Showing posts with label Meehan. Show all posts
Showing posts with label Meehan. Show all posts

Sunday, May 03, 2009

BriefingsDirect Analysts Unpack Platform as a Service and Measure Future Impact on Enterprises

Edited transcript of BriefingsDirect Analyst Insights Edition podcast, Vol. 40 on the promises of platform as a service and its apparent lack of traction among enterprise managers.

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Dana Gardner: Hello, and welcome to the latest BriefingsDirect Analyst Insights Edition, Volume 40. I'm your host and moderator, Dana Gardner, principal analyst at Interarbor Solutions.

This periodic discussion and dissection of IT infrastructure-related news and events -- with a panel of industry analysts and guests -- comes to you with the help of our charter sponsor, Active Endpoints, maker of the ActiveVOS, visual orchestration system. We also come to you through the support of TIBCO Software.

Our topic this week on BriefingsDirect Analyst Insights Edition, and it is the week of April 13, 2009, centers on platform as a service (PaaS). This is the part of the cloud taxonomy that pertains to software and services development over the Internet.

Developers can use tools and testing apparatus as a service on someone else's data center, building and refining their applications and services, and even putting them through some real world performance testing, before going into production and use.

Where these services finally find a home or a runtime platform of some kind can come in a number of ways. Perhaps they run on the same cloud they were developed on. Perhaps they move to other clouds, on-premises servers or data center, or even other kinds of hosting models -- or maybe all of the above options in some form.

We've seen a great deal of interest by the developers in using Amazon's Web services for PaaS. We've also seen a lot of action and interest from the likes of Google, Microsoft, and even IBM. Of course, there are quite a few ecology players that have been out there for sometime as well.

PaaS is not passé. Yet a lot of enterprise operators and mangers that I speak to don't even see PaaS on their radar. They're much more interested in the infrastructure-as-a-service (IaaS) components of cloud computing and software as a service (SaaS) to a certain degree, but they're not quite sure about PaaS.

So, what is PaaS good for and how will it impact enterprises? That's the question we're here to help you understand. What is the reality and where will we end up in regard to PaaS? We're joined by a panel of guests and analysts to help dig into the enterprise role of PaaS.

Please join me in welcoming our analyst guests this week, Jim Kobielus, senior analyst at Forrester Research. Hey, Jim.

Jim Kobielus: Hi, everybody.

Gardner: David A. Kelly, president of Upside Research.

David A. Kelly: Hey, Dana. Glad to be here.

Gardner: And Mike Meehan, senior analyst at Current Analysis.

Mike Meehan: How you're doing, Dana?

Gardner: I'm doing well. I also have several guests I'd like to introduce. Joining us today is Jonathan Bryce, co-founder of Mosso at Rackspace. Welcome to the show, Jonathan.

Jonathan Bryce: Thanks for having me, Dana.

Gardner: And Rourke McNamara, product marketing director at TIBCO Software. Welcome.

Rourke McNamara: Good morning, Dana.

Gardner: Let's start with Jonathan Bryce at Mosso. You saw what was possible in terms of development of websites and web applications quite sometime ago. Tell us something about Mosso, what you do, how you developed the notion of PaaS, and where you think it's heading.

Bryce: I started Mosso with a co-worker, Todd Morey, and we started developing it in 2005. We were working at Rackspace hosting, which is a large traditional managed hosting company, and they agreed to fund this idea and help us get it off the ground. We started Mosso out of a need that we had. I'm a developer. Todd is a designer and a marketer. We realized that what we really enjoyed working on, and where we really felt like we could add value, was in building applications.

If you built an application of any complexity or significance at all, then you ended up having to take on the hosting burden as well. That required server and network administration, and making sure that you were on top of the security, the patching, the backup, and all those things that come along with it.

We really wanted to find a way to create a technology offering that took care of all of the headaches around hosting an application, so that developers could focus just on writing the code. That was the premise that we started Mosso with.

Gardner: That seems to have attracted developers, but is this something that you see a wider embrace of, or understanding of, the inside of enterprises?

Bryce: When we started out, we definitely were targeting people who were similar to us, who were independent or small development and design shops. Over time, we found that this is a more general-purpose tool that did appeal to a broader audience.

We also realized that when you're working at the PaaS layer, you have to productize. So, you have to standardize on technology and on what's

We also realized that when you're working at the PaaS layer, you have to productize.

possible to do in the environment. Within the last year, we've expanded our product portfolio to include a couple of IaaS offerings as well.

One is called Cloud Files, and it's cloud storage. Another is Cloud Servers, and it's virtual computing. Within the enterprise -- it may be a marketing site for major a sporting event that's doing some special promotion -- we're seeing people who don't want to have to run all that infrastructure. They don't know how popular it's going to be, so they'll use it for a small piece.

We're not seeing a lot of enterprises moving wholesale their SAP systems and all of these big enterprise software packages to the platform. We do see them using PaaS to augment their existing technology for new projects that they're working on.

Signs of movement?

Gardner: These new projects, are they typically a certain type of development environment -- a scripting environment, for example -- or are you seeing more movement out towards some of the more major development frameworks?

Bryce: It varies. It depends on which company it is. Some of them want to build it themselves from scratch, and they will write it in .NET and start without any type of a framework. But, we've also seen a lot of pickup in the open-source content management frameworks like Drupal. Wordpress is now used for a lot more than just blogging. We've seen a lot of times where people have started with a framework like that and then gone from there.

Gardner: Okay. Let's go to Jim Kobielus. Jim, we've seen this many times in the past, where developers grasp something quickly and early and end up driving it into much more mainstream adoption. Do you expect that that's going to also be the case with PaaS?

Kobielus: I think so. It's the early adopters who are looking for
a platform where, first of all, they don't have the internal resources to go out and acquire the hardware and all the infrastructure, and license the application servers, the tools and everything they need to get up and running out a new project.

Just as important, from the very start they want 24x7 reliability from whatever platform they plan to execute this code on. So, they're looking for a strategic partner who can handle all the hosting and, to a great degree, can also provide them with the tooling they need, both for the development and ongoing management of the code.

The early adopters have big plans, but small resources. The public-cloud hosting of these applications is important for those applications, where, as a previous speaker indicated, there might be a strong orientation toward business-to-business (B2B) applications, or delivering it out to the broader Internet as a service. They want something that's already out there on the cloud that will be immediately available and accessible worldwide, and with the reliability to back it up.

Gardner: Do you see an opportunity for these tools and services to play a role in how data warehouses are being utilized, perhaps some mining or some additional tooling that you might use across different domains -- a data set within your organization, perhaps something you've leased or rented for a period of time, maybe some publicly available metadata. Wouldn't PaaS make sense, when you're doing these data chores that involve multiple data sources?

Kobielus: Very much so. In fact, a lot of data mining projects are like that. First and foremost, data mining projects depend on discovering sources of data, both internal and external -- customer data, market intelligence data -- and then being able to extract, transform, load, cleanse, and consolidate the data into an analytical data mart.

I am using that term in a logical sense. The analytical data mart then can be mined to do rational analysis and scoring. So, the analytical data mart

All that clickstream mining is happening. That's a core of the Web 2.0 business model

for data mining projects can become fairly large fairly quickly, with all of the different sources of data being brought into it.

With the whole Web 2.0 phenomenon, more and more organizations and businesses are making their entire business model dependent on their Web presence and on their ability as a business to continue to mine the clickstream data user sessions to be able to identify patterns related to the customer experience and preferences, so that they can then up-sell customers, or hold onto the customers.

All that clickstream mining is happening. That's a core of the Web 2.0 business model, and that depends on a big, old clickstream data mart being maintained. As I indicated earlier, small businesses that are going down this road are looking increasingly for a clickstream data mart in the cloud that can be managed -- and it might be hundreds of terabytes or even petabytes -- that can be provided to them fairly inexpensively, and fairly quickly through the cloud model.

That's an example where PaaS is the underlying platform for the analytical data mart in the cloud for clickstream analysis for the whole Web 2.0 business model.

Gardner: Interesting. Let's go to David A. Kelly. David, you look at business process management (BPM) quite a bit. Are there any aspects of business process, putting them together processes that are going to hop across multiple services with multiple sources? Does PaaS relate to that?

Role for process automation

Kelly: Absolutely. There's a big role for business process, process management, and process automation that will be able to cross boundaries here and access different processes across cloud. So, there is an opportunity for PaaS to incorporate those types of capabilities. We're just seeing the beginning of that in terms of what's out there, and over the next couple of years, we're going to see more focus on that, as organizations start to deploy more applications, and develop more cloud-focused and cloud-based applications.

The need will be to manage and automate those processes across different boundaries. Just as Jim said on the data warehouse, business-intelligence side, we have the same thing on the process side. We're going to see development of more tools in that area and capabilities and services that allow organizations to do that.

Gardner: What's interesting about what you're saying and what Jim said is that these aren't necessarily cost-saving measures. We think about cloud as being a way to reduce cost and waste, increase utilization, take advantage of virtualized fabric of infrastructure services, and so on.

You've got to talk about being able to do something quite different that hadn't been able to be done before, because you have elevated yourself to the cloud. Doesn't this whole development in the cloud smack of that as well -- not just cost savings, but being able to do things that hadn't been possible before?

