Recently we had the pleasure to have an extended and insightful conversation with Ben Kepes, well-known cloud commentator and investor, and self-described cloud evangelist and member of the Clouderati — a group of commentators and industry experts who publicly progress the conversation around cloud computing. We discussed a range of topics related to how he sees cloud’s value being portrayed, cloud adoption and hurdles at the enterprise level, his perspectives on the industry at large, and how he sees the space developing.
This is the first of two parts. Check out Part 2 here. Let us know your thoughts on Twitter @CloudGathering.
Gathering Clouds: What drove you to become a “cloud evangelist?” What inspired you? What about cloud is something that keeps you coming back and keeps you involved?
Ben Kepes: So I run a bunch of small businesses not related to tech and obviously I’m involved in a bunch of start-ups in the cloud space, but I’m actually kind of passionate about the change that cloud can drive. So for me it’s really about enabling organizations to give benefits and give services, especially allowing SMBs to get new tools that are typically available to only enterprise-grade businesses.
GC: When you were starting to get involved with cloud from this point of advocacy, you approached it from a business perspective first, but how were you learning about it other than on the job? Who are you reading? Who are you going to for new perspectives and new information?
BK: So obviously I’m part of the loose group, the Clouderati. I’ve spent a lot of time talking with my colleagues and people like Alex Williams and Krishnan Subramanian and so it’s just a case of spending a lot of time talking about the topic with a bunch of different people.
GC: There is a split between what people understand cloud to be versus what cloud actually is. What is it going to take to break cloud through to a higher level of acceptance as the dominant IT paradigm?
BK: There are a couple things going on. Adoption overall is still pretty low, so it’ll take time before people will start using the cloud. But that is the case in any sort of nascent technology paradigm, there are always people that are using the term for marketing purposes, and obviously we’ve seen a lot of cloud-washing going on. But really it’s just about time lines – time and an awareness thing.
GC: When we’re talking about businesses adopting cloud, increasingly they are approaching the cloud as the fundamental foundation for their infrastructure. What is the value for those businesses, and why isn’t it being viewed in the same way at a larger-scale business level?
BK: Again, from an issue-based perspective, people believe they don’t have time, they can’t see the wood from the trees. From an enterprise perspective, there are a lot of concerns around security and some technical factors. And there are obviously a lot of people who feel threatened. So you put together a lot of technical, business and cultural issues, and all of those together reduced adoption.
GC: How is cloud’s value being communicated right now, and what do you see that value turning into over the next few years?
BK: I think there’s more value to be added after the fact, and so if I look at involvement with companies, as an investor that’s more and more focused further up the stack, at the platform or at the software space so I think there’s a lot of value being added there. That’s not to say that there’s no added value to infrastructure because clearly there is, but that more around service, around some geographic granularity, those sorts of things, rather than you know, specifics of innovation happening to appear.
GC: Right. And then as you just mentioned, from the perspective of an investor but also somebody who’s genuinely interested in how the business of this space is developing, what do you look for in the companies that are coming up, and who do you see right now that’s really leading the charge in terms of a progressive business model, as well as a fresh take on the technology?
BK: Sure, so… what I look for is kind of services that span a bunch of different areas of try to give it glue together a bunch of different areas. In terms of who’s done exciting things, I think that I’m pretty excited by the platform-as-a-service space. I think CloudFoundry is a very interesting play. I have some thoughts or concerns, rather, around what VMware’s intentions are with the project. But it’s some really good work being done by companies like Tier3, as service providers. I’m involved in a company called Appsecute which aims to tie all that stuff together. So that’s an area I’m pretty excited about.
GC: Focusing on the enterprise, what is the real challenge to adoption? IT is pretty well initiated to the notion of cloud, but certainly from the enterprise perspective, there seems to be way more hesitancy.
BK: Sure. There’s a bunch of different things. Vendors need to get their products more mature, and, for example, there have been issues recently with Dropbox and security. And I would suggest that without talking about specific products, there are new products out there that aren’t ready for the enterprise. So products need to be more mature – that’s the first thing. Second thing is that enterprise IT needs to stop protecting its own turf. And there’s a lot of that going on with enterprise IT people frankly feeling threatened by the cloud, and that needs to stop. There’s a real hole in terms of skills, which is surprising because every vendor in the world is using cloud as a term, and considering so many people are using cloud in their consumer lives. Most of IT people who are saying the cloud isn’t really safe or can’t be used with the enterprise are more than likely using a cloud service at home. There’s a bunch of education that could go on. So now I run a cloud education program, and I think it seems like that will help break it out, but again, it’ll take time.
