Virtualization management is ultimately where these vendors will run their course in this market.  Everyday, dozens of elements managed in their frameworks are “falling off the grid” and popping up somewhere in VMware’s vCenter–which is rapidly evolving into the new dashboard for the new IT organization.  Yet, VMware is not sticking it to the big guys on their own, they are fostering a whole marketplace of start-ups allowing them to leverage their APIs and their virtual appliance construct.

One such company is Xangati, which briefed me earlier this week about their two new virtual appliances focused on virtualization management.   The power of the virtual appliance model is that it allows Xangati to have an enterprise-wide deployment within a couple hours (covering both the virtual and physical infrastructure) versus a framework which can take weeks and months to get started.  Even more importantly they are riding the wave of virtualization economics through being delivered as a virtual machine.  As a result they can as can others drive down the cost of management to a fraction of what it used to be–in the same way that VMs have done for servers.

What Xangati is capitalizing on is that there is a screaming need for management solutions that provide high value in the virtual world.  First of, you have to be virtual to properly manage the virtual.  Secondarily the value that is provided has to be focused directly at the virtualization teams first, since they are the ones feeling the growing pains with virtualization.  When there is a breakdown in virtual server or desktop performance the calls are channeled their way and not to IT operations.  And in turn they will use vCenter to first get their bearings on an issue, but they need more than just element management.  That is the void Xangati fills by focusing on how those elements are communicating and what they are doing at the time of a performance problem.  Why wouldn’t someone fill that visibility void at a mere $299 dollars a hypervisor?

That is what I like so much about this virtual appliance model, it that it takes the elongated business case out of the equation and allows the doers to buy what they need to by when they buy it.  It is after all this kind of model that has been driving IT over recent years–the organic growth of productivity solutions.  Will the incumbent management vendors go down this path?  Unlikely, but companies like VMware and Xangati will be happy to let them stick to their slow growth markets.

Based on the hype that Cisco and much of the media created, I’m not sure what I was expecting but my expectations were high.  So what was it?  Today Cisco launched its new carrier core router, CRS-3.  The CRS-3 is the evolution of a product Cisco launched a few years back, CRS-1, which, at the time, set the high water mark for carrier routers.  Upon its release, many people chuckled at the concept of a 92 Tbps router, thinking we’ll never need that kind of bandwidth, but what we found was that indeed we do!  Cisco has shipped almost 5000 CRS-1’s–clearly, there’s demand.

In comparison, the CRS-3 is a behemoth.  It’s 100 Gig-E ready with a total switching capacity for 322 Tbps.  In theory, one could download every movie ever made in about 4 minutes.  It’s also IPv6 ready, clearly designed to handle the explosion of mobile devices, and it’s optimized to work with Cisco’s data center products UCS and Nexus, meaning it’s “cloud ready” as well.  The CRS-3 is over 10x the speed of the closest competitive product and does indeed set a new high bar for networking.

Cisco sees the bandwidth being driven by the convergence of mobility, cloud computing and video.  This is similar to the vision Yankee Group laid out at the start of 2008 where we predicted that an Anywhere Enterprise would be driven by the convergence of cloud, mobility and social media.  We continue to see these as big drivers with video being a very specific form of social media.

In the enterprise markets this means growth of bandwidth intensive applications such as workload mobility, unified communications, videoconferencing and Telepresence.  Moving these complex applications to the cloud certainly decreases the complexity level for enterprises and allows the network operators to move from being a vendor of commodity services to a strategic partner.

In the consumer markets, the vision of converged mobility, video and cloud means more high bandwidth cloud based video and real time gaming services.  HD TV is here and 3D TV is right around the corner and these will be huge drivers of bandwidth.

Overall Cisco estimates that each person will consume 15TB of data between our personal and professional lives every month.  Is the 15 TB a real number?  Maybe and maybe not. But the fact remains, we use all the bandwidth we’re given and will continue to.

So, did the Cisco CRS-3 live up to the immense hype that preceded it?  No, I don’t think so. But they did set a very high bar.  It’s a good solid announcement that will allow network operators to put a foundation in place to drive differentiated multimedia and mobile services.

Zeus Kerravala and I were delighted to have three cloud thought leaders join us for today’s webinar:

• Doug Hauger, General Manager, Microsoft Windows Azure
• Raj Nathan, Executive VP and Chief Marketing Officer and Senior VP, Sybase
• Jayshree Ullal, President and CEO, Arista

The discussion was lively and thoughtful–a special thanks to each of them for taking the time do join us. A replay of the webinar is below. We’re also offering a complimentary download of the report that inspired this webinar: “Clouds in 2010: Vendor Optimism Meets Enterprise Realities.” Register as a guest for access.

The webinar runs about an hour: audio (mp3) and slides (pdf).

In this excerpt from my interview with Axel Haentjens, senior vice president Marketing, Brand and External Communications for Orange Business Services, Haentjens provides his take on how the upcoming ubiquitous connectivity revolution will change how enterprises do business, both internally and with their customers.

What do changes like pervasive connectivity and embedded IP in broader devices mean for enterprises?
I have been in the communications business for 15 years at France Telecom [FT]. In 1995, it was very clear that the desktop had to be connected. Now we’re at the point where we have laptops, BlackBerrys, PDAs, and more. So in the last two to three years, you could access documents and e-mail through a PDA from everywhere — from a train, on holiday, etc. For Orange [FT’s key brand], that translated into a huge success for our Business Everywhere tool. We have more than 1.3 million users.

But this year, we see something else. We’re now at the point of pervasive reachability, where you need to talk to people using various means that are all integrated. We ought to be able to start one way, and then move to another.

