HPE and Citrix Team Up to Make Hybrid Cloud-Enabled Applications and Workspaces Simpler to Deploy

Transcript of a discussion on how hyperconverged infrastructure and virtual desktop infrastructure are combining to make one of the more traditionally challenging workloads far easier to deploy, optimize, and operate.

Listen to the podcast. Find it on iTunes. Get the mobile app. Download the transcript. Sponsor: Hewlett Packard Enterprise. 

Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect Voice of the Customer podcast series. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing discussion on digital transformation success stories.

Gardner

Hyperconverged infrastructure (HCI) and virtual desktop infrastructure (VDI) are combining to make one of the more traditionally challenging workloads far easier to deploy, optimize and operate. As businesses of every stripe seek to bring more VDI to their end users -- and to make the digital edge a virtual playground for workspaces and support devices -- HCI is proving a deployment back-end architecture of choice.

Now the benefits are being taken to managed cloud and hybrid cloud deployments as well. To learn more about the future of VDI powered by HCI and hybrid cloud, we are now joined by executives from two key players behind the solutions.

Please join me in welcoming Bernie Hannon, Strategic Alliances Director for Cloud Services at Citrix. Welcome, Bernie.

Bernie Hannon: Nice to be here, Dana. Thank you.

Gardner: We are also here with Phil Sailer, Director of the Software Defined and Cloud Group Partner Solutions at Hewlett Packard Enterprise (HPE). Welcome, Phil.

Phil Sailer: Thanks, Dana. Good to be here.

Gardner: Phil, what trends and drivers are making hybrid cloud so popular, and why does it fit so well into workspaces and mobility solutions?

Sailer

Sailer: People are coming to realize that the world is going to be hybrid for some time when you look at the IT landscape. There are attractive attributes to public cloud, but there are many customers that are not ready for it or are unable to move there because of where their data needs to be. Perhaps, too, the economics don’t really work out for them.

There is also a lot of opportunity to improve on what we do in private data centers or in private cloud. Private cloud implies bringing the benefits of cloud into the location of a private data center. As our executives at HPE say, cloud is not a destination -- it’s a way to get things get done and how you consume IT.

Gardner: Bernie, how does hybrid cloud contribute to both opportunity and complexity?

Hannon: The premise of cloud has been to simplify everything. But in reality everybody knows that things are getting more and more complicated. A lot of that has to do with the fact that there’s an overwhelming need to access applications. The average enterprise has deployed more than 100 applications.

And users -- who are increasingly mobile and remote, are trying to access all of these applications on all kinds of devices -- they have different ways of accessing the apps and different log-in requirements. When they do get in, there are all sorts of different performance expectations. It has become more and more complicated.

Why hybrid cloud?

For the IT organization, they are dealing with securing all those applications – whether those apps are up in clouds or on premises. There are just so many different kinds of distributed organizations. And the more distribution, the more endpoints that have to be secured. It creates complexity -- and complexity equals cost.

Our goal is to simplify things for real by helping IT securely deliver apps and for users to be able to have simpler work experiences, so they can get what they need -- simply and easily from anywhere, on whatever device they happen to be carrying. And then lock everything down within what we call a secure digital perimeter.

Gardner: Before we look at VDI in a hybrid cloud environment, maybe we should explain what the difference is between a hybrid cloud and a private cloud.

Sailer: Let’s start with private cloud, which is simpler. Private clouds are within the company’s four walls, within their data centers, within their control. But when you say private cloud, you’re implying the benefits of cloud: The simplicity of operation, the capability to provision things very easily, even tear down and reconstruct your infrastructure, and consume resources on a pay-per-use basis. It’s a different financial model as well.

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So the usage and financial models are different, but it is still private. You also have some benefits around security and different economic benefits depending on the variety of parameters.

Hybrid cloud, on the other hand, is a mix between taking advantage of the economics and the flexibility you get with a public cloud provider. If you need to spin up some additional instances and resources for a short period of time, a very bursty requirement, for example, you may want a public cloud option.

In these environments you may have a mix of both hybrid and private clouds, because your workloads will have different requirements – a balance between the need for burstiness and for security, for example. So we see hybrid as being the most prevalent situation.

Gardner: And why is having that hybrid mix and choice a good thing when it comes to addressing the full desktop experience of VDI?

Hannon: Cloud is not one-size-fits-all. A lot of companies that originally started down the path of using a single public infrastructure-as-a-service (IaaS) cloud have quickly come to realize that they are going to need a lot of cloud, and that's why multi-cloud is really the emerging strategy, too.

