Monday, July 06, 2009

Cloud Computing Part Three - Moving to The Cloud

I gave my thoughts about What Cloud Computing Looks Like and Finances in The Cloud.

The biggest question -- The question I expect people to ask for the next three years -- is "How exactly do I make the move to The Cloud?"

As with any major change, the first thing you need to do is to make a plan. That means to work Cloud computing into your business plan. (If you don't have a business plan, start working on that now.) You can start with the line card I outlined in Part One.

Let's look at the items you'll be selling.

Please note that I haven't worked with most of these companies yet and no mention here represents an endorsement. Blah blah blah.

Web Hosting is the easiest and most mature set of products. There are many long-standing companies with a lot of experience here. These include familiar names such as Hostway and Rackspace. There are also hundreds of companies you've never heard of, some good and some bad.

You have to figure out who you want to do business with. More on that in a minute.

Hosted Servers (Exchange, Sharepoint, etc.). Again, this is a pretty mature market. Lots of good companies to work with. And again, lots of companies you need to avoid. It's very important to find a good solid partner who won't disappear or become overwhelmed as this market explodes.

Hosted Desktops are a much newer market. With Virtualization AND good management tools just coming to maturity, a lot of people are going to get into this business. That means a lot of service resellers are going to find themselves hooking up with losers, getting into trouble, and looking for a more stable partner.

There are a few experienced companies in this area, including LeoStream and NetworkLondon.

Hosted Phone Systems are another somewhat-mature market. I say somewhat mature because there are some very mature providers, but lots of mediocre providers with immature tools who have been in the business for a long time. Here I will make an endorsement for the provider we resell:

The other obvious choice is to sell Asterisk at your colo site or at the client's site.

For other telephone options, please check out the forums at

On-Premise Cloud services (at your colo, or at -client). This begins to get cutting-edge. You could do this with mature terminal services, RDP, or Citrix. But a true on-premise "cloud" requires a new generation of technology. That means something like the Zenith Infotech service or a roll-your-own Virtual Server environment from Microsoft, VM Ware, Citrix, or others.

Colocation Facility: If you're going to offer "your" cloud services, you'll need a colo. We are lucky to live in Sacramento, a place where many Bay Area companies have their facilities or backup facilities. Since we get essentially no earthquake activity, the sites here are very stable. Because of the demand, the bandwidth is available from any carrier and the price is good.

When you investigate a colo, ask about expansion and the cost to move from 1/2 rack to full rack, what their cage prices are, etc. Setting up in a colo is sometimes a lot like telephone service: there are a dozen nuisance fees that add up to a hefty chunk of change before you're done. "That price includes electricity, but there's a $120 charge to set it up." Makes you wonder, how many people buy a rack and don't use electricity?

Software Choices. Once you get going with virtual machines, hosted systems, etc. it is very important to use software that allows you to buy licenses only when you need them. As you deploy desktops, you'll need to add licenses for server cals, MS Office, anti-virus, etc. Microsoft SPLA is now available through Ingram Micro. Get on the Trend Worry Free AV program (or another month-by-month program of your choice).

As I mentioned before, the economic model is to buy and sell exactly what you need each month. So you need programs that allow you to do that. Some things are not yet available in that model. This includes all-important backup software. But be patient. They'll all come around.

A Lot of Work

Wow that looks like a lot of work.

Yes it is. And you're going to have to do it eventually, so I recommend you get going. Remember that there are totally inexperienced people who "get" the vision of cloud computing and they're signing up today and building these systems without fear -- because they don't know anything about the old way of doing business. They don't have concerns or fears because they never installed servers into client offices. They don't understand such a business model.

Don't be paralyzed because you have experience with the old model. That experience will serve you well.

Remember: Your experience can't limit your choices.
Experience represents the lessons you've learned along the ways.

Only you can limit your choices, and they should never be limited by your past.

Your experience gives you the tools you need to be more successful in new adventures than the people without that experience.

Here's an important industry publication: The Web Host Industry Review: Check out the web site and magazine. In addition to a great education, you'll get an introduction to some of the service providers who are designing cloud services for you to resell.

And PLEASE don't forget that you need a system that is as automated as possible. Whenever possible, try to partner with services that allow you and your customers to request services over the web and click-click-click, it happens automatically. The more labor you spend making this happen, the less profit you'll have.

Please post your favorite services, tools, partners, endorsements, etc.

Vendors: Feel free to post your tasteful notices in the comments. Just make sure they're related to cloud computing and not bodily implants or foreign pharmaceuticals.


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  1. Love your insights. You advice from afar has helped me grow my business.

    Phil F.

  2. Anonymous5:08 AM

    I enjoy your thoughts, especially when you challenge vendors or service providers. What do you think of Flex-Pointe (HaaS) from En Pointe Technologies?

  3. Little: En Pointe seems like a full service MSP that provides HaaS to their clients. Not sure there's a cloud component here.

    I only browsed their web site briefly.

    Good client-focused site.

    And the concept of technology as a service includes HaaS.


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