Kobielus: It's rapid, cheap provisioning in the cloud. It's the bubble phenomena, and quickly the bubble grows large like a data mart, because it can grow quickly in the cloud, and then it quickly gets de-provisioned.

Gardner: Dave?

Kelly: I agree with that. Dana, what you bring up is this idea of more nimble processes, and more nimble response -- faster, more agile response to changes. In that regard, from the process standpoint, it's like you're looking at more nimble process management or nimble BPM solutions that we're going to see down the road in order to be able to respond more quickly to business changes.

Gardner: What about that Mike Meehan -- this idea of nimble activities as a result of moving some or significant portion of what you are doing to the cloud? Does that make sense to you?

Meehan: It does, but it depends on what you are talking about as what you want to enable the nimbleness for. We're really talking about business processes that involve third parties and outside parties here. When you're still behind the firewall, it's not going to have as much of immediate impact. What we're really talking about is that we've got a cloud-based runtime out there.

Now, we're talking about taking the functions that we do in-house -- development, business process management, business intelligence (BI) -- and moving those out into that cloud, where we can interact with the rest of the world, which is where companies make their money. You don't make money by selling your own bellybutton. You make money by going out and interacting with the rest of the world. That's where the opportunities are.

We're defining those right now, but it's what can I develop that I can push out to other people and what sort of process can I create to incorporate business partners? That's where the exciting stuff is, and we're really just wrapping a rope around that right now, and trying to tighten it up. There's a big loop right now, and we're still trying to squeeze value out of it.

Bifurcation in the market

Gardner: Do you see this bifurcation in the market, as I do, that developers grok this, and are into it, particularly the ones who are doing green-field and Web development, but that behind that partition, where operations and runtime environments are being closely monitored, they don't quite get this or not interested?

Meehan: Oh, absolutely. First, developers are always interested in doing new stuff. They're naturally curious that way. It's one of the good things about developers. They'll go out and try new things. Operations people are type A. They're not going to be into adding chaos to the mix.

That's always the natural tension you've got there. A lot of the PaaS vendors -- I'll mention one that's not on this call, but I know the folks at WaveMaker -- constantly talk about how you've got to have management tools.

That's being done to throw something back to those operations folks saying, "Okay, we can manage it. If we go in there, we use this platform, and it's not just pure chaos for you." Whether or not that's an essential part of the platform, there's an argument to be made that maybe it isn't, but it's being done as a sop to the people who are going to be naturally nervous about this.

Bryce: One thing I would add is that we've definitely seen with some of our enterprise customers is that development teams have come to us, because they are looking for that provisioning flexibility that we were talking about earlier. Their IT department can't get them the equipment that they need fast enough.

For example, last year we had a customer that had an application they were running that ended up needing a lot of capacity really quickly. In

The interesting thing is that once we've been able to build a relationship with a company's development department, we're starting to see IT departments embracing this

about a week, it went from running on a couple of servers to having 10x the amount of load and traffic that they were handling a week before. They said there was no way they could have gotten this many servers up and configured from the IT department.

The interesting thing is that once we've been able to build a relationship with a company's development department, we're starting to see IT departments embracing this, not as something to fear outside their walled garden, but actually a tool that's helpful for them.

There are a lot of things that we have to go through. We have to engage with them and, as Mike was saying, we have to help them feel comfortable about how the system is set up, how it's managed, what the process is all around, deployment, security and all of those kinds of things. Then, they can look at it as another resource, not something that's dangerous.

Gardner: So, comfort with resources. Let's go to Rourke McNamara at TIBCO. This is yet another element to integrate into the larger apparatus of the enterprise, something that the middleware vendors are designed to do. Do you at TIBCO view PaaS as an important new component that needs to be brought into a managed integration process of some kind?

Managed integration

McNamara: We absolutely do. Given that one of our strengths and a lot of our history is in integration software and large-scale platforms for developing distributed systems, TIBCO has a lot of experience with very large companies, and very large companies that develop a huge number of internal facing applications.

I'd totally agree that, up until this point, almost all of the work done in the cloud by enterprises has been Internet-facing, outwardly facing, or partner- or customer-facing applications. There's a huge interest in leveraging this technology and making use of the cloud for internal-facing applications.

And that said, the issue with the purely public cloud is that it's very complex and difficult to set up the security required to bring online an internal-facing application. You need a secure connection to your internal resources to integrate this with the rest of your infrastructure. You need a secure connection for your users to be able to access this. You need integration with directories and things like that, and all of that presents something of a barrier to entry.

We still know customers that have experimented with infrastructure as a service and PaaS for those types of applications, because they've heard all this hype. They've heard everything people said about cloud, and they want to make sure they understand what's going on. They're planning appropriately around these new developments. There's a lot of talk about some of the things that folks can use to mitigate those concerns.

"Private cloud" is a term that's been tossed around, but not clearly defined. There's a lot of confusion around it, because it's not clear.

. . . the issue with the purely public cloud is that it's very complex and difficult to set up the security required to bring online an internal-facing application.

Some folks just use it to mean a virtualization technology, and some use it more to refer to a full-on utility model for delivering compute power and computing resources.

Then there's the term that I think was first used about a year ago by a blogger -- "virtual private cloud" -- the notion that the resources exist outside your enterprise, but when you provision them, when you generate use for them, they are your resources. They're not connected to the public Internet. They're connected via some, sort of virtual private network connection to your internal network.

As you add to that collection of machines, those virtual resources are yours, and yours alone, fully secured, and effectively behind your firewall. Right now, it's just something folks are talking about. When that becomes a reality, it's going to be a huge influence in the way large enterprises look at cloud computing.

Gardner: Now, Rourke, wouldn't it be possible with this vision that you might create applications in the cloud and then you might want to host them in different places, depending upon how you would use that application.

Perhaps the application would be internal facing -- say, a business-to-employee (B2E) application, which you might put on one of those virtual private clouds. Or, you might have the same application that you use in the context of an ecology of business processes that we discussed with David Kelly.

You might want to have that in some respects in a cloud, but controlled with access, governance, and privilege policies and so forth. Then you might even want a very similar or a version of that application to be wide open, customer facing, the more the merrier. This all also sounds like a need for management policy governance and integration.

Exciting and scary

McNamara: Absolutely. That notion of a hybrid cloud, made up of all those different pieces and ones we haven't even thought of yet, is something that's both very exciting and very scary for large IT organizations.

It gives them an enormous range of flexibility, and it gives them an enormous range of power, but at the same time they're all worried about how they're going to be able to control. They worried about how they'll make sure that all of the stuff deployed in those environments is in compliance and talks together, make sure the right people can get into those different environments to change the appropriate applications and adjust the business logic, and that corporate standards are adhered too.

That's one of the things that we're looking very deeply at TIBCO Software. That's cloud governance, how we can expand the technology and experience we already have in service governance out to cloud governance, and to really take a look at that holistic hybrid cloud picture. We're trying to figure out how we can tie it all together for IT organizations, take away some of the complexity, and make it so that they can be very productive with those technologies.

Gardner: Mike Meehan, just as the world is becoming, apparently to some people, unsafe for service-oriented architecture (SOA), suddenly it's safer

Well, to knock a recent public fear on its backside, SOA is not dead.

for cloud governance. Are we talking about the same capabilities? Where companies may have been leery about horizontally applying SOA internally, they're going to have to resort to it anyway, because they are going to have to deal with these hybrid cloud issues.

Meehan: Well, to knock a recent public fear on its backside, SOA is not dead. All the things that we were doing inside of service orientation are still going on. I don't think you can move out to the cloud unless you service orient. One doesn't exist without the other. Of course, you're going to have to govern what comes in through the cloud, and that's a whole new layer of governance. We're seeing companies that are putting tools out there to help you do that.

Just recently, Vordel has an edge-networking device to help you govern your consumption of cloud-based resources. Appistry also has created some management tools along those lines.

We're seeing these companies taking what we were calling SOA management software and devices and pushing them out to the cloud. It's a fairly natural progression. TIBCO is absolutely right to be thinking in terms of this is the infrastructure you have to manage. You can't just suddenly grab things from outside and let them run wild internally. There has to be some adult supervision, and there's a huge business opportunity that comes with that.

As you use SaaS, as you bring in infrastructure and as you have your applications get infrastructure from cloud vendors, those are all going to be things that you're going to have to monitor and take care of as a business. You can't just say, "Well, that touches somebody else. Therefore, I can't care about it." This is your business. You have to care about it.

'Rogue' activities

Gardner: Let's take this to Jonathan Bryce. If you have developers that are perhaps doing rogue activities vis-à-vis your services, you would want to be a good partner with that enterprise in terms of its more official -- for lack of a better word -- IT activities. How do you bridge the gap, or do you leave that to somebody else?

Bryce: Developers come to us from larger companies. It's completely automated to get started. So, sometimes they come, and we don't even realize that they're using the system, until they're well into it.

Even these “rogue developers” are pretty diligent about making sure they inform us what they are doing. If they have special compliance requirements or governance needs, a lot of times they'll have questionnaires, security questionnaires, or operational questionnaires. We engage with different groups within our organization to complete those and help them get all that that information filled out.