Hannon

The ability to seamlessly allow companies to move their workloads where they need to -- whether that’s driven by regulation requirements, governance, data sovereignty, whatever -- gives users a seamless work experience through their workspace. They don’t need to know where those apps are. They just need to know that they can find the tools they need to be productive easily. They don’t have to navigate to figure out where stuff is, because that's a constant battle and that just lessens productivity.

Gardner: Let’s dig into how HPE and Citrix specifically are working together. HPE and Citrix have talked about using the HPE SimpliVityHCI platform along with Citrix Cloud Services. What is it about your products -- and your cloud approach -- that delivers a whole greater than the sum of the parts?

Master cloud complexity  

Hannon: HCI for the last several years has been adding a huge amount of value to customers that are deploying VDI. They have simplified the entire management process down to a single management stack, reducing all that complexity. So hyperconverged means you don't need to have as much specialization on your IT staff to deploy VDI as you did in the past. So that's great.

So that addresses the infrastructure side. Now we are dealing with the app delivery side, and that has historically been very complicated. To address that, we have packaged the control plane elements used to run Citrix and put them in a cloud, and we manage it as-a-service.

So now we have Citrix-as-a-service up in the cloud. We call that Citrix Cloud Services. We have HPE SimpliVity HCI on the on-premises side. And now we can bring them together. This is the secret sauce that has come together with SimpliVity.

We have built scripting and tools that automate the process for customers who are ready to use Citrix Cloud Services. With just a few clicks, they get the whole process initiated and start to deploy Citrix from the cloud onto SimpliVity infrastructure. It really makes it simple, fast, and easy for customers to deploy the whole stack.

Gardner: We have seen new applications designed of, by, and for the cloud in a hybrid environment. But there are an awful lot of organizations that would like to lift and shift legacy apps and take advantage of this model, too. Is what you are doing together something that could lead to more apps benefiting from a hybrid deployment model?

Making hybrid music together 

Sailer: I give Citrix a lot of credit for the vision that they have painted around hybrid cloud. By taking that management plane and that complexity away from the customer --that is singing right off our song sheet when it comes to HPE SimpliVity.

We want to remove the legacy complexity that our customers have seen and get them to where they need to go much faster. Then Citrix takes over and gets them the apps that they need.

As far as which apps, there aren’t any restrictions on what you can serve up.

Gardner: Citrix has been the bellwether on allowing apps to be delivered over the wire in a way that's functional. This goes back some 20 years. Are we taking that same value that you pioneered from a client-server history and now extended to the hybrid cloud?

Hannon: One of the nice things about Citrix Cloud Services is that after we have established the relationship between the cloud service up in the cloud and the SimpliVity HCI on-premises -- everything is pretty much as it was before. We are not really changing the dynamics about how desktops and applications are being delivered. The real difference is how customers deploy and manage it.

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That said, customers are still responsible for managing their apps.  Customers need to modernize their apps and prepare them for delivery via Citrix, because that is a huge challenge for customers, and it always will be. Historically, everything needs to be brought forward.

We have tools like App Layering that help automate the process of taking applications that are traditionally premises-based -- not virtualized, and not available through app delivery -- and package them for virtual app and desktop delivery. It really amplifies the value of Citrix by being able to do so.

Gardner: I want to go back to my earlier question: What kinds of apps may or may not be the right fit here?

ROI with the right apps 

Sailer: Bernie, can you basically turn a traditional app into a SaaS app that's delivered through the cloud, in a sense, though not a traditional SaaS app, like a Salesforce or Asana or something like that? What are your thoughts?

Hannon: This is really something that is customer-driven. Our job is to make sure that when they want to make a traditional legacy application available either as a server-based app or as a virtual app on a virtual desktop -- that it is possible for them to do that with Citrix and to provide the tools to make that as easy as possible to do.

Which apps exactly are the best ones to do? That's really looking at best practices. And there are a lot of forums out there that discuss which apps are better than others. I am not personally an expert on trying to advise customers on whether you should do this app versus that app.

Our job is to make a traditional legacy application available either as a server-based app or as a virtual app on a virtual desktop, and to make that as easy as possible.

But we have a lot of partners in our ecosystem that work with customers to help them package their apps and get them ready to be delivered. They can help them understand where the benefits are going to be, and if there a return on investment (ROI) for doing certain apps versus others.

Gardner: That's still quite an increase from what we hear from some of the other cloud providers, to be honest. The public clouds make promises about moving certain legacy apps and app modernization, but when the rubber hits the road … not so much. You are at least moving that needle quite a bit forward in terms of letting the customer decide which way to go.

Hannon: Well, at the end of the day just because you can, doesn't always mean you should, right?