GC: When the enterprise is considering cloud, they’re often hesitant because the cloud is perceived to still be too immature for the needs at scale and enterprise has. What does this mean to you, how you see this issue playing out?
BK: Well, so the problem that we have is that in-place enterprise IT has been a blocker for adoption, for agility. We’ve seen business units going around IT to shadow IT. The reason that there’s this huge panic at the enterprise right now, for example, is because everyone at X organization has been using Dropbox, and all of a sudden they realize that actually might not be such a smart move. Now, the different knee-jerk reactions have come on both sides. The knee-jerk reaction of business to just go around IT without doing their due diligence isn’t sound or proven. But also the knee-jerk reaction of IT in thinking that the cloud is dangerous is also wrong. So what needs to occur is that IT needs to be much more pragmatic in their conversations, but at the same time, cloud vendors have a role to play there. I’ve been on record previously as being critical of some cloud vendors for having a pretty cavalier attitude toward securities or toward the realities of life for enterprise IT. Any solution that touts itself as business-ready needs to be much more serious about what that means. From the other side of things, unfortunately we’ve got a situation with democratizing the adoption of IT, we’ve got a situation where enterprise customers are taking advantage of tools which really aren’t designed for an enterprise setting. What the solution for that is, I’m not sure because the last thing I’d want is to once more assert total IT control, so I’m not sure how we’ll resolve that little conflict.
GC: How realistic is the premise that in the next fifteen years, a company at the enterprise level could be 100% cloud-based? Does a cut-off exist for what’s reasonable in terms of cloud infrastructure usage? In other words, there seems to be an argument that at some point, it makes way more sense to own. And will that premise hold up as cloud increasingly gains IT market share?
BK: This is a really good question because clearly we’ve seen, the poster children of this very issue being Zynga who moved from AWS to zCloud. I think companies like Zynga are a little bit of an outlier in that they’re A) a technology company, and B) a technology company with massive scale, so I think that will very much be an outlier, and the vast majority of companies will move in the other direction, from owning to the cloud. Some of the economics will settle down a little bit, and cloud vendors will leverage their economies of in the buying cap, such that any sort of cost-advantages that Zynga has seen coming back in-house maybe won’t be quite so prevalent. The bottom line is there will always be outliers. There will be outliers that move from the public cloud back to the private cloud. There will be outliers that continue doing stuff traditionally, but in terms of where the bulk is going, the majority will move to the public cloud I believe.
GC: Is this idea that we’re discussing the limit of cloud? Is it a primary underlying friction between the enterprise and cloud adoption as well?
BK: Yeah, but only to an extent. Clearly there’s the bell curve around adoption, and the enterprise is clearly quite late in terms of adoption. But it’s no different from the adoption of fax machines through to the adoption of clients service through enterprises. It’s just a little early, and it’s been a little while since we had to integrate such a major technology at the enterprise level.
GC: So you mentioned enterprise IT operators themselves beings something of a problem to overall adoption. What’s going to convince them to stop being so defensive with regards to cloud?
BK: Sure. So to a certain extent it’s just going to happen automatically. Where the CEO and the C-suite will start to say “we need to do this, we need agility” and cloud delivers some agility, while IT does not deliver agility. So that’s the first thing. And that will happen just kind of naturally – in terms of natural attrition. There’s always the natural attrition amongst IT guys who are getting older, and they think they’ve been racking and stacking servers for 30 years, and frankly, they don’t want to learn anything new. Over time, they’ll just move to the side. But the thing that IT really needs to think about fundamentally is that cloud democratizes IT. It allows the business units to actually do the stuff themselves without IT, and so we’ve heard about “rogue IT” or “shadow IT,” which are terms to kind of describe the strength of business units enabling their own IT solutions. To me, there isn’t rogue or shadow, there is simply the business reacting to IT’s lethargy and IT’s risk-aversion. I think if IT is charged with being risk-aversion, that means it also needs to up its game significantly where innovation is concerned.