Generally, the developers come here because they're trying to get some flexibility, speed, and capacity that they're not able to get internally. Most of them are fairly professional and straightforward about their organization. That's definitely what we prefer, because we want to build relationships with all of these enterprises over the long term, so that we can help them with more and more of their needs.

Gardner: What about the pace of this in the market? It seems to me that Amazon is moving very quickly. In fact, when they came up

Generally, the developers come here because they're trying to get some flexibility, speed, and capacity that they're not able to get internally.

with Amazon Web services, I don't think they anticipated that their test and dev portion of the business would become predominant. But that's okay, because where developers go the runtime usually follows.

We're starting to hear more about Java in this cloud. We're hearing more about .NET at Microsoft with Azure. We're hearing more about data crunching, vis-à-vis MapReduce-type technologies. What's your sense, Jonathan, given that you're a vendor in the business? Is Amazon in a sort of a mad dash to get out in front on this, and in a sense of dragging the other players along, and, as a result, they have to be there too?

Bryce: Amazon has created a great set of products. They've created infrastructure products that really are very similar to what people are already used to running. They also are kind of at a lower level. The lower level you go to, the more flexibility you have to customize it, and the more responsibility you have as well.

You can set up Amazon infrastructure and lock down network access. You can remove software from the system. You can have a lot of control over it. That's been a big part of their rapid growth. It's something that that's pretty similar to what people are already used to working with, but you can get it a lot faster and you can pay in a more utility manner.

Now, Microsoft is coming out with Azure, which is built around .NET. App Engine announced Java support. Our products have already been built around standard frameworks. To move that rapid adoption from infrastructure up to the higher levels, one of the keys is to try to work within the frameworks and the technology stacks that people are used to working with.

App Engine will see more rapid adoption of Java where they have implemented a lot of Java standards, the data API, the messaging API. Some of those things that they are adopting are official parts of the Java stack. I think that there will be more rapid adoption of that, versus the Python offering, which was a little bit nonstandard and a little bit out of the norm of what companies were used to dealing with.

This is what you see in every part of technology. Operating systems over time have standardized even desktop processing applications. You have a word processer, a spreadsheet, and presentation software. These things all standardize in technology, and that's when the adoption really spreads. That's what we're seeing right now as the PaaS offerings mature across the board.

Java in the cloud

Gardner: Now, Rourke McNamara, more Java in the cloud -- whether it's at Google or somewhere else -- means more enterprise-caliber, more transactional applications, and perhaps baseline business services coming across the cloud, all of which is probably good news for an integration vendor.

McNamara: Definitely. We've gotten a lot of interest from our customers in standards-based or normal frameworks and normal technologies in the cloud. The big barrier that we've seen with a lot of our customers to adopting PaaS has been that, up until very recently, just about none of them were standards based. They were a completely new and proprietary language or technology that was visual, something like Python with a custom API for Google App Engine or some sort of JavaScript for the other folks out there.

Our customers are scared enough of moving to this brand-new technology and taking that leap, but to do so in a way that they are building an application that can never run anywhere but in the cloud doesn't make sense for them. Dana, as you mentioned a couple of times, folks are more and more trying to build stuff that is reusable. If they build it for one particular application, they can re-purpose it for another application, or reuse parts of it for yet another application.

By using standards-based technologies -- Java or Spring, for example -- folks are able to build applications that are a bit more portable, a bit more reusable, and that aren't a giant leap into the cloud with something that they're not going to be able to bring back in house if the cloud thing doesn't work out for them.

Gardner: To this issue of cloud portability or cloud neutrality, we recently saw something called the Open Cloud Manifesto. I believe TIBCO was a signatory in support of that. Weren't they?

McNamara: No, we were not.

Gardner: You are not. How come?

McNamara: We got notice of that a little bit late in the game, and we just didn't have enough time to evaluate whether or not it makes sense.

By using standards-based technologies -- Java or Spring, for example -- folks are able to build applications that are a bit more portable, a bit more reusable

We didn't want to just rubber-stamp it, without really understanding what was going on, and there was a bit of a blowup there between, I think, Microsoft and Google over that.

Gardner: Right. But the general concepts of openness, neutrality, and portability, these are all important aspects from where you stand?

McNamara: They absolutely are, and as long as there is some sort of a manifesto, or some sort of set of standards and principles that are developed in an open fashion with everyone working together, we would definitely support that.

Gardner: Let's go around our group of analysts. Jim Kobielus, how do you feel about open standards? I guess it's like mom and apple pie, but how important is it for the total cloud ecology thing to develop and become a productivity and value to enterprise?

Kobielus: Very important. People often refer to "the cloud" by that phrase, as if this is a one unified platform, and it's the exact opposite. Every public cloud is essentially its own silo or stovepipe right now with its own standards and interfaces.

Gardner: Like the early Unix days, right?

Against the grain of SOA

Kobielus: Yup. As I pointed out in a recent article I wrote, right now the current state of cloud computing sort of goes against the grain of SOA. SOA is all about platform agnosticity and be able to port services flexibly and transparently from one operating platform to another, because they are all implementing these common SOA standards.

Then, when you talk about exporting them to the so-called cloud or the atmosphere full of clouds that's out there right now, the turbulent atmosphere, it becomes kind of absurd. Even a vendor like Microsoft who's both in the SOA world, and now increasingly with Azure in the cloud world, would have a disconnect between those two platforms.

They haven't really done a good job of closing the gap. If you've written applications to .NET and to their whole SOA platform, are they portable as is to Azure? No. Just by itself, a single vendor not getting its full SOA act together between the premises-based, and the cloud strategies should set off warning bells in every IT shop that has standardized with Microsoft, for example.

Gardner: It must be tempting though. If you could really lock up and create the "de-facto industry standard for cloud implementation and runtime, wow, that would be a really nice place to be. Just like it is if you can rack up the "de-facto standard" in on-premises runtime.

Kobielus: Right.

Gardner: Shall we expect them to try?

Kobielus: Of course they're going to try to dominate the cloud, just like they try to dominate the whole application server world, and they are not going to succeed.

Gardner: Jonathan Bryce, are you guys Baskin-Robbins when it comes to clouds -- 31 flavors, anybody's cloud will host it for you? What's your position on this openness?

Bryce: We mentioned earlier the Open Cloud Manifesto, which we were a signatory to. It was interesting the way that evolved. It was an idea among just a small group of people. It wasn't ever intended to really be, "This is the mandate." Then, a few of other companies started talking about it. The goal was really to put something out there that says there should be some sort of a real effort to standardize all these things.

Ironically, the process was not as open as it should have been, but the idea behind it is pretty valid. We definitely support the idea of standards, interoperability, and portability.

Rackspace has always been a supporter of various technologies. We always supported Windows, we always supported different distributions of Linux. We want to add value on top of the technology, versus being a technology vendor. So, we are not always going to be the cheapest option. We are not always going to be the commodity provider for something.

In terms of vendor lock-in, and requiring a specific deployment steps or development languages, that's not the stance that we take, because we would prefer to allow people to be able to run different applications in the environment that works best for them. Sometimes, that may not be us, but a lot of times we can add extra value on top of just the technology.

Part of the issue right now with all of these standards is that the providers and the vendors are all still developing our basic products lines. We're still developing what our niche is going to be and what our special sauce is? So, there hasn't been a lot time stick our heads up and say, "Okay, this is what they're doing, and this is what we're doing, and it makes sense for us to tie these together."

Picking one flavor

Gardner: Mike Meehan, do you think there is a temptation for enterprises to say, "We're a Java shop," or "We're a .NET shop? We only need to pick one flavor of cloud. As long as their services are loosely coupled, and we can interoperate, then maybe we're not too concerned about the underlying runtime. We'll look for the best synergy between the tools and the platform, the automation, and the plumbing." Does that make sense, and do you expect that we're going to see a rerun of the platform wars, but now at the cloud abstraction?

Meehan: Some shops will initially do what you just described. I don't think it makes sense. They'll do that because they haven't really thought it through. Openness is going to overrun that sort of thought. Hopefully, enough users have figured out that you need to be so far beyond Java vs .NET at this point in your life that this really shouldn't be the discussion that’s front of mind anymore.

Obviously, there are programmers who know one versus the other, but it's not what's driving your business, and there are larger concerns. The cloud allows you to get to different layers of abstraction and larger concerns, and you shouldn't just necessarily be Java and .NET.

So, this whole notion that somebody has to roll this whole thing up is wrong -- I'm just going to go right to Microsoft and get it from them. I

What we've seen from Microsoft to date hasn’t made a lot of sense. That's why Google hasn't really taken off yet, because it hasn't done something quite elastic enough yet.

agree with Jim. If they try that, they are going to fail, and they're going to fail hard. I hope they have a sense of that, and I hope they're looking at this as a more inclusive universe, rather than a more exclusive universe. Amazon is doing really well right now with EC2, because it is most generic. For example, Sun can put Rails 2 on top of Solaris, and put that up in EC2.

Gardner: We also have Red Hat Enterprise Linux available is a runtime environment?

Meehan: Exactly, and that's all just in there. You can throw anything in there. It really is elastic. Elasticity is what's got traction for Amazon right now. It's not that Amazon has the most unified, elegant platform offering out there. What we've seen from Microsoft to date hasn’t made a lot of sense. That's why Google hasn't really taken off yet, because it hasn't done something quite elastic enough yet.