Gardner: Let's look at this through the lens of use cases. It seems to me a killer app for these app delivery capabilities would be the whole desktop, VDI. Let's start there. Where does this fit in? Perhaps Windows 10 migration? What are the other areas where you want to use hybrid cloud, with HPE SimpliVity on private and Citrix cloud on hybrid to get your whole desktop rationale process juiced up?

Desktop migration pathways

Hannon: The tip of the spear is definitely Windows 10 migration. There are still tens of millions of desktops out there in need of being upgraded. Customers are at a real pivot point in terms of making a decision: Do they continue down the path that they have been on maintaining and supporting these physical desktops with all of the issues and risks that we hear about every day? Do they try and meet the needs of users, who frankly like their laptops and take them with them everywhere they go?

We need to make sure that we get the right balance -- of giving IT departments the ability to deliver those Windows 10 desktops, and also giving users the seamless experience that makes them feel as if they haven’t lost anything in the process.

So delivering Windows 10 best is at the top of the list, absolutely. And the graphics requirements that go with Windows 10, of being able to deliver that as part of the user experience is very, very important. This is where HPE SimpliVity comes in and partners like NVIDIA who help us virtualize those capabilities, keeping the end users happy however they get their Windows 10 desktop.

Gardner: To dwell just for a moment on Windows 10 migration, cost is always a big factor. When you have something like HPE SimpliVity -- with its compression, with its de-dupe, with its very efficient use of a flash drives and so forth -- is there a total cost of ownership (TCO) story here that people should be aware of when it comes to using HCI to accomplish Windows 10 migrations?

Sailer: Yes, absolutely. When you look at HCI you have to do a TCO analysis. When I talk to our sellers and our customers and ask them, “Why did you choose SimpliVity, honestly, tell me?” It's overwhelmingly the ones that really take a close look at TCO that move to a SimpliVity stack when considering HCI.

Keeping the cost down, keeping the management cost down as well, and then having the ability to scale the infrastructure up and down the way they need -- and protect the data -- all within the same virtualized framework -- that pays off quite well for most customers.

Gardner: We talked about protecting data, so security impacts. What are some other use cases where you can retain control over desktops, control over intellectual property (IP), and with centralized and policy-driven management over assets? Tell us how hybrid cloud, private cloud, HPE SimpliVity, and Citrix Cloud work together in regard to privacy and security.

How much security is enough?

Hannon: The world is going remote, and users want to access their workspaces on whatever device they are most comfortable with. And IT is responsible for managing the policies – of who is using what on whatever devices. What’s needed, and what we deliver at Citrix, is the ability for these users to come in on any device that they have and uniformly be able to provide the same level of security.

Because how much security is enough security? The answer is there is never enough. Security is a huge driver for adoption of this hybrid cloud app delivery model. It allows you to keep your apps and data under lock and key, where you need them; on-premises is usually the answer we get.

But put the management up in the cloud because that's where the ease of delivering everything is going to occur. Then provide all of the great tools that come through a combination of Citrix, together with HPE SimpliVity, and our partners to be able to deliver that great user experience. This way the security is there, and the users don’t feel like they are giving up anything in order for that security to happen.

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Gardner: Let’s pursue another hybrid cloud use case. If you’re modernizing an entire data center, it might be easier to take everything and move it up into a public cloud, keep it there for a while, re-architect what you have on-premises and then bring it back down to have either private or hybrid production deployments.

Is there a hybrid benefit from the HPE and Citrix alliance that allows a larger migration of infrastructure or a refresh of infrastructure?

Opportunities outside the box 
 

Hannon: We know that a lot of customers are still using traditional infrastructure, especially where VDI is concerned. Hyperconverged has been around for a few years, but not that many customers have adopted it yet.

As the infrastructure that they have deployed VDI on today begins to come to end of life, they are starting to make some decisions about whether or not they keep the traditional types of infrastructure that they have -- or move to hyperconverged.

And more and more we are seeing our customers adopt hyperconverged. At the same time, we are presenting the opportunity for them to think out of the box and consider using a hybrid cloud model. This gets them the best of both -- the hyperconverged simplicity and relieves the IT department of having to manage the Citrix environment, of constantly doing updates, patches, and watching over operations. They let Citrix do that, and let the customers get back to managing the things that are really important -- and that's their applications, data, and security.

Gardner: Speaking of management, we are seeing the need as complexity builds around hybrid models for better holistic management capabilities across multi-cloud and hybrid cloud environments. We have heard lately from HPE about OneSphere and even OneSphere-as-a-service, so HPE GreenLake Hybrid Cloud.

There is probably no end to the things that are possible after this. We are going to start mapping out a roadmap of where we want to go.

Is this an area where the requirements of your joint customers can benefit, around a higher-order cloud management capability?

Hannon: We have just stuck our toe in the water when it comes to hybrid cloud, VDI, and the relationship that we have with HPE as we deploy this workspace appliance capability. But there is probably no end to the things that are possible after this.

