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Cloud computing brokers are doomed, Savvis exec says

The chief at cloud hoster Savvis says cloud computing marketplaces won't fly in big IT shops. Not everyone, however, agrees; the answer is naturally more nuanced.

PALO ALTO, CA -- Enterprise customers have no interest in cloud computing marketplaces and they are destined to fail, said the president of Savvis Inc., at the launch of the company's global cloud alliance program.

There won't be so much price pressure if we add value through partners.

Jaywant Rao, vice president of global alliances for Savvis

Such marketplaces match buyers and sellers of distributed computing power. They promise to give cloud service providers an equal shake by providing a level of transparency on price, and they assume that price is the primary reason a user will switch to another service.

Bill Fathers, who is president of Savvis Inc., called such marketplaces "fluffery." He said cloud aggregation services that provide a portal where an enterprise might choose a type of cloud service based on price, like a travel customer might use Orbitz to book a flight, will fail.

"We've learned that it's about developing deep relationships with one cloud platform provider," Fathers said.

Savvis executives said there are 325 large enterprises that run applications on its cloud computing platform, such as Nokia, Deutsche Bank, Bank of America, Credit Suisse and Coca-Cola.

But one expert has a more positive view of these marketplaces. Daryl Plummer, an analyst at Gartner, has stated that by 2015 "cloud service brokers will be the largest revenue growth opportunity" in cloud computing and that "20% of cloud services will be consumed via a broker."

Some examples of cloud computing marketplaces are Enomaly with its SpotCloud service, Berlin-based Zimory (a spin-off from Deutsche Telekom), Jamcracker and Telstra.

Gustavo Estrella, director of strategic alliances at Savvis cloud partner Cognizant Technology Solutions, said the interest among enterprises for brokerage services does exist but is not based solely on cost savings and price.

"It's about reliability and redundancy," he said.

IT organizations want multiple cloud providers to spread the risk in the event of outages, they want providers in different geographies for compliance reasons, and they want to take advantage of providers that have expertise in specific areas.

For example, he said, "Amazon is the leader today for developers and Web services."

In much the same way that enterprise IT has had a duel-sourcing strategy for data center products, it will have more than one source in the cloud, Estrella added.

Savvis executives claim that cloud computing is a high priority for many large companies and is even driving executive turnover.

"There are lots of job changes going on at the CIO level with our customers … if you are not on the path [to cloud] you should think about it pretty quickly," Fathers said.

Savvis cloud partner service
Savvis unveiled a global cloud alliance program here this week, through which partners can offer Savvis cloud services -- as well as managed hosting, colocation, network services and managed security services -- to their customers. By registering as an alliance partner, participants receive access to Savvis' assets and intellectual property.

"There won't be so much price pressure if we add value through partners," said Jaywant Rao, vice president of global alliances for Savvis.

Cloud computing is supposed to reduce the cost of IT, whether you buy it from a service provider or you build it in-house. But many in the IT market prefer the current model, which creates layer upon layer of "added value" for layer upon layer of extra cost.

Brian Doerr, CTO of Savvis, said the company will enhance its existing cloud services. Customers want many varieties of storage in the cloud for backup and archival purposes, he said, and these must all be integrated with data analysis tools.

We've learned that it's about developing deep relationships with one cloud platform provider.

Bill Fathers, president of Savvis

Helping smaller Software as a Service (SaaS) providers scale is also on the list of cloud development plans for Savvis, as well as integrating the data and processes required to access multiple different SaaS providers.

"We want to be able to knit these together and then diagnose when there is a problem," Doerr said.

Savvis is also investing in policy management and automation of cloud applications and processes around provisioning. Newer applications are infrastructure-aware, meaning that they scale up or down based on demand. But existing apps do not have that capability, so users need that scale in a policy mechanism outside the app that makes the adjustment to the infrastructure on behalf of the application. Traffic load, maintenance windows, budgetary requirements should all be codified into the automation process, Doerr said.

Cloud security services are high on the agenda for Savvis, although Doerr said "it's a problem that has no solution in some ways," referring to the idea that no matter how high a wall you build around your infrastructure, someone will always have a higher ladder to climb over it. VDI services are also in the works and will run from Savvis cloud platform.

Tailored vertical cloud offerings -- like the Elektron Cloud for financial services that Savvis has developed with Thomson Reuters -- are on deck, although this offering was announced a year ago and still hasn't launched. The companies say it will be open for business by year end.

Jo Maitland is the Senior Executive Editor for Contact her at [email protected].

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