Gardner: We haven't mentioned, but they came from the SaaS side, and they have an interesting balance between proprietary and open. They've tried to create an ecology, but they also certainly want to be a destination that makes more sense to stay than go. “How do you view what Salesforce has done, and is that the model that we will see -- that "cloud of clouds" model.

Meehan: What's interesting about Salesforce is that, as you said, they just started doing stuff, and it gained traction. Now, you're thinking of them as platform. You're not going to go pick and grade various pieces of SaaS.

Gardner: More than just one application as a service.

Meehan: Exactly. There's something to just getting out there and doing stuff. I don't think they've bottled the way they to do it, but they have come up with a nifty process for getting there, which is, get involved, start getting stuff out there, and you'll find out what sticks. We're all theorizing about what's going to happen? Salesforce is an example. What's going to happen is going to be a function of what we do, and we are just not going to know until we do it. So let's start getting working.

The pain of transition

Gardner: Dave Kelly, it's a little easier for someone like Amazon that's got a retail business to draw on and to monetize on its investment for infrastructure. It's another thing for Google that come in with its advertising base to create these services. They can make these services in the business models that they have dovetail, with this new cloud model.

For somebody like Microsoft, coming from an older licensed software business and trying to re-orient and re-factor that into a pay-as-you-go service, doesn't that involve some significant pain making that transition?

Kelly: It should. This a real challenge for Microsoft. It's like the open systems discussion we had a little while ago. It makes more sense for players that actually earn their revenue in a different form than traditional operators, because someone like Amazon has a core business.

Someone like Microsoft is kind of painted into the corner at the moment. That's a challenge not just for Microsoft, but for other traditional vendors.

They can expand into this new area by offering low-cost services that take away from competitors, but don't hurt their core business.

Someone like Microsoft is kind of painted into the corner at the moment. That's a challenge not just for Microsoft, but for other traditional vendors. I think there are opportunities. With Salesforce, you can make that same kind of argument. That's more an environment for that sort of solution specific type scenarios related to Salesforce. I don't see it growing into a broader, more common application platform. It could, but I don't see that.

Gardner: Okay, we're just about out of time. Let's go to Jonathan. Is that what we were seeing now -- a bunch of barbarians at the gate in the form Salesforce, Google, and perhaps Mosso as well?

Bryce: Perhaps. Maybe it's something friendlier than barbarians, but there's one thing that's important to add to the discussion of openness, standards, and the point about Amazon being very flexible and something that you can adapt in a lot of ways. We aren't seeing the potential of cloud yet. We're going to see the real potential of cloud, when there's some interoperability and portability that allows just amazing applications and systems of systems to be built on top of all of these clouds.

That's when we're going to see how this shift in computing is going to change the world. When you can develop against multiple clouds, when you can get storage in multiple occasions, when you can get as much compute as you need to run a simulation or a model, and have thousand of servers, and all of these kinds of things together, that's when it's really going to be amazing.

To do that, you will see vendors building businesses on top of the cloud. We're not going to build every feature that's going to be implemented on our infrastructure. There are ecosystems that have developed around Amazon, us, and the other providers. And we know that ecosystems will start to join together, and we'll come up with some really great tools, some really great new technologies, that harness all this power. That's when this is going to be a very exciting space.

Gardner: Okay, Rourke, last comment to you. How do you view these cloud, permutations, particularly PaaS? Are they barbarians at the gate or liberators?

PaaS as 'liberator'

McNamara: I definitely view PaaS and some of these other permutations of cloud service as liberators. If you look at what PaaS really does for developers and IT organizations, it frees them from having to worry about a bunch of details that have nothing to do with their core business and don't even have anything to do with the application that they are writing.

It frees them from having to install platform software on a bunch of machines, putting those machines into racks, connecting them up to the management and monitoring infrastructure, and getting everything set-up so that those machines are fault-tolerant and the loads distributing appropriately. It frees them from making sure that they have the right machines to handle the load, and making sure that they are predicting load increases and capacity increase or requirement increases, and far enough in advance that they're able to buy new machines.

All that stuff has nothing to do with delivering new functionality to their business users. That's really what their job is, delivering new functionality to their business users. PaaS lets them focus ideally on delivering new functionality, and lets someone else worry about all of those of details.

Gardner: Picks and shovels, to the liberators, right?

McNamara: Exactly.

Kobielus: I second that. It's liberation, because, to carry forward the scenario that I described a little while ago, you should be able to develop your analytical data mart and test it inside an Amazon cloud. But, if the Google cloud gives you a cheaper hosting, then you should be able to flexibly migrate that entire analytical data mart after production to the Google cloud where it is hosted for X number of months and years, until you're ready to deploy your premises-based data warehousing cloud, a petabyte-scale cloud.

It should be migrated from Google to your premises, and back and forth, depending on your changing operational and performance needs. For this kind of a project, a data mart for data mining, the PaaS model should give you that flexibility and freedom of not having to worry excessively about the hosting issues.

Gardner: Well, we'll have to leave it there for today. Please allow me to thank our guests. Jim Kobielus, senior analyst at Forrester. I appreciate your time, Jim.

Kobielus: Sure.

Gardner: David A Kelly, president of Upside Research. I appreciate it, Dave.

Kelly: Always fun to be here.

Gardner: Mike Meehan, senior analyst at Current Analysis. Always a pleasure Mike.

Meehan: Thank you, Dana. I just want to add that Paas, is, as far as I know, a maker of Easter egg color dyes.

Gardner: It's rubbing off this time of year. There's another pun for you.

Bryce: It's full of PaaS-abilities.

Gardner: Jonathan, PaaS is not passé either. Jonathan Bryce, co-founder of Mosso at Rackspace. Thanks for joining us.

Bryce: Thanks for having me.

Gardner: And, Rourke McNamara, product marketing director at TIBCO Software. Thank you, Rourke.

McNamara: Thank you, Dana.

Gardner: I also want to thank our charter sponsor for the BriefingsDirect Analyst Insights Edition Podcast series, Active Endpoints, maker of the ActiveVos visual orchestration system, as well as continued underwriting from TIBCO Software.

This is Dana Gardner, principal analyst at Interarbor Solutions. Thanks for listening and come back next time.

Listen to the podcast. Download the podcast. Find it on iTunes and Charter Sponsor: Active Endpoints. Sponsor: TIBCO Software.

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Edited transcript of BriefingsDirect Analyst Insights Edition podcast, Vol. 40 on the promises of platform as a service and its apparent lack of traction among enterprise managers. Copyright Interarbor Solutions, LLC, 2005-2009. All rights reserved.

Monday, December 29, 2008

BriefingsDirect Analysts Make 2009 Predictions for Enterprise IT, SOA, Cloud and Business Intelligence

Edited transcript of BriefingsDirect Analyst Insights Edition podcast, Vol. 35, on how analysts see cloud computing, SOA, the economy, and Obama Administration in 2009, recorded Dec. 19, 2008.

Listen to the podcast. Download the podcast. Find it on iTunes/iPod. Charter Sponsor: Active Endpoints.

Special offer: Download a free, supported 30-day trial of Active Endpoint's ActiveVOS at

Dana Gardner: Hello, and welcome to the latest BriefingsDirect Analyst Insights Edition, Vol. 35. This periodic discussion and dissection of IT infrastructure related news and events, with a panel of industry analysts and guests, comes to you with the help of our Charter Sponsor, Active Endpoints, maker of the ActiveVOS visual orchestration system. I'm your host and moderator Dana Gardner, principal analyst at Interarbor Solutions.

Our topic this week, and this is the week of Dec. 15, 2008, marks our year-end show. Happy holidays to you all! But, rather than look back at this year in review, because the year changed really dramatically after September, I think it makes a lot more sense to look forward into 2009.

We're going to look at what trends may have changed in 2008, but with an emphasis on the impacts for IT users, and buyers and sellers in the coming year. We're going to ask our distinguished panel of analysts and experts for their predictions for IT in 2009.

To help us gaze into the crystal ball, we're joined by this week's BriefingsDirect Analyst Insights panel. Please let me welcome Jim Kobielus, senior analyst at Forrester Research.

Jim Kobielus: Hi, Dana. Hi, everybody.

Gardner: Tony Baer, senior analyst at Ovum.

Tony Baer: Happy holidays, Dana.

Gardner: Brad Shimmin, principal analyst at Current Analysis.

Brad Shimmin: Hi there, Dana, thanks for having me.

Gardner: Joe McKendrick, independent analyst and prolific blogger.

Joe McKendrick: Hi, Dana, and a happy Festivus to all.

Gardner: Dave Linthicum, founder of Linthicum Group.

Dave Linthicum: Hey, guys.

Gardner: Mike Meehan, senior analyst at Current Analysis.

Mike Meehan: Hello, all.

Gardner: And joining us for the first time, JP Morgenthal, senior analyst at Burton Group. Good to have you, JP.

JP Morgenthal: Thanks, Dana, and I'll jump on the Festivus wagon as well.

Shadow IT

Gardner: Let me start with the predictions. It gives me a chance to steal the thunder and get out there first.

My first prediction for 2009 is that spending from shadow IT activities will actually grow, and that the amount of money devoted to shadow IT activities will come from outside traditional IT budgets, from a variety of different sources, maybe even petty cash, and we'll see a bit of growth in these rogue activities.

