February 2011


Infrastructure as a service (IaaS) vendor Enomaly establishes a marketplace to buy and sell unused computing resources. Dubbed SpotCloud, the new beta service has the potential of helping IT departments reduce costs while also increase revenue potential from IT. Is SpotCloud right for your business? Will Enomaly’s open source efforts affect your decision?

Creating a win-win-win scenario for buyers, sellers and Enomaly
SpotCloud offers sellers with unused computing resources an opportunity to convert these idle resources into a profit centre. Sellers have the ability to define capacity quotas, utilization levels, duration and pricing.

Buyers are able to search for computing resources based on processing power, pricing and the physical location of the computing resource. Buyers can access short term computing resources for significantly less than purchasing the resources in-house or through a third party cloud computing provider. Enomaly claims savings can be up to 60 percent for buyers using SpotCloud.

While Amazon does offer buyers a spot market for its Elastic Compute Cloud (EC2), the resources available are from a single market participant, Amazon. SpotCloud aims to create an efficient market through attracting a large number of buyers and sellers. For creating this marketplace, providing the software to enable sellers to securely make their excess computing resources available and handling billing and payments, Enomaly keeps between 10 to 30 percent of the seller’s revenue.

On paper, it’s a win-win-win scenario for all parities involved. But there are a few considerations before jumping into the marketplace.

The preverbal cloud lock-in issue
Sellers providing computing resources must support a compatible IaaS platform which makes these resources usable and provides usage tracking in a standardized fashion.

SpotCloud currently only supports the Enomaly Elastic Computing Platform (ECP), Enomaly’s IaaS product which has been on the market for over five years. Enomaly offers a feature limited, version of Enomaly ECP for SpotCloud sellers to use at no charge. SpotCloud expects to add support for other IaaS platforms in the coming weeks. As this occurs, sellers will have additional reassurances about reduced lock-in.

Buyers on the other hand must have a virtual machine (VM) package, also referred to as appliances, before being able to use the resources from SpotCloud. The packaging of these appliances is however based on proprietary desktop and command line tools from Enomaly. Seeing this as a potential area of concern, Enomaly founder and CTO, Reuven Cohen, announced plans to open source these tools in the near future.

An opaque market without service level agreements
Enomaly refers to the SpotCloud market as being opaque because the seller’s identity is unknown. This is attractive to sellers, like hosting providers, who have excess capacity to sell at a lower price than they offer directly to their regular customers. Opaque markets allow sellers to offer lower prices on excess capacity without cannibalizing their primary revenue source.

An opaque market could concern buyers that need to know where their workload will run or who may be concerned about the security of their data within the VM. The former concern is addressed by the ability to select resources from sellers based on the geographic location of the physical computing resources. SpotCloud does not directly address the latter concern. However, prudence suggests being cautious, especially in the early days of SpotCloud, about the type of data and workload being processed through resources from the marketplace.

Another key consideration is the fact that SpotCloud does not offer service level agreements (SLAs). For may IT organizations, this could be a deal breaker. However, SpotCloud is intended for workloads that can be restarted when a failure occurs or can take longer than expected without impacting business critical processes. If these don’t meet your business needs, SpotCloud may not be a good fit for your business.

Could SpotCloud to follow in Amazon’s footsteps?
SpotCloud will sound very much like Amazon cloud offerings did when they first hit the market – not up to par with the needs of a typical IT department. And yet, Amazon is the leading public cloud provider in the market. IT departments, startups and others have decided to work within the limits of Amazon Web Services (AWS) in order to benefit from the lower cost and greater flexibility that AWS offers.

SpotCloud has the potential to follow in Amazon’s footstep based on its lower cost, revenue potential and greater flexibility. Companies drawn to these benefits will begin using SpotCloud as an element of their IT processes, not as wholesale replacement of established processes.

Few CIOs can ignore an opportunity for lower costs while also generating revenue for the business, as long as risks can be managed effectively. IT decision makers are encouraged to track the progress of SpotCloud and consider its use for certain non-business critical tasks with limited security concerns. IT decision makers seeking to shift the view of IT being a cost center should consider offering excess computing resources to the SpotCloud marketplace.

Follow me on Twitter at SavioRodrigues. I should state: “The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies, or opinions.”

Accenture’s 2011 Technology Vision report provides eight trends that Accenture expects to present discontinuous change that IT decision makers must prepare for.

Accenture Technology Labs scoured a range of input data including venture capital funding, IT analyst reports, Accenture’s IT Executive Forum and research and development activities in order to produce the Accenture 2011 Technology Vision report. This comprehensive methodology could excuse Accenture for missing the typical December window reserved for trends and predictions reports.

