital expenditure cost.

Just from the overall "how it works" from a buy-in perspective for the customer, it's very different. It's very attractive in these times that we are having right now, because upfront you don’t have the capital expenditure costs. You can get going. You can go to an open source community site, download the software, and try it out.

We've actually seen people get to proof of concept before they have even spoken with us. We've seen people build our stuff into a product as an application provider, as an OEM, and then come to us. That will tell you how easy it is for people to consume and use open source without having to spend a lot trying to select or figure it out, before they even can try it out.You can try it before you buy it, and when you go to buy, you pay as you go.

That’s also the reason people like cloud. You pay as you go. You scale as you go. And you don’t have that upfront capital expenditure cost. For new projects, it can be really hard to get money right now. All these benefits are why we're seeing so much growth in FuseSource.

Gardner: Are there some salient examples that demonstrate what you've been talking about? I'll throw this out to either one of you. Some of your customers might be good examples of how this can work, both from an economic, technical, and innovation freedom perspective as well.

Moynihan: I'll mention a couple of examples. They are kind of similar and something that we are seeing more and more. Sabre Holdings delivers a lot of applications for various airlines. They have a lot of partners, travel agencies, and airlines. Also, the Federal Aviation Administration (FAA). Those are two of our customers.

In both of those cases, they started looking at open source at the project level, but eventually came to standardize on open source for their common integration infrastructure, and to recommend it - not just within their own organizations - but in both of those cases, to their partners.

Integration is easy

That’s the really nice thing about open source. Integration within your own company is easy. You can have any crazy interface and you'll figure out how to do it. But when you partner, you can't tell your partner how to build their interfaces. But, you can have a common integration platform and say, "Can you transform your stuff so it can connect to this platform?"

With open source, they don't have to have a license for that. So, it's quite nice. They can get going, try it out, and see how it works without requiring their partners to pay any cost. From an economic perspective, they could try it out, get going, look at some proof concepts, test it out, and then rolled it out for a standardized infrastructure internally for some major projects. Then, work with partners to roll it out further.

Gardner: To your point Rob, we've heard a call for more standards in the market around cloud, such as common operating environments and standards for interoperability. In lieu of having those structured standards develop rapidly, we have the open source fallback position. We can't always know what the commercial underpinnings are for services across an ecosystem of cloud consumers or providers, but having a common open-source infrastructure base might very well serve that purpose. Is that what we are finding technically?

Davies: That’s really on the money, Dana. There is this trend as well. When you look at cloud, there are different issues you have to overcome. There is the issue about deploying into the cloud. How do you do that? If you're using a public cloud, there are different mechanisms for deploying stuff. And there are open source projects already in existence to make that easier to do.

This is something we have found internally as well. We deploy a lot of internal software, when we are doing our big scale testing. We make choices about which particular vendors we're going to use. So, we have to abstract the way we are doing things. We did that as an open source project, which we have been using internally.

You have to have choice. You can’t really dictate to use it this way or the other way. You've got to have a whole menu of different options for connecting.

When you get to the point of deploying, it’s how do you actually interface with these things? There is always going to be this continuing trend towards standards for integration. How are you going to integrate? Are you going to use SOAP? Are you going to use RESTful services? Would you like to use messaging, for example, to actually interface into an integration structure?

You have to have choice. You can’t really dictate to use it this way or the other way. You've got to have a whole menu of different options for connecting. This is what we try to provide in our software.

We always try to be agnostic to the technology, as much as how you connect to the infrastructure that we provide. But, we also tend to be as open as we can about the different ways of hooking these disparate systems together. That’s the only way you can really be successful in providing something like integration as a service and a cloud-like environment. You have to be completely open.

Gardner: It sounds as if we've been able to capture the best of both worlds, with FuseSource being based on mature Apache software projects with the model around the FuseSource support, which is several years old and very well demonstrated in the market. But now that you are autonomous, you're also getting the benefits of being a startup, of being innovative, being able to move, being fleet, being able to be agile.

Debbie, is that a fair characterization? By going autonomous with FuseSource, you're getting the best of a mature, established mission-critical enterprise supplier, but also, you're able to move quickly in a rather dramatically changing market.

Best of both worlds

Moynihan: Definitely. We're really excited about it. Definitely being backed by Progress Software provides us the benefit that customers can have that assurance that we're backed by a large organization. But, having FuseSource as standalone company, as you said, gives us that independence around decision making and really being like a startup.

Sometimes, we get ideas, we want to make it happen, and we can make it happen. We can make it happen, the same day or the next day. We'll be able to move as quickly as we want. And, we'll be able to have our own processes in any functional area that we need to best meet the needs of the open source users.

Gardner: Rob, from a technical perspective, how do you view this best-of-both-worlds benefit?

Davies: From a technical perspective, it’s really good for us. The shackles are off. There’s a lot of suddenly reinvigorating that seems to move forward. We've got a lot of really good ideas that we want to push out and roll out over the coming year, particularly enhancing of the products we already have, but also moving onto new areas.

There's a big excitement, like you would expect when you have got a startup. It just feels like a startup mentality. People are very passionate about what they're doing inside FuseSource.

Because those shackles have been taken away, it means that we can actually start innovating more in the direction we really want to drive our software too. It’s really good.

It's even more so, now that we have become autonomous of Progress. Not that working inside Progress was a bad thing, but we were constrained by some of the rigors and procedures that you have to go through when you are part of a larger organization. Because those shackles have been taken away, it means that we can actually start innovating more in the direction we really want to drive our software too. It’s really good.

Gardner: Well, great. How can people learn more about FuseSource? You said earlier Debbie that you have a website that’s been refreshed. Are there some URLs or directions that you would point people to in order to learn more?

Moynihan: Yes, I would point people to They can always contact us directly as well. Rob and I would be happy to speak with anyone that has questions. You can send an email to and we would love to talk with anyone that has any questions or wants to hear more about it. is the place to get information on the web. We have a Twitter account,, that you can follow as well.

Gardner: I want to thank you both. We have been discussing how a newly autonomous FuseSource is evolving to meet the need for open source infrastructure in a rapidly changing marketplace, and of course in an environment where cost and low risk are all very much top of mind.

So, thanks again to Debbie Moynihan, Director of Marketing for FuseSource. Thanks, Debbie.

Moynihan: Thank you, Dana.

Gardner: And also, Rob Davies, Director of Engineering for FuseSource. Appreciate your joining us, Rob.

Davies: No problem. Good to speak to you, Dana.

Gardner: This is Dana Gardner, Principal Analyst at Interarbor Solutions. You've been listening to a sponsored BriefingsDirect podcast. Thanks for listening, and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Download the transcript. Sponsor: FuseSource.

Transcript of a sponsored podcast discussion on the status and direction of FuseSource, which is being given its own corporate identity by Progress Software. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.

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