At the same time, I think we will see a flattening, and in many cases a reduction, in officially sanctioned IT activities, but that the net result will actually be more spending overall across a variety of activities based on services and consulting as much as actual buying of licensed software and hardware products.

The risk is that these rogue applications can make it complex for governance, management, and even security, but that moving into these areas for business development purposes is going to be an overwhelming temptation. There will be more opportunities in the cloud, software as a service (SaaS), applications as a service, and for folks like marketers, business analysts, and business development professionals to take advantage and move in the market.

We're going to be looking at aggressive sales activities and new ways of reaching consumers of all kinds, across B2B and B2C activities.

I expect very little staff erosion in IT, but I think there will be a change in emphasis as to what IT is, defining it differently. Service-oriented architecture (SOA) is going to continue to grow, but Web oriented architecture (WOA) will probably overtake it and perhaps become a catalyst to some of these rogue activities. There will be a blurring between which WOA activities happen inside IT and outside.

So, my second prediction is that inside of traditional IT we're going to find a lot of new ways to quickly cut costs. This is going to be a drill for organizations to not spend money or spend less money. Virtualization will be a big part of that. Hypervisors will perhaps go commodity, and the value-add in the virtualized environment is going to be at the stacks -- virtualized stacks or containers at the applications level.

This could then lead to more direction toward a cloud operating system and a de-facto standard could begin to emerge, which would then spur even more adoption of virtualization.

We're going to see a lot more dumping of Unix and mainframes. We are going to sunset a lot of applications that aren't essential and save on the underlying costs of supporting them. There will be some modernization of applications, but only in areas where there is low risk.

There are still going to be a lot of organizations that aren't going to want to tinker with applications that are important, even if they are running on expensive infrastructure.

My third prediction is around extreme business intelligence (BI). There will be a move in scale, larger sets of data, larger sets of content, and more mingling or joining of disparate types of data and content in order to draw inferences about what the customers are willing to do and pay across both B2B and B2C activities.

We'll start to see an increased use of multi-core and parallelism to support these BI activities, and we will begin to see IT have a big role in this. This isn't something you can do as a rogue activity, but it might end up supporting rogue activities. That is to say, these new extreme BI activities might lead organizations to seek out services outside of IT. They then can execute on what they find through their analysis.

I also predict, at number four, that upgrades will suffer. Were not going to see a lot of swapping out of one system for another, unless there's a very compelling return-on-investment (ROI) scenario with verifiable short-term metrics. This is going to hurt companies like SAP and Microsoft, and Oracle and IBM to a lesser extent, given their diversification.

Trouble for Windows 7

I think Windows 7 is in trouble. People are not going to just run to Windows 7. They're going to continue to stay with XP, and this makes the timing around the Vista debacle all the more injurious to Microsoft. In hindsight, Vista needed to be a winner. Now that we're in a downturn, people are going to stick with what they have, and, of course, upgrades are essential for Microsoft to continue with its back-end strategy on data-center architecture and infrastructure.

This provides more of an opening for Linux and non-Microsoft virtualization, and that will continue. This could mean that Microsoft needs to move to its cloud offerings all the more quickly, which then could actually spell earnings troubles for the company, at least in the short to medium term.

My last prediction is that the role of social media and networks will continue to grow and be impactful for enterprises, as marketers and salespeople begin to look to these organizations from the metadata and inference about what customers are willing to buy, particularly under tight economic conditions.

There's going to be a need to tie traditional customer relationship management (CRM) and sales applications with some sort of a process overlay into the metadata that's available from these Web-based cloud environments, where users have shared so much inference and data about themselves.

So, I look for some mashups between social data and the sales and business development, perhaps through these rogue applications and approaches outside of IT, but IT activities nonetheless, in 2009. Thanks.

Jim Kobielus, you're up. What are your five predictions?

Kobielus: I need to go home now. You stole all my predictions. Actually, that was great, Dana. I was taking notes, just to make sure that I don't repeat too many of your points unnecessarily, although I do want to steal everything you just said.

My five predictions for 2009 ... I'll start by listing them under a quick phrase and then I'll elaborate very quickly. I don't want to steal everybody else's thunder.

The five broad categories of prediction for 2009 are: Number one, Obama. Number two, cloud. Number three, recession. Number four, GRC -- that's governance, risk, and compliance. Then, number five, social networking.

Let me just start with [U.S. President Elect Barack] Obama. Obviously, we're going to have a new president in 2009. He'll most likely appoint a national chief technology officer or a national tech policy coordinator. Based on his appointment so far, I think Obama is going to choose a heavy hitter who has huge credibility and stature in the IT space.

We've batted around various names, and I'm not going to add more to the mix now. Whoever it is, it's going to be someone who's going to focus on SOA at a national level, in terms of how we, as a country, can take advantage of reusing agility, transformation, optimization, and all the other benefits that come from SOA properly implemented across different agencies.

So, number one, I think Obama is going to make a major change in how the government deploys IT assets and spends them.

The maturing of clouds

Number two, cloud. Dana went to town on cloud, and I am not going to say much more, beyond the fact that in 2009, clouds are going to become less of a work in progress, in terms of public clouds and private clouds, and become more of a mature reality, in terms of how enterprises acquire functionality, how they acquire applications and platforms.

I break out the cloud developments in 2009 into a long alliterative list. Clouds will start up in greater numbers. They will stratify, which means that the vendors, like Google, Microsoft, and Amazon and others with their cloud offerings, will build full stacks, strata, in their cloud services that include all the appropriate layers, application components, integration services, and platforms. So, the industry will converge on a more of a reference model for cloud in 2009.

They'll also stabilize the clouds. In other words, they'll become more mature, stable and less scary for corporate IT to move applications and data to. They'll standardize, and the clouds will standardize around SOA and WOA standards. There will be more standards, interfaces, and application programming interfaces (APIs) focused on cloud computing, so you can move your applications and data from one cloud to another a bit more seamlessly than you can now with these proprietary clouds that are out there. And, there are other "S" items that I won't share here.

Number three, recession. Clearly, we are in a deep funk, and it might get a lot worse before it gets better. That's clearly hammering all IT budgets everywhere. So, as Dana said, every user and every organization is going to look for opportunities to save money on their IT budgets.

They're going to put a freeze on projects. They're going to delay or cancel upgrades. Their users, as you said very nicely, Dana, are going to dip into petty cash and go around IT to get what they need. They're going to go to cloud offerings. So, the recession will hammer the entire IT industry and all budgets.

As far as GRC, government is cracking down. If it has to bail out the financial-services industry, bail out the auto industry, and bail out other industries, the government is not going to do it with no strings attached.

Compliance, regulations, reporting requirements, the whole apparatus of GRC will be brought to bear on the industries that the government is saving and bailing out.

Then finally, social networking. Dana provided a very good discussion of how social networking will pervade everything in terms of applications and services.

The Obama campaign set the stage clearly for more WOA-style, Web 2.0, or social-networking style governance in this country and other countries. So, we'll see more uptake of social networking.

We'll see more BI become social networking, in the sense of mashup as a style of BI application, reporting, dashboards, and development. Mashups for user self-service BI development will come to the fore. It will be a huge theme in the BI space in 2009 and beyond of that.

That really plays into the whole cost control theme, which is that IT will be severely constrained in terms of budget and manpower. They're going to push more of the development work to the end user. The end user will build reports that heretofore you've relied on data modelers to build for you. Those are my five.

Gardner: Thank you, Jim. Tony Baer, you're up. What did we miss?

Cost savings, cost savings

Baer: It's going to be hard to top both of you folks, so I'm going to just add some things in the margins. If I were to make one elevator statement on this, I feel like the guy [Kenan Thompson as Oscar Rogers] from Saturday Night Live, the economic expert, who they interview on "Weekend Update." He starts to give all the causes. Then, he just says, "Well, just fix it!"

That's essentially going to be the theme this year. The top five are going to be cost savings, cost savings, cost savings.

That does involve a lot of the strategies that both you and Jim have just described. For one thing, it's going to put a lot more emphasis on using the resources and infrastructure that you already have. It's going to damp down entering into new long-term contracts for anything.

Ironically, one result of that is that for the moment, you'll actually see little less emphasis on outsourcing, because that does imply a long-term contract. The fact is, I don't think anyone is really doing any meaningful projecting beyond Q1. I was just reviewing Adobe's year-end numbers and projections. Normally, they project out for the full fiscal year, and they are only going to project out for the Q1.

I'll just go through a very quick laundry list. For one thing, as I mentioned, it's going to be a lot of low cost, no cost. There will be a lot more use of open source, a lot more. This is definitely the year that the cloud and SaaS come into their own, but with a key qualification.

I think it's going to be managed clouds. Essentially, to take advantage of raw clouds, like Amazon EC2 you have to put in more of your own management infrastructure. I don't see the use of what I would call "clouds in the wild." I see more managed clouds from that standpoint.

For IT organizations, it's going to dictate more attention to IT service management to show that we're not just keeping systems going and keeping the lights on, but more along the lines of, "Here are the services that we're delivering to the business," as they try to justify the system.

On the back-end, it will be "Use more of what you have," and huge renewed investments in BI. So, Jim, I do think you still have a job this year.