Accenture’s eight key trends identified are:

  1. Data Takes its Rightful Place as a Platform
  2. Analytics Is Driving a Discontinuous Evolution from BI
  3. Cloud Computing Will Create More Value Higher up the Stack
  4. Architecture Will Shift from Server-centric to Service-centric
  5. IT Security Will Respond Rapidly, Progressively–and in Proportion
  6. Data Privacy Will Adopt a Risk-based Approach
  7. Social Platforms Will Emerge as a New Source of Business Intelligence
  8. User Experience is What Matters

Not surprisingly, open source is no longer a trend in and of itself. Rather, as the report authors confirmed, open source is viewed as a potential enabler for any of these trends. However, one trend stands out as being more tightly linked to open source product usage.

Pervasive analytics requies multiple solutions
In explaining the second trend, “Analytics Is Driving a Discontinuous Evolution from BI”, Accenture writes:

…despite a steady drumbeat calling for the integration of data across an organization, there will be no such thing as an integrated analytics platform, technology, or deployment model. The emergence of technologies such as cloud computing is changing how data is generated, collected, and stored across an organization. In practice, this will require a distributed approach to analytics.

While Accenture’s title for this trend positions business intelligence (BI) versus analytics, the line between the two can be blurry, if at all visible. I won’t wade into that debate, which Forrester’s Boris Evelson has nicely summarized here.

Accenture suggests that the notion of a single analytics platform, analyzing a single integrated data set across a company is a fairy tale; one that your company shouldn’t invest precious IT budgets chasing. Rather, according to Accenture, plan to use and support a set of different analytics products within your enterprise.

I’ve previously discussed the “R” statistical programming language for analytics that SAS, IBM/SPSS and open source vendor Revolution Analytics support.

Open source BI vendors such as Pentaho and JasperSoft are also reacting to the blurring line between BI and analytics. Both vendors offer users a path to extend their traditional open source BI products with “R” analytics.

This broad choice of analytics solutions enables IT decision makers to open the aperture when making product selection decisions. Align the user skills and business criticality of the analytics project with the range of open source to commercial products available. Just as companies use both MySQL and Oracle, DB2 or SQL Server, or Linux and Windows, open source and commercial analytics products will fill different needs in your company. Prepare for that reality today.

Follow me on Twitter at SavioRodrigues. I should state: “The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies, or opinions.”

Open Source for America (OSFA) recently published a report card on open technology and open government across several U.S. federal government departments and agencies. Find out which departments scored the highest grades, and what your company can learn from them.

One third of agencies received a passing grade
OSFA, a coalition launched in July 2009 to encourage U.S. federal government support of and participation in open source projects and technologies, worked with government departments and agencies to develop the methodology and rate each group.

According to OSFA, 2010 marked the first year federal government agencies were operating under the Directive and Open Government Plans.

The 2010 Federal Open Technology Report Card serves as a measure by which fifteen federal departments and agencies can measure their progress against goals supported by the open government directive.

According to the OSFA, the Report Card assigned a percentage grade to the 15 Cabinet-level departments and agencies use of open source technologies, open formats, and technology tools for citizen engagement. Agencies with scores over 50 percent included:

  • Department of Defense (82 percent)
  • Department of Energy (72 percent)
  • Department of Health and Human Services (55 percent)
  • Department of Homeland Security (55 percent)
  • Department of Transportation (53 percent)

The remaining 10 agencies and departments scored between 49 and 37 percent. Said differently, only one-third of agencies and departments evaluated received a passing grade. Take a look at the criteria, specifically the open technologies questions, to see if your company would fare better than these 10 agencies and departments.

Learning from the Department of Defense
The Department of Defense (DOD) achieved the highest ranking, with a score of 23 out of possible 28, stands out in the report card for several reasons.

First, the DOD has documented policies for selecting and acquiring, what the report identifies as open technologies. This includes both open source products and products that offer open file formats.

Second, the DOD provides guidance for employees wishing to participate in open source projects.

While these two policies would appear to be meets minimum requirements for today’s IT department, they’re not.

Recall results from the 2010 Eclipse User Survey which identified a strikingly low proportion of companies that allow their employees to contribute to open source projects. It could be argued that those companies, like the DOD, have an open source contribution policy. Unlike the DOD, these companies simply state, no contributions are allowed. Hardly the type of policy that developers will get excited about.

IT decision makers are encouraged to follow in the DOD’s example and set a policy, along with related processes and safe guards, for employees to contribute to open source projects. Consider using offerings and best practices from vendors such as Black Duck Software and Protecode to ensure that your developers are contributing and consuming open source code in a fashion that protects your company’s intellectual property rights and prevents copyright infringement. Doing so will keep your developers happy and help encourage innovation, within and outside of your company; a win-win-win strategy.

Follow me on Twitter at SavioRodrigues. I should state: “The postings on this site are my own and don’t necessarily represent IBM’s positions, strategies, or opinions.”