We are going to start mapping out a roadmap of where we want to go. We have to start looking at the capabilities that are inside of HPE that are untapped in this model -- and there are a lot of them.

Take, for example, HPE’s recent acquisition of Plexxi. Now, software-defined networking has the potential to bring an enormous amount of benefit to this model. We have to sit down and think about how we can apply that and then work together to enable that in this hybrid cloud model. So I think there is a lot of opportunity there.

More to come

Gardner: So we should be looking for more to come along those lines?

Hannon: Watch this space.

Gardner: Before we sign off, there was some news at the recent Citrix Synergy show and there has been news at recent HPE shows, too. What are the specific products in the workspaces appliances space? What has been engineered that helps leverage HPE SimpliVity and takes advantage of Citrix?

Sailer: The Citrix Workspace Appliance Program enables customers to connect to the Citrix Cloud Services environment as easily as possible. We stuck with our traditional mantra that the interface should live where the administrator lives, and that’s within System Center Virtual Machine Manager, or within vSphere, depending on what your hypervisor choice is.

So in both locations we place a nice Citrix connector button right next to our own SimpliVity button. Within a few clicks, you are connected up into the cloud, and we just maintain that level of simplicity. Even through the process of setting all of this up, it's a very easygoing on-ramp to get connected into the cloud. And that ease of management continues right through the cloud services that Citrix provides.

We had this available in tech preview at the recent HPE Discover show, and we will be releasing later in the year the plug-ins.

Gardner: Bernie, tell us about your vision for how this appliance approach can be a go-to-market benefit. How should people be thinking about such ease in deployments?

Your journey to the cloud, at your pace 

Hannon: At the end of the day, customers are looking for options. They don’t want to be locked in. They want to know that their journey to the cloud, as Phil said, is not a destination; it’s a journey. But they are going to go at their own pace on how they adopt cloud. In some cases they will do it wholesale, and others they will do it in small, little steps.

These kinds of appliance capabilities add features that help customers make choices when they get to a fork in the road. They ask, “If I go hybrid cloud now, do I have to abandon all the infrastructure that I have?”

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No, your infrastructure is going to take you on that journey to the cloud, and that's already built in. We will continue to make those capabilities integrated and built-in, to make it possible for customers to just elect to go in that direction when they are ready. The infrastructure will be simplified and enable that to happen.

Gardner: I’m afraid we’ll have to leave it there. We have been exploring how HCI and VDI are combining to make it easier to deploy, optimize, and operate through hybrid cloud and appliance models. And we have seen how HPE and Citrix have aligned to extend the value of hybrid cloud via these approaches for a variety of high-priority use cases.

So please join me in thanking our guests, Bernie Hannon, Strategic Alliances Director for Cloud Services at Citrix. Thank you, Bernie.

Hannon: Thank you, very much. It has been great being here.

Gardner: And we have also been joined by Phil Sailer, Director of the Software Defined and Cloud Group Partner Solutions at HPE. Thank you, sir.

Sailer: Thanks, Dana. My pleasure.

Gardner: And thanks as well to our audience for joining this special BriefingsDirect Voice of the Customer digital transformation success story.

I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of Hewlett Packard Enterprise-sponsored interviews. Thanks again for listening. Please pass this along to your IT community -- and do come back next time.

Listen to the podcast. Find it on iTunes. Get the mobile app. Download the transcript. Sponsor: Hewlett Packard Enterprise. 

Transcript of a discussion on how hyperconverged infrastructure and virtual desktop infrastructure are combining to make one of the more traditionally challenging workloads far easier to deploy, optimize, and operate. Copyright Interarbor Solutions, LLC, 2005-2018. All rights reserved.

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Poor Cloud Utilization and High Complexity Demand a Better Way to Manage and Optimize Multicloud Economics

Transcript of a discussion on how IT leaders face an increasingly complex mix of identifying and automating for both best performance and best price points across all of their cloud options.

Listen to the podcast. Find it on iTunes. Get the mobile app. Download the transcript. Sponsor: Hewlett Packard Enterprise.

Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect Voice of the Analyst podcast series.

I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing discussion on the latest insights into hybrid IT and multicloud management.

Gardner

IT architects and operators face an increasingly complex mix of identifying and automating for both the best performance and the best price points across their cloud options.

The modern IT services procurement task is made more difficult by the vast choices public cloud providers offer -- literally, hundreds of thousands of service options.

New tools to help optimize cloud economics are arriving, but in the meantime, waste is rampant in the total spend for unchecked cloud computing.

We will now hear from an IT industry analyst about what causes unwieldy cloud use and how new tools, processes, and methods are bringing insights and actionable analysis to gain control over hybrid IT sprawl.