Finally, because it's going to take a while for this to unfold -- you just don't regulate overnight -- there will be much greater attention to GRC.

Gardner: Thank you, Tony. Brad Shimmin, you're up.

Shimmin: Thanks, Dana. For my predictions for 2009 I took a different tact in anticipation of a new analytical concern we're starting up here in January. It's going to focus on collaboration. So, everything I did settled on that.

All the predictions I have stem from the themes that you guys have been talking about: cutting cost, such as travel, and squeezing efficiencies out of the IT infrastructure, as well as the users themselves. So, bear that in mind as I go through this.

Collaborative social networks

The first one for me is vendors tackling enterprise-plus-consumer based social networks, a blended view of those. Enterprise-focused vendors are going to do more than simply sink info from public sites like Facebook. They're going to take that information and build into or out from the enterprise into those social networks and drive information from those. It's going to become a two-way street.

You're going to see folks like Facebook, and most notably, LinkedIn, working in the other direction themselves, and with third parties, to develop enterprise-bound social networks. Look for those to emerge next year.

The second thing for me is cloud software, now that it's jumped the shark. I know we've all been talking about it, but it's definitely jumped the shark for me. I see the vendors within the collaboration space settling beyond the small and medium business (SMB) market and looking more toward the larger enterprises that are looking to squeeze more out of their existing IT infrastructure or cut costs.

Folks like IBM and Microsoft have already shown us that they can hit the long tail with stuff like Bluehouse and Microsoft Online Services (MOS) for collaboration. But, you're going to see vendors like Cisco and Oracle take up this challenge with more of a focus on managed hosting services that look more like SaaS, but they are really managed.

That's something that will appeal to the larger enterprises, owing to security, manageability, and other assurances that you get from that, not just pure-play, do-it-yourself SaaS.

The third thing for me is that enterprises are going to move away from a steep hierarchy, or the word might be "oligarchy," of an organizational model internally. This is just about how enterprises structure themselves.

This goes back to what you were saying, Dana, with stuff going off the books, and what Tony was saying about driving revenue from places other than CAPEX. Instead, to become not just more efficient and agile, companies are going to want to self organize to create these internal ecosystems, if you will, where organizations are built around employee experience, associations, interests, and energy levels -- what they want to focus on.

That's going to allow companies to more efficiently harness the users. The people, as Jim was saying earlier, perhaps are going to be tasked with setting up their own BI queries and mashing up their own applications. It's really thinking about those people, giving them the ability to run the show inside of an organization, instead of waiting for everything to come top-down.

The fourth thing for me is -- speaking in terms of communities, both internally and externally -- I am seeing silos breakdown between those.

Gone are the days of consumer-faced social networking and enterprise-faced social networking existing as independent entities, as I was saying earlier. Thanks to user profile standards like OpenID and expansion of APIs, community providers and third-party aggregation and integration tool vendors are going to allow applications and users to flow between what were heretofore closed communities.

For example, you already have vendors moving in that direction with Yahoo's YOS, which now allows the My Yahoo start page to host third-party applications from nemesis Google.

The fifth and final thing for me -- and this might be more of a wish than a prediction; I'm an eternal optimist I guess -- I'm looking for virtual worlds to gain a foothold in the enterprise.

We've seen folks like [Cisco Chairman and CEO] John Chambers use Second Life to do a dog-and-pony show. Those are great marketing tools, but they're nothing compared to the efficiencies and benefits you can gain from using the software for other things. Dana, you alluded earlier to being able to leverage that mechanism for communication with CRM. I think we're going to see that change how virtual networks can be utilized inside the enterprise.

It's not just for marketing and sales, but also to support B2B and B2C communities, where effective communication between your supply channel members is really paramount. To date, nobody has tackled that.

So, we'll see virtual worlds actually make an impact in terms of allowing these global, loosely coupled entities communicate more effectively in 2009. That's it for me.

Gardner: Thanks. Joe McKendrick, how do you see things shaking out?

McKendrick: Thanks, Dana. You guys are a hard act to follow. My first prediction -- are you ready for this -- the government, the U.S. Treasury, is going to swoop in with the Troubled Assets Relief Program (TARP) funds and swoop up all the troubled IT assets across the country -- those IBM mainframes, older mainframes, DEC units, Windows NT.

Then, the Fed is going to come in with zero percent liquidity to help finance it, and that's going to raise all boats.

Gardner: Joe, are you defining a new sector called "Toxic IT?"

McKendrick: Toxic IT, there you go.

Gardner: Joe, April 1 is not for several months.

McKendrick: Okay, just kidding. My other prediction: President Obama is going to make Tony Baer the National CTO/CIO, because he wants to "just fix it," and that's a good philosophy.

It's the economy

Okay, all seriousness aside now. The top issue, of course, is the economy. It's going to dominate our thinking through 2009. But, recession planning is so 2008, because SOA, which I focus on as well as IT, is a long-term process. You need to look three years down the road.

The economy is going to turn around. I see it turning around at some point in 2009. That's what economists are saying, and companies have to prepare for a growth mode and the ability to grow within a new environment.

Let's face it. IT has already been tight. IT has been tight since the dot-bomb era of 2001-2002. As some of us have already been saying, there probably is not going to be a huge diminishment in IT departments, because of the fact that the budgets have been lean, things have already been tight, companies already know, or have been running very efficiently, and IT departments have been overworked as it is.

An interesting sidelight is the whole Enterprise 2.0. JP, you and I have discussed this a little bit. The recession and downturn isn't going to be like it's been in the past. People are more empowered with social networking tools, as employees and as people looking for jobs. They're looking to start new businesses

We have a lot of tools available to us now that we didn't have back in 2000, or we didn't have back in 1991 or 1982, or any of those previous eras. People don't have to be victims of an economic downturn, as they have been in the past. We have the capability to network across the globe. We have the capability to start new businesses.

I've talked on this webcast before about a company that started a business with an $80 investment in IT infrastructure, thanks to cloud computing. I just heard about another company that spent about $200 for its first two months of IT.

Gardner: The question is, Joe, are they getting their money's worth?

McKendrick: I think they are. They don't have to invest in servers. They don't have to go out and buy servers. They don't have to go out and buy disk arrays, and worry about the maintenance, hiring people, and know how to maintain those things. There are a lot of opportunities for companies, and we are going to see that. We are going to see folks -- maybe IT people, or people who work for vendors and have been laid off -- have the ability to start their own business at a very low cost of entry.

On the flip side of that, the whole social-networking and cloud-computing phenomena, companies have these tools as well to employ low-cost methods to reach their markets and to interact with their customers. We're going to see a lot more of that as well.

A marketing campaign doesn't have to cost $200,000 to reach your customers. You can use the social network, the Web 2.0 tools, to interact and collaborate and find out what's going on in your markets at a very relatively low cost.

Gardner: From your mouth to God's ears. All right. Dave Linthicum, we have the entire future before us. What should we expect?

Linthicum: You guys took a lot of my better ideas, but I'll just expand on some of them.

The first thing I'd like to do is throw my firm out there for a bailout from the government. I think a billion dollars. I'm cash-flow positive, but I think I can do a lot with the money, including throwing one hell of a New Year's Eve party. So, hopefully the money will start coming in.

Cloud comes into its own

Number one is that the interest in cloud computing, which I have been focusing on in my career, at least for the last eight years, is finally going to come into its own, like everybody has been saying here. That's rather obvious at this point.

As far as what I can add to what's been said so far, what we're going to see in 2009 is a lot of startups, specifically some cloud-computing startups. You're going to see even more around what I call "cloud mediation." That is guys like RightScale, and a few other folks in the space that sit between you and the major cloud providers. They basically mediate issues around data semantics, performance management, load balancing, and those sorts of things.

One thing that's a big hole in the cloud computing movement so far is that most of the solutions out there, even the database solutions, are proprietary. They use different APIs, different interfaces, and different sets of standards. It's going to be a play for a lot of companies to get in there and provide more reliable infrastructure in and between these various guys out there.

I'm aware of one startup a week, and they're coming in through the funders, not necessarily through the entrepreneurs, which is unusual.

The links to social networking will be there. They're not going to be quite as pervasive as everybody thinks. Social networking is going to have its place, but once we figure it out, it will be, "Okay, yeah." It's going to have its value, but we're just going to move on as far as this revolution goes. I don't think that's going to happen in 2009.

People are going to use it as a marketing opportunity, just like they used email, Web sites and those sorts of things, and now blogging opportunities, but eventually it's just going to fall into place.

There will be a huge explosion in the rogue cloud movement, as you mentioned, Dana, and also the platform-as-a-service (PaaS) space. The architects and CIOs out there are going to be scrambling around trying to figure out how to place governance around that.

Everybody is going to be building applications, typically using free platforms like Google App Engine. They're going to start launching these things into production, and there is going to be no rhyme or reason around how they fit into the existing infrastructure. That's happening now and it's going to happen more in 2009.

In switching gears to SOA, there's going to be a larger focus on inter-domain SOA technology. The focus will still be on the short-term tactical and the ability to provide quick value in the SOA space to justify it, so you can get additional funding.

As we start building these things, people are going to look at the departments that are implementing their SOA projects and try to figure out how to bind these things at an enterprise level. I call this the micro domain versus the macro domain.

