It used to be the case that hosters and providers of online services provided their products in neatly defined buckets. They called them “Product options” but in reality it was simply a way of defining price points and keeping up with (or overtaking) the competition who were all doing the same thing.

With “Cloud” or online service consumption becoming more mainstream and business focused, this approach is now coming to be seen as a limitation to customer adoption. If someone needs a RAM heavy but CPU light environment, the chances are that the ‘bucket shops’ don’t offer such a beast, again in history this would have been a “bespoke build” and a premium charge would have been applied for the privilege.
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Last week saw Microsoft’s annual get-together of hosters and partners from around the world in Bellevue, Washington. A move of venue up the road to the Hyatt Regency was, in my opinion, a good move as everything seemed a little more accessible and open than previously.

I had been invited to take part in a pre-event workshop for solutions architects which was slated to provide some more technical depth that the other presentations which would take place over the following 2 days. And some of what was shown was actually pretty good. The Orchard project shows that Microsoft are starting to understand the demands of the consumers of services and aims to deliver a content management system based on MS technologies. In particular the use of SQLite as the database store is interesting as this in-process data-store means no more mucking around with database creation and management (probably the only sticky bit of using WordPress for example). The ‘consumer’ focus is also backed up with an entry level site-creation toolset which I would describe as Visual Studio with all of the complicated bits stripped out. This sounds like it’d be a bad thing, but the demonstration I saw was both accessible and seemed very intuitive.

This latter aspect has been achieved by bringing through some of the new Intellisense features which have been brought into both this product and the new VS 2010 product suite. I’m no dev, but this seemed to make the drudge elements – constructing function structures etc – and automate them, allowing the dev to simply plug in the relevant pieces. The final  and most interesting piece – for service providers – is the MS-Deploy endpoint. This IIS extension allows for devs using VS (and the new lighter product) to publish packaged applications and databases up to the server environment. If you are pitching at web developers then this is something your systems MUST be providing.

Video was a big topic too. We are apparently seeing a huge growth in video delivery and consumption over the ‘net – 180% over the last two years with 80% of all ‘net users watching video – and  this is predicted to continue. Service providers should certainly consider video publishing as a potential product, Expression Encoder is free to download and links directly to IIS for simple publication. The guidance here is pretty clear, provide a publication service with a link to some free software for encoding and publishing and get on board sooner rather than later.

Storage has historically been a sticking point when it comes to video delivery but the new paradigms enabled by the XXX-as-a-Service solutions means that everyone – including Service Providers – can take advantage of on-line, “Cloud” storage. After all this is the perfect example of utilisation, if I need the storage I pay for it and it’s provision becomes a direct, measurable, scalable cost for the the extended service I’m providing out to my customers. It starts getting very easy to bring products to scale when you are simply using a massive platform in an on-demand basis.

The rest of the workshop was less engaging however. A technical dive into SharePoint 2010 revealed that installing and provisioning a multi-tenant environment is still not as slick and smooth as it should be and some of the really nice feature of SharePoint (file-system storage of large binaries for example) are dependent upon features available only in the Enterprise edition of SQL server – this is a significant cost per month on SPLA and isn’t something which a lot of SP’s will stump up. This position runs contrary to Microsoft’s general position which is that SharePoint is a solid platform for website creation – cost is ALWAYS an issue when we talk about web-sites.  The final session covered Windows Server Futures. This actually covered Windows Server Pasts and was principally all about what was done in Server 2008 / SP2. The NDA elements regarding Windows Next were so generic that they could have been applied to almost any product produced, ever. Sorry this was rubbish!

Overall it’d have been nice to get a little bit more architectural information throughout the day. We’re about building systems and solutions and there was nothing there to support any thought processes in that direction. I did mention this and there was an acknowledgment that this was a missing element in the day. WIN!

The Summit proper was principally a set of keynotes and, for me, fluff. Yes, we know that on-line services are a big thing, yes we know that Microsoft are “All in” with the Cloud. Of course Microsoft still see hosting partners as strategically important, as a revenue stream SPLA is pretty significant! What we are seeing now though is that, rather than cookie-cutter technical solutions the guidance is now around value differentiation. I’m very happy about this as it vindicates what I’ve been belting on about for a couple of years now, if not longer.

The bottom line?

Microsoft ARE committed to on-line delivery of services. See BPOS, see Office Live, see Azure. They are also committed to spreading the use of the Microsoft stack to deliver services through their hosting partners, what’s changed over the last 18 months though is the method through which this commitment is being delivered. Gone are the end-to-end hosting solutions of times past and in their place are products and services which are designed with ‘Net delivery in mind and open-sourced examples.

The result is that many of the smaller hosters who relied on the plug-and-go solutions are now faced with a significant choice, if they want to continue and advance their solutions they need to start investing in the development and differentiation of their services – otherwise they may well wither on the vine.

One of the nice things about the job I do is that I get to see pretty much all aspects of the business we call hosting. Recently I’ve come across a new stratification taking place between those organizations who are happy to be ‘hosters’ and those who want to move away from that sobriquet and reclaim the title of Service Provider.

This is interesting in a number of ways, chiefly for me is that ‘Service’ is being seen once more as the route to market for those wanting to extend and expand their solutions and offerings. Part of this process is indeed moving away from the ‘selling by numbers’ model of recent years which, as you probably know by now, is something I’ve been banging on about for ages now!

Clearing the fog from the “Cloud”

The new, so called, “Cloud” technologies are possibly the most disruptive force in the market today but it’s important to remember that this is not new. The delivery and consumption of services over the internet is something which we’ve doing for many years, think here of email and web/data services for example.

Recently the definition of Software as a Service, or SaaS, has refreshed interest and promoted internet delivery into current thinking, the BPOS solution from Microsoft and Google’s Apps added momentum to the story but have also caused some increase of confusion in the market.