Here to help us explore new breeds of IT management solutions is William Fellows, Founder and Research Vice President at 451 Research. Welcome, William.

William Fellows: Thanks for inviting me.

Gardner: Let’s start at the top. How much waste is really out there when it comes to enterprises buying and using public cloud services?

Fellows: Well, a lot -- and it’s growing daily. Specifically this is because buyers are now spending thousands, tens of thousands, and even in some cases, millions of dollars a month on their cloud services. So, the amount of waste goes up as the bill goes up.

Rein in the cloud waste

As anyone who works in the field can tell you, by using some cost optimization and resource optimization tools you can save the average organization about 30 percent of the cost on their monthly bill.

Fellows

If your monthly bill is a $100, that’s one amount, but if your monthly bill is a million dollars, then that’s another amount. That’s the kind of wastage in terms of percentage terms that is being seen out there.

What we are really talking about here is the process and how it comes to be that there is such a waste of cloud resources. These are driven by things that can be done fairly easily in terms of better managing to rein in these wasteful charges.

Gardner: What are the top reasons for this lack of efficiency and optimization? Are these just growing pains, that people adopted cloud so rapidly that they lost control over it? Or is there more to it?

Fellows: There are a couple of reasons. At a high level, there is massive organizational dysfunction around cloud and IT. This is driven primarily because cloud as we know is usually via decentralized purchases at large organizations. That means there is often a variety of different groups and departments using cloud. There is no single, central, and logical way of controlling cost.

Secondly there is the sheer number of available services, and the resulting complexity of trying to deal with all of the different nuances with regard to different image sizes, on keeping taps on who is doing what, and so on. That also underpins this resource wastage.

There isn’t one single reason. And, quite frankly, these things are moving forward so quickly that some users want to get on to the next service advance before they are used to using what they already have.

For organizations fearful of runaway costs, this amounts to a drunken sailor effect, where an individual group within an organization just starts using cloud services without regard to any kind of cost-management or economic insight.

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HPE OneSphere

In those cases, cloud costs can spiral dramatically. That, of course, is the fear for the chief information officer (CIO), especially as they are trying to build a business case for accelerating the conversion to cloud at an organization.

Yet the actual mechanisms by which organizations are able to better control and eliminate waste are fairly simple. Even Amazon Web Services (AWS) has a mantra on this: Simply turn things off when they are no longer needed. Make sure you are using the right size of instance, for example, for what you are trying to achieve, and make sure that you work with tools that can turn things off as well as turn things on. In other words, employ services that are flexible.

Gardner: We are also seeing more organizations using multiple clouds in multiple ways. So even if AWS, for example, gives you more insight and clarity into your spend with them, and allows you to know better when to turn things off -- that doesn’t carry across the hybrid environment people are facing. The complexity is ramping up at the same time as spiraling costs.

If there were 30 percent waste occurring in other aspects of the enterprise, the chief financial officer (CFO) would probably get involved. The chief procurement officer (CPO) would be called in to do some centralized purchasing here, right?

Why don’t we see the business side of these enterprises come in and take over when it comes to fixing this cloud use waste problem?

It’s costly not to track cloud costs

Fellows: You are right. In defense of the hyperscale cloud providers, they are now doing a much better job of providing tools for doing cost reporting on their services. But of course, they are only interested in really managing the cost on their own services and not on third-party services. As we transition to a hybrid world, and multicloud, those approaches are deficient.

There has recently been a consolidation around the cloud cost reporting and monitoring technologies, leading to the next wave of more forensic resource optimization services, to gain the ability to do this over multiple cloud services.

Coming back to why this isn’t managed centrally, it’s because much of the use and purchasing is so decentralized. There is no single version of the economic truth, if you like, that’s being used to plan, manage, and budget.

For most organizations, they have one foot in the new world and still a foot in the old world. They are working in old procurement models, in the old ways of accounting, budgeting, and cost reporting, which are unlikely to work in a cloud context.

Cloud isn't managed centrally because much of the use and purchasing is so decentralized. There is no single version of the economics truth being used to plan, manage, and budget.

That’s why we are seeing the rise of new approaches. Collectively these things were called cloud management services or cloud management platforms, but the language the industry is using now is cloud governance. And that implies that it’s not only the optimization of resources, infrastructure, and absent workloads -- but it’s also governance in terms of the economics and the cost. And it’s governance when it comes to security and compliance as well.

Again, this is needed because enterprises want a verifiable return on investment (ROI), they do want to control these costs. Economics is important, but it’s not the only factor. It’s only one dimension of the problem they face in this conversion to cloud.