Technology doesn't scale typically to that point, as people are finding, and it's going to take a different set of technologies and a different set of architectural skill sets to solve that problem.

On the downside, the jig will be up for poor SOA technology out there. Guys who haven't been able to get acquired or haven't been able to hit that inflection point and are still stumbling along -- typically making $2-$5 million a year and burning about that much in cash -- are going to eventually just going to have the plug pulled. And, 2009 is going to be when it's going to happen. They're just going to run out of steam.

We have a few of them right now. Ultimately, they're going to have lots of cuts, start hemorrhaging cash, and they're just going to go out. Some of them may be bought on the cheap, but the majority of them are just going to shut their doors.

Decline of the SOA buzzword

Finally, the SOA buzzword out there is going to diminish in relevancy. I'm talking about the buzzword, not necessarily the notion of SOA. SOA predates when the buzzword was created, and it's going to postdate when the word "SOA" was created. It's going to morph into different things, and the cloud computing movement is going to get into it and define it in different directions.

Enterprise architecture had a chance to get in there and figure out how SOA relates back into their world. They're been fairly successful in some aspects of it, but they have been too slow in moving. The whole SOA movement is going to be more defined by the cloud. That's good for me and probably for everybody on this call.

Gardner: You predicted a couple of years ago, Dave, that SOA would get subsumed into enterprise architecture. I assume that's what you are talking about?

Linthicum: Yeah, that's what I am talking about. Most SOA is going to get practiced in '09 and '10, at least the new stuff, in the cloud-computing movement, even though it’s still SOA. Basically, It's going to encompass cloud resources. Enterprise architecture will ultimately morph with SOA, and they'll become fundamentally the same concept.

SOA, which has always been an architectural pattern under the domain of enterprise architecture, will be subsumed by enterprise architecture and will be an architectural pattern under enterprise architecture. But, we're not going to be talking as much about SOA in '09.

Gardner: Just one quick follow-up. In terms of startups, you don't seem to think that there is going to be much funding left, no IPOs to speak of. What's the business model for these startups that you're seeing, the ones that can take advantage of PaaS with low upfront costs? How do they get funded? Do they need funding? And, what's their end strategy as a business?

Linthicum: They do need funding, but they don't need as much as funding as a company a couple of years ago, just because of everything you can get on demand. The strategy for the business is basically to glom onto the cloud-computing movement.

Some of the larger enterprises out there, some of my clients who are moving into the cloud-computing space by leaps and bounds, are realizing there are huge holes in the area, such as monitoring, event management, security, data mediation, all these sorts of things that aren't built into the larger cloud providers out there.

They have an immediate demand right now, a pent-up demand that's being created by the desire to lower cost, and driving a lot of these enterprises out into cloud computing. They're seeing these holes, and they are looking for solutions to make these happen. Both the entrepreneurs and the funders have realized that these things exist, and they are scrambling around trying to get them up and running.

As far as funding goes, it doesn't take that much to get a company, the assets, and the infrastructure up and running. Most of these solutions you will find will be leveraging on-demand platforms themselves. So, they'll be coming out of the cloud, providing services to clouds.

Gardner: They might actually find some engineers to hire from all those other startups that went away.

Linthicum: There are a lot of them on the streets right now.

Gardner: All right. Mike Meehan, there must be something we've missed so far.

Meehan: I don't know if there's anything you really missed, but I am going to pretend like you have and try to get some stuff in there.

The first three have to do with the economy, because obviously everybody is dealing with what we expect to be a down economy.

Rise of the 'Yankee Swap'

The first one is going to be a blast from the recent past. If everybody remembers back in 2001, when that recession hit, all of a sudden you could buy wonderful amounts of gear on eBay for next to nothing. I remember talking to one guy who was smiling like a Cheshire Cat, because he had replaced $45,000 worth of Unix with $500 worth of Linux. I think you are going to see a lot of that.

People are going to be shutting down data centers. That's going to cause a glut of servers and storage gear and network gear, and you are going to be able to get it cheap and affordable. That's going to hit the storage and network and server companies.

New sales are going to be tough to come by, because you're going to be able to get previously owned gear at affordable prices.

Gardner: So, a great disruption to the existing channel then?

Meehan: Exactly. It's really going to hit the channel vendors. CIOs are going to be able to come in and say, "Hey, look, I'm genius. I bought all of this stuff for next to nothing." And, there are going to be other CIOs who come in and say, "Hey, you know what. I was able to get some money by liquidating our assets." That financial pressure is going to affect everybody in the hardware market.

Gardner: They use to call it a Yankee Swap. Didn't they?

Meehan: Yeah. I think you are going to see a big international Yankee Swap. So that's going to be out there.

The next one is license wars. The CIOs are coming in, they are going to be asked to cut budget, and there is only so much flesh you can cut out before you have to deal with that maintenance license budget. I think every company in the world is aware of the fact that they pay more in licenses than they want to. They have always theoretically wanted to lower those costs. The pressure now is going to be too great for them to not consider options.

This is going to be great for open source companies, which are going to be able to come in and say, alright, you don't have to pay me a rolling license, here is my support cost, see how much its going to lower your license.

It is going to be bad for Microsoft, because again, to a degree they are becoming commoditized across their portfolio, and that's going to hit them right in the breadbasket.

Gardner: Do you agree with me that in hindsight the fact that Vista didn't live up to its potential is really going to hurt them?

Meehan: Absolutely. There are still companies out there working on Windows 2000, and those companies are going to be looking to switch, that they haven't gone to Vista just makes them a free agent. And this is going to also apply to Office.

Gardner: Whoever that architect was on that Vista project, he's fired, right?

Meehan: I think he's long gone. I think he is running the charitable foundation. They not only missed it, but they reinforced every negative perception of Microsoft when they came out with Vista: The inability to meet a product deadline; the security flaws that have been long associated with Microsoft; you need a zillion patches just to get it to work and do basic things.

Everything that they were supposed to have addressed, they failed to address, and then they reinforced that. Now, companies are just sitting there asking, "Why am I paying this much money for bad software?"

Bad year on the sell side

Gardner: So, it will be a really a good year, if you are a negotiator on the buy side, but a terrible year if you're on the sell side.

Meehan: I'd think so. This should hit some enterprise resource planning (ERP) vendors too. Anybody who can sell SaaS in the ERP market is going to be doing better. I think you are going to see some erosion on the SAP and Oracle side, as far as enterprise apps go.

"Make my life easier or go away." That basically means, users are going to need productivity and ease-of-use integration. You're going to see those in requests for proposals (RFPs). If they're not stated explicitly, they will be there implicitly.

Referring to SOA projects, for example, don't come in and tell me how much work I'm going to have to do to make all of this come together. Come in and tell me how this is going to make my life easier on day one. The companies that can deliver that will be the ones making the sales. The ones who are telling you that you're going to need to do eight months of work to get this up and running are going to be pushed to the back burner.

I really think that's the lure of the Web-oriented stuff. I take issue with the notion of WOA, because I don't necessarily buy into the architecture portion of it, but I do buy into the notion that it makes your life easier. It makes things easier to do. If you are a developer, it can get your stuff up and running quickly. If you can do that in some sort of organized governable fashion, then go with that.

What you're going to see in a lot of the SOA projects out there in particular is, "All right. Make it easy for me to assemble an application. Make it easy for me to reuse my assets. Make it easy for me to modify my existing applications. Make it easy for me to integrate different applications and even information between different divisions of my company."

Gardner: When you say "make it easy," are you talking about governance?

Meehan: I'm actually just talking about the mechanical process of doing it. You almost want it to be governable on the fly. What you really want is that you don't have to dedicate too much time and resources to undertake these functions. Users aren't going to have that much time or that many resources.

For example, imagine I'm a financial-services company and I've picked up a good loan portfolio from a distressed corporate loan company that had to sell their good loans off, because they were distressed, because they had made bad private loans. I got a good package of corporate loans from them. I need to integrate that quickly into my system, otherwise I am not going to be able to effectively govern that. I'm also not going to be able to effectively create the future programs around those customers, which is what I am looking to do.

So, how quickly can I do things now, as opposed to how thoroughly can I do things? You're going to want to be thorough to an extent, but really it's going to be speed to market and speed to end of project that's going to be a determinant in there.

Telecom shakeup. The U.S. government is going to start treating telecom like its our national road system, and you are going to see some serious investment in that area. That's going to become one of the key points in the economic stimulus package that you're going to see.

I also think you are going to see European telcos begin to encroach, either through acquisition or just through offering services into the U.S. market.

The last one, HP buys Sun. Somebody is going to get bought this year, somebody fairly big. I'm saying HP is buying Sun.

Gardner: They don't need to buy them. They can just replace all their servers in the marketplace.

Meehan: Basically.

Gardner: JP Morgenthal, you're up. The predictions swan song. We must be missing something?

Morgenthal: The funny thing is, I have had you on mute, listening to everybody, and struggling, because while this was going on, I had a visit from my media-services-in-the-cloud provider. He had to come set up my new entertainment in-the-cloud service box. We still need people is the point there. So, I found that very interesting and humorous to be going on when everyone was talking about clouds.

Age of reformation

Gardner: You're talking about the cable guy?