GC: There is a definite split between how IT decisions are being made now versus maybe even five years ago. But between the line of business executives and the technical staff, how does the paradigm need to change? Does IT just become a support team or are they still sort of the driver of innovation at the enterprise level?
BK: Well, in an ideal world, IT would actually become a strategic partner, and in so doing become much more aligned with the business. It would cease to be a gatekeeper. In effect IT Spends half its time gate-keeping and the other half of its time essentially being a janitor, walking around and updating Windows and Microsoft Office. And, OK, that’s belittling IT, and they do a lot more than that. But broadly speaking, that’s the case. Here’s an opportunity for IT to actually deliver what its been promising for 40 or 50 years, which is to be a strategic partner and to help an organization achieve its strategic aims.
GC: Is this Amazon’s world and are we just living in it?
BK: It’s really not. Obviously the cloud is many things. Its software-as-a-service, its platform-as-a-service and its infrastructure-as-a-service, Arguably SaaS is the most enabling of the different cloud technologies, and that’s a space that Amazon doesn’t play in at all. There are lots of great players doing amazing things there, from Salesforce to Googledocs to Xero to Vend. At the platform space, there are some truly interesting things along the lines of cloud financing, I’m thinking of Heroku. And then there is the infrastructure cloud space. Clearly no one is denying that Amazon is the incumbent, and has the lion’s share of the market. But there’s great products in companies doing other things there– I mean, we see some really interesting open source initiatives, from people like CloudStack and OpenStack, and there is a point there around avoiding the vendor lock-in you get with an Amazon ecosystem. I think I would say that’s probably 5 or 6 years since AWS has actually existed so it’s too early to say that anyone is a winner.
GC: How do you see Amazon evolving in the space? I mean, they are, as you mentioned, the dominant infrastructure cloud, but that doesn’t necessarily mean that there’s not gonna be major competition coming out of HP or Google or Microsoft even. But how is Amazon going to stay ahead of that curve?
BK: I think there’s an ongoing trend for organizations to move up the cloud computing stack. As infrastructure becomes more and more commoditized, organizations do move up the follow that trend. I guess an analogy would rest with a company like Dell or HP, who make a lot of money off of infrastructure. As the infrastructure and that hardware and those boxes become commoditized, it adds value-added products and services to supplement and help businesses make the move. So in terms of what Amazon would do, I suspect they will (and they already have staff to an extent) more broadly move into the platform-as-a-service space. But I think they’ll time their run carefully because the fact is they’ve still got some significant profits to make from their infrastructure play, and it’s probably too early to say that PaaS is ready for prime-time. But it’ll just take time, they’re really canny player, and they’ll time their market entry for when things are right.
GC: So do you then view Google, Microsoft, HP, and the other Megaclouds, do you view their moves as an attempt to gain market share, or are they growing the market overall?
BK: I think everyone is focused and should be focused on building pie rather than slicing it up. The Gartner’s, Forrester’s are all coming out talking about how big cloud doctrine is defective and is still tiny on the scale of IT spend as a proportion of IT spend– and so for anyone to battle over points of market share of a space still in its infancy is just crazy really.
GC: So then compared to the mega clouds that represent Amazon, HP, Google, etc., where are the small providers challenging those big clouds? What’s your view of who’s doing cool things amongst those small providers, and how do you see them truly differentiating their services from each other?
BK: So I think that the opportunity for small players is analogous to a small retailer trying to beat out Wal-Mart in terms of the logistic, supply chain or price. The way a small retailer can beat Wal-Mart is on service, byproviding the niche product and understanding its customers, all those sorts of things. The cloud space is no different. There’s absolutely no point for a small infrastructure vendor to try to beat Amazon in terms of scale, trying to beat Amazon in terms of price, trying to beat Amazon in terms of reach. But what a small vendor can do is build strong relationships with customers, providing better service, maybe providing some specific geographic offerings that Amazon doesn’t do. Those sorts of things are all options to differentiate, to survive when you’ve got the elephant in the room.
Our conversation continues in Part 2.
By Jake Gardner