“Cloud” is almost too generic a term to use and both consumer and suppliers alike run the risk of mis-stating and missing expectations. As a potential consumer on on-line services, it’s important to understand what your needs really are and how online services can be used to support your business and integrated into your current environment where appropriate. As a service provider, it’s key to understand what your market and customers need and want, be able to communicate in common business, not technical, terms and build the right kind of infrastructure to provide those services backed up with real, substantial Service Level Agreements.

There’s no shame in not knowing and seeking that knowledge through some informal conversation or more formally in a workshop setting where your business needs and strategy can be discussed and a plan put in place (you might not need to move online!). As a service provider it’s also important to know how the different technology platforms out there are going to deliver the services you are planning, and whether there’s a differentiator that you can bring to put you above the crown or in your own market space.

HMC and the future of Hosted Exchange

With the announcement last year that HMC4.5 was to be the last “Solution” provided by Microsoft to Service Providers for the delivery of services based on Exchange Server, Windows SharePoint Services (WSS) and Offices Communications Server (OCS) as a package, many were left wondering what the future and the release of Exchange 2010 was going to bring.

Microsoft’s statements on the subject were pretty clear – 1) If you have the resources and customer-base, build a solution with Exchange 2010 natively. Offer this both directly and as White Label solution for others.  2) Find a good White label provider and resell their solution 3) Sign up with Microsoft and resell BPOS.

These decision points were predicated purely on mailbox numbers and inferred ROI on the technology platform – currently figure is circa 5000 mailboxes for ‘viable’ solution – but unfortunately it ignores usage of HMC platform as a value-add service supporting other integrated services – the suppliers of which may be more than happy with 2-3000 users of such a platform. For those wishing to offer Microsoft CRM on a hosted platform the future is even more confusing given it’s requirement of HMC as a base!

For these Service Providers there seems to be no ‘solution’, but there is always an answer and I would like to offer a lifeline. If customer ownership is important or you have an integrated solution set or you simply need to know what to do with your HMC 3.x / 4.x platform, please let me know. Register here on the site and drop a comment (they’re all moderated so nothing will be made public) as, for a limited time, I can arrange for a free 1/2 consultation call to discuss the technologies and options for you. After the call you’ll receive a summary document detailing what was discussed and describing some possible ‘next steps’. What have you got to lose… really!

Get your datacenter Dynamic!

“Change brings opportunity” a phrase used so often it’s almost clichéd. It remains true though that the introduction of new technologies provides considerable opportunity for savvy Service Providers to delivery new and exciting services out to an ever growing and hungry market place.

Key to the success of these services are the integrated solutions underpinning them which allow for service delivery AND consumption to be truly flexible, scalable and on-demand

Virtualisation as a solution is capable of delivering so much more than the simple VPS’ of times past, the technologies themselves are great but are not necessarily products to be offered out to the wider market. The key to success is to use the technologies well in order to allow customers to move themselves easily up the value chain. Never forget that increased ARPU (Average Revenue Per User) is easier to gain and maintain than increased customer acquisition!

It’s also important to understand that today’s technologies, such as Microsoft’s Dynamic DataCenter toolkit, allow Service Providers to start small and to scale easily as their customer-base and service portfolio grows and develops.

I mention DDC specifically here as I’m aware that there is support available for those Service Providers who want to adopt this kind of platform. The support is in the form of  workshops which aim to provide not only knowledge of the toolkit itself, but also some key direction and guidance on how services can be delivered and also in the form of assistance for the deployment of Proof of Concept platforms allowing products and services to be built for real.

If you are considering adopting a dynamic platform you could do worse than contacting your Microsoft Account Manager or HSS and finding our if there are workshops being run in your area. Or let me know your interested and I’ll see what I can do.

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The US FTC (Federal Trade Commission) have announced that they are to undertake a series of investigations and discussions with Industry organisations with regards to the concerns over data security which “Cloud Services” raise.

This move IS to be applauded, especially when more and more personal and potentially dangerous information is put onto the servers and infrastructure of increasingly megalithic organisations like Microsoft and Google.

Data residency concerns are nothing new though. For as long as I have working in the hosting industry, organisations have been concerned about ‘where’ their data is being kept. It used to be a source of frustration for hosters that they could not attract customers – of any significant number of value – outside of their immediate geography. “Why do they care?” we’d ask, “it’s the internet, it doesn’t matter where it is!”
But of course for a lot of organisations it really does matter and, certainly in the UK, it has become a key selling point to have “UK Data-centres” on one’s web site, thus ensuring an elevated level of confidence in the customer with regards any data-protection, compliance or other legal or financial issues which they may face.

It does seem a shame though that issues such as this only get significant press when the US are involved (not that I’m complaining here!), as in Europe the cross-border issues of data residency are potentially much more acute. In fact if we look back to 1998, the EU Data Privacy Directive started to look at this sort of thing. There was an announcement, but at the time the whole Sarbanes-Oxley thing was happening too.

We SHOULD be concerned about where our data is living. Not only corporate / commercially sensitive stuff, but simple things like addresses and phone numbers. We all know that there are certain areas on the globe where we simply don’t want ANY of our information to end up, other wise we’ll be aggregated onto someones call list and, at best, be spammed to death or at worst have credit card number sold and abused.

I hope that the FTC’s remit and scope is regarded and considered globally too, we may be talking about national data borders but it’s an International network and the results simply must have a global view. We risk Jingoism here and that’s never going to be good. Look at China’s (and others) restrictions on Internet traffic and see the damage which has resulted in it’s profile. Tiger economy yes, Online powerhouse – not for the forseeable future.

I’ll watch with interest over the next weeks and months.