Volume 23, Number 36 -- October 21, 2013

The i Cloud Wasn't Built In A Day

Published: October 21, 2013

by Dan Burger

IBM is building an IBM i-based cloud. You could say it's already built, but it is an ongoing project. As good as the cloud services for IBM i are, there's always work to be done to make it better. Taking a step in that direction, IBM hosted the IBM i Cloud Summit earlier this month to bring together a group of managed service providers (MSPs), independent software vendors (ISVs), and business partners who are all, along with IBM, the stakeholders in the i cloud.

The fact that there even is an IBM i Cloud Summit is an indication that this effort is ongoing and that IBM is not only investing time and money, but it is also interested in the feedback of its partners, namely the MSPs and ISVs. IBM heard the feedback, which was heavily weighted toward ironing out the wrinkles in the software licensing issues, but outside of that it seems the outlook is sunny.

"If you look at the product, there has been significant investment in the IBM i cloud," says Ian Jarman, the former IBM i product manager who has become the business unit executive for Power Systems Lab Services, but still manages to be involved in much of IBM i activities. "It's been a focus of our development priorities. The investments include PowerVM, Smart Cloud management products, and live partition mobility, which wasn't just for cloud, but it can be used. There are also significant investments from the managed service providers (MSPs) and the independent software vendors (ISVs). There are also IBM sales and marketing teams, so this is not just a development exercise.

"We have a very effective cloud solution on IBM i--from ISVs and through managed service providers. No one should be fooled into thinking cloud solutions only come from X86 environments somewhere in a public cloud."

Jarman doesn't talk about the size of the IBM i cloud. We don't know how many MSPs or ISVs have offerings, or how many people IBM has committed to the project, or what the project's budget might be. When talking about the recent Cloud Summit, he did say it was attended by a total of 65 MSPs and ISVs, representing 46 companies, and that was "probably less than 50 percent" of the MSPs and ISVs that have made investments in cloud operations. According to Jarman, "the majority of ISVs have developed SaaS capabilities and are growing their business in that area" and "many of the business partners" are developing service provider capabilities. He also mentioned the overall turnout exceeded the goal for the event.

The summit agenda included sessions on IBM's i-based cloud strategy; best practices for SaaS; technical sessions on topics such as advanced virtualization, featuring VIOS, virtual appliances, SmartCloud, infrastructure management, workload provisioning, application monitoring, security, and high availability.

To a large degree this was set up for IBM to present its tools that can help the MSP and ISV cloud community grow and manage business.

"Part of it was trying to get everyone on the same page," says Dave Wiseman, director of IT infrastructure at Connectria, an MSP. "IBM wanted to make sure everyone knows the plan and has the same opportunity to use the tools IBM is providing."

"The summit provided a forum, which is good," says Patrick Schutz, director of managed services and support at Abacus Solutions, also an MSP. "IBM is trying to set up the vehicle to help the MSPs. They see the cloud as the driving force in the market in the future. They are acting on the information they get from this forum and are going forward with resources and focus."

One subject that was clearly a magnet of attention was application metering and charge back. Software licensing is the biggest hurdle to jump. It's much bigger than any of the technology issues according to both Schutz and Wiseman.

"The licensing issue just kept coming up throughout the conference," Schutz said. "I think one of the things IBM got from the i Cloud Summit is that licensing is a very big underlying issue and it needs to be continually addressed. I think IBM will take the time to do this."

"While we are gaining from a technology perspective, there's quite a bit of work left relative to product licensing on the platform," Wiseman noted. "The platform licensing is pretty rigid. And there's work to be done to make the licensing part of the equation cloud ready."

Jarman described the exchange of ideas concerning software pricing as "a lively discussion about pricing models and how they could be effective."

The traditional software licensing model was based on a single customer buying a single machine and running that machine for a single company. Often it was based on server processors or the tier level of the hardware. And it most definitely was based on a relationship between the application vendor and the IBM midrange shop that was looking for a specific application, utility, or tool. The traditional pricing scheme is not good when it's applied to a shared-resource model, where licensing needs to take into account the profitability for not only the software vendor, but also the MSP.

Discussions about the SaaS provider and MSPs concern topics such as should the SaaS provider install and customize its applications and keep control of licensing and support of the app and any corresponding infrastructure; whether the MSP should do the SaaS install; who will control the metered use of the app and the subsequent billing. But perhaps the biggest issue to be worked out is who has "ownership" of the end user, the MSP or the ISV?

"It's only my opinion. It may not be right. But I'm just guessing there isn't a whole lot of momentum for cloud-based pricing in the ISV community," Wiseman said.

The ideal situation for MSPs, as Jarman sees it, would be a consistent approach to licensing in an environment.

"We are a ways from that," he said. "But this was a very positive discussion and contributed to the on-going efforts. Overall this will come in incremental moves, not a single step. Pricing models will adjust over time. We are working on a best practice for pricing."

"We have an i Cloud and a Windows cloud at Abacus," Schutz said. "There are many similarities until we get to the licensing."

From his MSP perspective, Schultz says he would like to see all the application providers agree that software tiers won't be a factor in SaaS pricing. His preference is to base pricing on capacity or user count. Although he says Abacus has done well with software pricing on a case by case basis, he sees it as complicated and creating a barrier to entry to some IBM i shops.

"There may be some challenges out there," Jarman says, "but the reality is that cloud business is growing very fast. That tells you there is a lot right. Maybe some things need to be adjusted, but this opportunity is being accessed by many clients."

Overall the i Cloud Summit was a checkpoint along the way to completing the i Cloud, which is operating but still under construction.

"I see the Summit as IBM saying, 'Here's where we are and do you guys feel we are headed in the right direction?'" says Connectria's Wiseman. "Feedback is an important step along the way. IBM has been collecting feedback for quite a while. This was just another opportunity to have those discussions in a group setting. These events help shape the future."


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Editor: Timothy Prickett Morgan
Contributing Editors: Dan Burger, Joe Hertvik, Victor Rozek,
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