Gardner: It seems to me that this problem needs to be solved if the waste continues to grow, and if decentralization proves to be a disadvantage over time. It behooves the cloud providers, the enterprises, and certainly the IT organizations to get control over this. The economics is, as you say, a big part -- not the only part -- but certainly worth focusing on.

Tell me why you have created at 451 Research a Digital Economics Unit and the 451 Cloud Price Index. Do you hope to accelerate movement toward a solution to this waste problem?

Carry a cost-efficient basket

Fellows: Yes, thanks for bringing that into the interview. I created the Digital Economics Unit at 451 about five years ago. We produce a range of pricing indicators that help end-users and vendors understand the cost of doing things in different kinds of hosted environments. The first set of indicators are around cloud. So, the Cloud Price Index acts like a Consumer Price Index, which measures the cost of a basket of consumer goods and services over time.

The Cloud Price Index measures the cost of a basket of cloud goods and services over time to determine where the prices are going. Of course, five years ago we were just at the beginning of the enormous interest in the relative costs of doing things within AWS versus Azure versus Google, or another places as firms added services.

We’ve assembled a basket of cloud goods and services and priced that in the market. It provides a real average price per basket of goods. We do that by public cloud, and we do it by private cloud. We do it by commercial code, such as Microsoft and others, as well as via open source offerings such as OpenStack. And we do it across global regions.

That has been used by enterprises to understand whether they are getting a good deal from their suppliers, or whether they are paying over the market rates. For vendors, obviously, this helps them with their pricing and packaging strategies.

In the early days, we saw a big shift [downward] in cloud pricing as the vendors introduced new basic infrastructure services. Recently this has fallen off. Although cloud prices are falling, they are coming down less.

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HPE OneSphere

I just checked and the basket of goods that we use has fallen this year by about 4 percent in the US. You can expect Europe and Asia-Pac to still pay, for example, a premium of 10 and 25 percent more respectively for the same cloud services in those regions.

We also provide insight into about a dozen services in those baskets of cloud goods, so not only compute but storage, networking, SQL and non-SQL bandwidth, and all kinds of other things.

Now, if you were to choose the provider that offers the cheapest services in each of those -- and you did that across the full basket of goods -- you would actually make a savings of 75 percent on the market costs of that basket. It shows that there is an awful lot of headroom in the market in terms of pricing.

Gardner: Let me make sure I understand what that 75 percent represents. That means if you had clarity, and you were able to shop with full optimization on price, you could reduce your cloud bill by 75 percent. Is that right?

Fellows: Correct, yes. If you were to choose the cheapest provider of each one of those services, you would save yourself 75 percent of the cost over the average market price.

Gardner: Well, that’s massive. That’s just massive.

Opportunity abounds in cloud space

Fellows: Yes, but by the same token, no one is doing that because it’s way too complex and there is nothing in the market available that allows someone to do that, let alone manage that kind of complexity. The key is that it shows there is a great deal of opportunity and room for innovation in this space.

We feel at 451 Research that the price of cloud compute services may go down further. I think it’s unlikely to reach zero, but what’s much more important now is determining the cost of using basic cloud across all of the vendors as quickly as we can because they are now adding higher-value services on top of the basic infrastructure.

The game is now beyond infrastructure. That’s why we have added 16 managed services to the Cloud Price Index of cloud services. With this you can see what you could expect to be paying in the market for those different services, and by different regions. This is the new battleground and the new opportunity for service providers.

Gardner: Clearly 451 Research has identified a big opportunity for cloud spend improvement. But what’s preventing IT people from doing more on costs? Why does it so difficult to get a handle on the number of cloud services? And what needs to happen next for companies to be able to execute once they have gained more visibility?

Fellows: You are right. One of the things we like to do with the Cloud Price Index is to ask folks, “Just how many different things do you think you can buy from the hyperscale vendors now?” The answer as of last week was more than 500,000 -- there are more than 500,000 SKUs available from AWS, Azure, and Google right now.

How can any human keep up with understanding what combination of these things might be most useful within their organization?

The second wave

You need more than a degree in cloud economics to be able to figure that out. And that’s why I talked earlier about a second wave of cloud cost management tools now coming into view. Specifically, these are around resource optimization, and they deliver a forensic view. This is more than just looking at your monthly bill; this is in real time looking at how the services are performing and then recommending actions on that basis to optimize their use from an economic point of view.

Some of these are already beginning to employ more automation based on machine learning (ML). So, the tools themselves can learn what’s going on and make decisions based upon those.

A second wave of cloud cost management tools is coming into view around resource optimization, and they deliver a forensic view.