Morgenthal: Exactly, the cable guy. The cable guy was here setting up my TiVo box. I'm going to preface my five by saying that I see we're entering into a modern age of reformation, and there are some really interesting things that are going to start occurring this year, moving forward to 2012. I know. It's my own prophecy, and it's out there, hanging on a limb.

My first prediction is that we're going to see a greater focus on the business process. Not business process management (BPM) per se, although initially people will target that thinking they are doing business process, but eventually they will get it.

I think SOA is dead, and I believe companies have no stomach for IT initiatives that cannot immediately be attributed to a value. They're going to do some small-scale business process re-engineering, they're going to get tremendous value from it, and they are going to get it.

They're going to see that simplification is the way to go. Why are we doing all these complex things -- this hooking to that, hooking to this, hooking to that? I can just go into this one box and get everything done there. I don't care that it's not sexy, okay.

The age of disposable computing is here. We have had disposable electronics, disposable cars, and disposable appliances. The age of disposable computing is here.

Number two: The backlash of social networking. We're just on the precipice. Everyone is getting into it, having a little fun. Certain ones of us are on the leading edge. We're already getting bombarded and tired. We're already fried and overloaded from these social networks. The new people think it's a great new toy.

Give it a couple of years and you are going to see a tremendous backlash. You're going to see a rise of firms that will get paid to get people off the grid -- people who made big mistakes in thinking they were having fun during their early social networking experiment.

Gardner: This is sort of like tattoos, but in the cloud?

Morgenthal: Exactly. Angelina Jolie has got to get Bobby off her butt, and it's going to cost her. We're going to start to see that. We'll see the real backlash come into effect in 2010, but we'll start to see forms of it in this coming year.

Third, the pain from the economy is going to impact the open-systems market. We're seeing the rise of what I call the "anti IT." You hit upon that. You read about people reaching into petty cash, doing things on the cheap, finding other ways to get things done.

The one that's going to be the biggest impact is that people are treating open source like free software. That will destroy the open-source market for sure. It's the death knell. It's the stake in the vampire's heart.

People don't get it. I remind every one of my customers of that, when I talk to them, and they ask about an open-source solution. I've got to put my warning out there. Open source is not free software. You're either contributing dollars to the team that's doing it, or you are contributing your time and effort. It's not free software. You just don't take it and use it. That will be the death knell for open source for sure.

Gardner: Wait a minute, a death knell for open source or death knell for commercial open source as a business model?

Morgenthal: That's a good question. I won't differentiate at this point, because I'm looking at it from the perspective of the event horizon, where people are treating it like free software. There is no free lunch. Somewhere it's going to take hold. There's going to be a lack of support or a lack of desire to continue this thing, if people are abusing the system. It happens all the time. Nothing will drive greater abuse of open source than a bad economy, where there are no dollars.

Gardner: Okay. What else have you got?

Morgenthal: Number four: the millennial workforce is starting. This is going to change everything, and it's starting to already. These people have attitude that I haven't seen in a workforce since marketing people came out in the dot-com era.

They definitely feel like, "I want my toys. I want to be able to use my phone at work. I want to use my computer at work. I want to be able to access my sites at work." I see companies dealing with this issue in a unique way.

Their attitude isn't, "If you want a job, then you have to deal with it in our way." It's, "I'm scared. I don't know where I am going to get my workforce for the 21st Century, and I don't know how to deal with these people." Their first inclination isn't to push back with the old adage and the old way of talking about it, saying, "Hey, it's our way or the highway. We've got the money." It's "Okay, what do you want?"

This is going to really change things. How? It's yet to be seen, but clearly the introduction of a much more mobile force, more telecommuters.

Gardner: Most of us.

Morgenthal: That's a lifestyle choice. Yeah, it's pretty interesting. The millennial workforce is going to change things dramatically.

Shift in patent landscape

The last one is that there's a big change coming in Digital Rights Management (DRM) and patent and copyright. It's being lead by this initiative out of Harvard with the Recording Industry Association of America (RIAA). RIAA may have just started a war for everybody in the industry who has any copyright or any patent infringement suit. The judge in case said, "All you people, you big companies with big lawyers and big money, are taking on these poor little schnooks, and it has got to stop. They are coming in here and they don't even know what their legal rights are."

Gardner: Do you think this what Nathan Myhvold is up to?

Morgenthal: I didn't see his name associated with it. It was actually a Harvard law class, I believe, represented by a Harvard law professor [Charles Nesson], backing it. They're representing it as unconstitutional. So this case could be landmark for DRM, copyright infringement, and patent infringement.

Gardner: So, the basic message is kill all the patent trolls.

Morgenthal: It could be, and it would have a tremendous impact going into the potential for a startup economy. Dave talked about the startup economy, where downtime is a great time to start a new company and a great time to get out there and get your technology done early.

Landmark cases like this will do a lot to further the opportunities of these firms to go out there and build something without worrying, "Am I going to get taken out by Microsoft? Am I going to get taken out by Apple? I can't afford that." It's really interesting what could happen, given the cases like this are now falling on the side of the small guy, and not on the side of big companies.

Gardner: Right. Big companies were the victims of the patent trolls, now they are becoming patent trolls themselves.

Morgenthal: Yeah. They're hiring companies to go eat these things up, and then they are going after the small guy. We had multi-million dollar lawsuits over patent infringement for technologies that people hadn't even built or owned. I really think that the greed of Wall Street is also going to see that backlash, and it's going to lead to more of the same, or at least help those cases significantly.

People who have made big money pillaging the system over the years, in the age of reformation, are the ones that are going to get hung in the next two to three years.

Gardner: We're just about out of time. Let's go quickly down our list for any last synthesis insights.

Jim Kobielus, senior analyst at Forrester Research, thanks for joining. What's your synthesis of what you have heard?

Kobielus: My synthesis is that we are living in a very turbulent and volatile time in the industry. Things are changing on many levels simultaneously, and a lot of it will just be hammered by the recession. Approaches like cloud, social networking, and everything will be driven by the need to cut cost and to survive through fiscal austerity for an indefinite period.

Gardner: Tony Baer, senior analyst, Ovum, what's your takeaway?

Baer: It's hard to know where to start, but if there is one way to look at, it's back to basics. There are a lot of complex issues, and I think it's all going to be resolved locally, which in the long run, is going to present a huge governance challenge.

Gardner: Brad Shimmin, principal analyst, Current Analysis, what's your current analysis?

Shimmin: Currently, I'm thinking that the millennial generation and the down economy are converging like a perfect storm to wipe away what we have known for the last 10 years, and then ushering either perfect terror or a great new economy. I'm not sure which yet.

Gardner: Joe McKendrick, independent analyst and blogger, what's your toxic IT prediction?

McKendrick: We're definitely at a turning point. I agree with what everybody is saying out there about growth mode. Dana, I like your observations about the rogue or the shadow IT. You're going to see a lot more of that. It's been predicted for quite a few years actually that IT is going to be less of an entity onto itself and more of a function that's built into business units.

Business people are getting more involved in IT. Business people are getting more savvy about IT. JP talked about the millennial generation. They're very savvy about what IT and the power of IT can provide. We're going to see less of IT as a distinct area of the business and more part of the business, an enabler of the business. This year is going to accelerate that.

Gardner: Dave Linthicum, founder of Linthicum Group, what are you seeing from what you have heard and what's your net-net?

Linthicum: I think it's going to be one of the most exciting couple of years in IT. Just by sheer cost pressure, we're going to have to get down to simplifying and solving some of these issues, and not just playing around with technology. Things are going to get more simplistic, more effective, and more efficient than they have been over the last 20 years of building layer upon layer of complexity. We just can't afford to do that anymore, and now we are going to have to go fix it.

Gardner: Mike Meehan, senior analyst, Current Analysis, any additional takeaways?

Meehan: There's a lot of panic out there, and in keeping with one of the great holiday traditions, I think the winner is going to be Mr. Potter. The future belongs to warped, frustrated old men.

Gardner: He's buying up all those mortgages for pennies.

Meehan: Exactly.

Gardner: Alright. JP Morgenthal, one last go. What do you see from what you have heard on a high-level takeaway?

Morgenthal: Opportunity and fear -- and it's a matter of which one is stronger. I have no prediction as to which will win out. They're both equally powerful right now, and it's going to be, as Dave said, exciting to watch these two clash and see which one wins.

Gardner: I guess my takeaway is that we don't know how long it's going to take, but we will come out of this period. Survive anyway you can, but be mindful that on the other end it's going to be something quite new, with a lot of opportunities, and it's going to look a lot more like Internet time, and the clicks will mean more than the bricks.

Well, thanks all very much. Have a great holiday season. Please take a few days off and relax with your families.

I also want to thank our Charter Sponsor for the BriefingsDirect Analyst Insights Edition podcast series, and that is Active Endpoints, maker of the ActiveVOS visual orchestration system.

This is Dana Gardner, principal analyst at Interarbor Solutions, thanks for listening. Have a good year in 2009, somehow.

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Edited transcript of BriefingsDirect Analyst Insights Edition podcast, Vol. 35,on how analysts see cloud computing, SOA, the economy, and Obama in 2009. Copyright Interarbor Solutions, LLC, 2005-2008. All rights reserved.