There is a whole raft of vendors we are covering within our research here. I fully expect that like the initial wave of cloud-cost-reporting tools that have largely been acquired, that these newest tools will probably go the same way. This is because the IT vendors are trying to build out end-to-end cloud governance portfolios, and they are going to need this kind of introspection and optimization as part of their offerings.

Gardner: As we have seen in IT in the past, oftentimes we have new problems, but they have a lot in common with similar waves of problems and solutions from years before. For example, there used to be a lot of difficulty knowing what you had inside of your own internal data centers. IT vendors came to the rescue with IT management tools, agent-based, agentless, crawling across the network, finding all the devices, recognizing certain platforms, and then creating a map, if you will.

So we have been through this before, William. We have seen how IT management has created the means technically to support centralization, management, and governance over complexity and sprawl. Are the same vendors who were behind IT management traditionally now extending their capabilities to the cloud? And who might be some of the top players that are able to do that?

Return of the incumbents

Fellows: You make a very relevant point because although it has taken them some time, the incumbents, the systems management vendors, are rearchitecting, reengineering. And either by organic, in-house development, by partnership, or by acquisition, they are extending and remodeling their environments for the cloud opportunity.

Many of them have now assembled real and meaningful portfolios, whether that’s Cisco, BMC, CA, HPE, or IBM, and so on. Most of these folks now have a good set of tools for doing this, but it has taken them a long time.

Sometimes some of these firms don’t need to do anything for a number of years and they can still come out on top of this market. One of the questions is whether there is room for long-term, profitable, growing, independent firms in this area. That remains to be seen.

The most likely candidates are not necessarily the independent software vendors (ISVs). We might think about RightScale as being one of the longest serving folks in the market. But, instead, I believe it will be solved by the managed service providers (MSPs).

These are the folks providing ways for enterprises to achieve a meaningful conversion to cloud and to multiple cloud services. In order to be able to do that, of course, they need to manage all those resources in a logical way.

There is a new breed of MSPs coming to the market that are essentially born in the cloud, or cloud-native, in their approach -- rather than the incumbent vendors, who have bolted this [new set of capabilities] onto their environments.

One of the exceptions is HPE, because of what they have done by selling most of their legacy software business to Micro Focus. They have actually come from a cloud-native starting place for the tooling to do this. They have taken a somewhat differentiated approach to the other folks in the market who have really been assembling things through acquisition.

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The other folks in the market are the traditional systems integrators. It’s in their DNA to be working with multiple services. That may be Accenture, Capgemini, and DXC, or any of these folks. But, quite frankly, those organizations are only interested in working with the Global 1000 or 2000 companies. And as we know, the conversion to cloud is happening across all industries. There is a tremendous opportunity for folks to work with all kinds of companies as they are moving to the cloud.

Gardner: Again, going back historically in IT, we have recognized that having multiple management points solves only part of the problem. Organizations quickly tend to want to consolidate their management and have a single view, in this case, of not just the data center or private cloud, but all public clouds, so hybrid and multicloud.

It seems to me that having a single point across all of the hybrid IT continuum is going to be an essential attribute. Is that something you are seeing in the market as well?

More is better

Fellows: Yes, it is, although, I don’t think there is any one company or one approach that has a leadership position yet. That makes this point in time more interesting but somewhat risky for end users. That is why our counsel to enterprises is to work with vendors who can offer a full and a rich set of services.

The more things that you have, the more you are going to be able to undertake and navigate this journey to the cloud -- and then support the digital transformation on top.

Working with vendors that have loosely-coupled approaches allows you to take advantage of a core set of native services -- but then also use your own tools or third-party services via application programming interfaces (APIs). It may be a platform approach or it may be a software-as-a-service (SaaS) approach.

At this point, I don’t think any of the IT vendor firms have sufficiently joined up these approaches to be able to operate across the hybrid IT environment. But it seems to me that HPE is doing a good job here in terms of bringing, or joining, these things together.

On one side of the HPE hash is the mature, well-understood, HPE OneView environment, which is now being purposed to provide a software-defined way of provisioning infrastructure. The other piece is the HPE OneSphere environment, which provides API-driven management for applications, services, workloads, and the whole workspace and developer piece as well.

So, one is coming top-down and the other one bottom-up. Once those things become integrated, they will offer a pretty rich way for organizations to manage their hybrid IT environments.

The HPE OneSphere environment provides API-driven management for applications, services, workloads, and the developer piece as well.

Now, if you are also using HPE’s Synergy composable infrastructure, then you are going to get an exponential benefit from using those other tools. Also, the Cloud Cruiser cost reporting capability is now embedded into HPE OneSphere. And HPE has a leading position in this new kind of hardware consumption model -- for using new hardware services payment models -- via its HPE GreenLake Hybrid Cloud offering.

So, it seems to me that there is enough here to appeal to many interests within an organization, but crucially it will allow IT to retain control at the same time.

Now, HPE is not unique. It seems to me that all of the vendors are working to head in this general direction. But the HPE offering looks like it's coming together pretty well.

Gardner: So, a great deal of maturity left to go. Nonetheless, the cloud-governance opportunity appears big enough to drive a truck through. If you can bring together an ecosystem and a platform approach that appeals to those MSPs, to systems integrators, works well in the large global 2000, but also has a direct role toward the small and medium businesses – that’s a very big market opportunity.

I think businesses and IT operators should begin to avail themselves of learning more about this market, because there is so much to gain when you do it well. As you say, the competition is going to push the vendors forward, so a huge opportunity is brewing out there.

William, what should IT organizations be doing now to get ready for what the vendors and ecosystems bring out around cloud management and optimization? What should you be doing now to get in a position where you can take advantage of what the marketplace is going to provide?

Get your cloud house in order

Fellows: First and foremost, organizations now need to be moving toward a position of cloud-readiness. And what I mean is understanding to what extent applications and workloads are suitable for moving to the cloud. Next comes undertaking the architecting, refactoring, and modernization. That will allow them to move into the cloud without the complexity, cost, and disruption of the first-generation lift-and-shift approaches.

In other words, get your own house in order, so to speak. Prepare for the move to the cloud. It will become apparent that some applications and workloads are suitable for some kind of services deployment, maybe a public cloud. Other types of apps and workloads are going to be more suited to other kinds of environments, maybe a hosted private environment.

You are then also going to have applications that you want to take advantage of on the edge, for Internet of things (IoT), and so on. You are going to want a different set of services for that as well.

The challenge is going to be working with providers that can help you with all of that. One thing we do know is that most organizations are accessing cloud services via partners. In fact, in AWS’s case, 90 percent of Fortune 100 companies that are its customers are accessing its services via a partner.

And this comes back to the role and the rise of the MSP who can deliver value-add by enabling an organization to work and use different kinds of cloud services to meet different needs -- and to manage those as a logical resource.

That’s the way I think organizations need to approach this whole cloud piece. Although we have been doing this for a while now -- AWS has had cloud services for 11 years -- the majority of the opportunity is still ahead of us. Up until now, it has really still only been the early adopters who have converted to cloud. That’s why there is such a land grab underway at present to be able to capture the majority of the opportunity.

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Gardner: I’m sure we can go on for another 30 minutes on just one more aspect to this, which is the skills part. It appears to me there will be a huge need for the required skills for managing cloud adoption across the economics and procurement best practices -- as well as the technical side. So perhaps a whole new class of people are needed within companies who have backgrounds in economics, procurement, IT optimization and management methods, as well as deeply understanding cloud ecosystem.

Develop your skills

Fellows: You are right. 451’s Voice of the Enterprise data shows that the key barrier to accelerating adoption is not technology -- but a skills shortage. Indeed, that’s across operations, architecture, and security.

Again, I think this is another opportunity for the MSPs, to help upskill a customer’s own organization in these areas. That will be a driver for success, because, of course, when we talk about being in the cloud, we are not talking so much about the technology -- we are talking about the operating model. That really is the key here.

That operating model is consumption-based, services-driven, and with a retail-model’s discipline. It’s more than CAPEX to OPEX. It’s more than hardwired to being agile -- it’s all of those things, and that really means the transformation of enterprises and organizations. It’s really the most difficult and challenging thing going on here.

Whatever an IT supplier can do to assist end-customers with that, to rotate to that new operating model, is likely to be more successful.

Gardner: I’m afraid we will have to leave it there. We have been exploring how IT architects and operators face an increasingly complex mix of identifying and automating both the best performance and the best price points across their cloud options.

And we have learned how new breeds of hybrid and multicloud management methods and solutions are bringing new insights and actionable analysis to help gain control over hybrid IT sprawl.

So please join me in thanking our guest, William Fellows, Founder and Research Vice President at 451 Research. Thank you so much, William.

Fellows: Thanks, indeed. Thanks, everyone.

Gardner: Yes, a big thank you to our audience for joining this special BriefingsDirect Voice of the Analyst hybrid IT management strategies interview.

I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host on this ongoing series of Hewlett Packard Enterprise (HPE)-sponsored discussions. Thanks again for listening. Please pass this along to your IT community, and do come back next time.

Listen to the podcast. Find it on iTunes. Get the mobile app. Download the transcript. Sponsor: Hewlett Packard Enterprise.

Transcript of a discussion on how IT leaders face an increasingly complex mix of identifying and automating for both best performance and best price points across all of their cloud options. Copyright Interarbor Solutions, LLC, 2005-2018. All rights reserved.

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