And it’s not only human connectivity.

Right. There will be five times more objects to connect than people, at the very least. There are mature applications today in tele-monitoring, fleet management and tracking goods. Orange operates mobile networks in 28 countries, including 15 countries in Europe today: 15 percent of our mobile B2B revenue is already M2M. It comes from SIM cards embedded into devices either for fleet management or remote monitoring, and it’s growing at a rate of about 20 percent per year.

Clearly tele-metering is ready. You’ll find security companies doing it, utilities also, and energy companies doing tele-measuring for gas and electricity. We see a lot of apps in vehicles, helping to manage thousands of trucks via geo-location and route optimization.

And just beginning now is remote monitoring of healthcare patients, like monitoring pacemakers. We are working with a U.S. company that puts a very small chip in the pacemaker that talks to a Bluetooth device in the house, which has a SIM card that sends info to the doctor. If there is anything abnormal with the patient’s heart, the doctor can be informed very quickly, can react and call the patient. We started deploying it in the second half of 2009, and by the end of 2010, we’ll have full-sized deployment underway.

In connectivity technology, what are the biggest areas of opportunity for enterprises to address sustainability?
There are three areas. The first is video conferencing and other collaboration tools, anything that saves you from having to travel. Within FT, we now have a model where, if you buy Telepresence services, we can tell you the CO2 footprint of what you buy, including the carbon cost of creating and operating the solution. We can show what kind of savings you can realize, and how many tons of CO2 you’ll save based on the travel not done, etc. It’s pretty straightforward.

The tough part is life cycle analysis. If you’re serious about CO2 footprint–that’s the hard part. You need the initial carbon cost for building, installing and maintaining, etc. But we are moving from qualitative to quantitative. We were all talking about this for the last two years, but it was poetic and not very measurable. Under the pressure of green auditors, who said they can’t certify applications without measurements because it’s not serious enough, we are moving to demonstrable KPIs. So the next step is to create tools we’ll give to the customer to help calculate the savings.

The second is IT virtualization. We have done it inside FT. We have clearly measured that when you virtualize IT, you make better usage of your IT resources. Typically, you can move the rate of server usage from 15 to 60 percent. Within FT, we have removed 40 percent of our servers. The win in terms of energy savings is several megawatts. We’re not talking about CO2 savings, because we have a lot of nuclear energy in France and it doesn’t issue much carbon. But in the U.S., which has a lot of coal-fired power generation, the carbon impact of that kind of power savings would be huge.

The third is M2M tele-measuring/tele-monitoring solutions. A company very involved in energy management in France is claiming that 15 to 20 percent of its energy consumption could be reduced by remote monitoring: getting the exact temperature of buildings and doing remote management.

What do you think are the factors that could accelerate or decelerate the pace of change around sustainability?
When we look at sustainability solutions, there are three critical success factors.

The first is cost savings. I don’t believe you can sell any kind of green solution if it’s more costly. Telepresence has to save on travel, virtualization has to save IT capex and power, and tele-monitoring has to save on costs.

The second is environmental benefits. We talked about that already.

Finally, when you combine those two, you also usually find a business benefit. For instance, with Telepresence, the business benefit is increased productivity. If I don’t have to travel to Sydney, I save two days’ travel time, I’m less tired and I make better decisions. For virtualization, the performance is better because you can have very smooth, optimized management of resources. With tele-monitoring, you can optimize refilling of the gas tank, do better routing of vehicles and see less time wasted.

We’re working our way globally through a major recession. Is now a good time or bad time for introducing sustainable solutions through connectivity?

Anything that saves costs is easy to propose, but less easy to sell. The negative point is the need for capex. Telepresence solutions are a huge capex spend.

Consider the several categories of customers that we talk with. For those just trying to survive, you can’t sell them anything like this. If customers are just striving for cost-cutting but are otherwise in good shape, they’ll say they love the solution, but they need something capex-free. Then, we have the opportunity to put a leasing solution into place. The third category is customers in good shape that will move forward with these. We do have some of those. McDonald’s is not hurting right now, for instance.

If you were advising a business manager on how to profit from the expansion of connectivity in the world, what would you say? What are the priorities? What’s mandatory, and what’s optional?
Focus first on rich availability everywhere: the right laptop, the right BlackBerry. Jump into the technology, and provide things that are reasonably close to state of the art. We’re in a world where you need to be connected. Don’t shy away from the basic connectivity trend—being away from that could be away from business. Be fully savvy about those technologies.

Second, rethink the way you work. I’ve been experiencing it a lot in the last two years. The way we work has to become more flexible. It’s not about working hours vs. leisure hours; it’s more integrated. We don’t want to work all the time, but we can be more flexible about the way we live and apply some freedom. Think about working in ‘project mode.’ Determine who the key people are on a project, and then be proactive about figuring out how to keep them connected. Use all the possibilities creatively. If it’s brainstorming, you need to book a Telepresence room, since you want eye contact and you want to see body language. But for project advancement—what’s the status of this, what’s next and working down a list of things—using SharePoint and an audio conference should be enough. Think a lot about what kind of communications you need for what purpose.

You have to develop, as an organization and as individuals, a keener sense of the strengths and weaknesses of each type of communications, what works best for the work you’re doing.

Yes, well put.

Do you see the need for businesspeople to campaign inside their organizations for this next wave of communications change?
Yes. FT clients tell us that IT departments are a bit resistant to things they want to do. IT departments like simple things that are fully managed. They are struggling with the fact that they need to accept multiple devices and lots of access via different methods. Diversity is a big roadblock for IT organizations.

Young people coming into the company—that’s a very strong lever for change. They come from university, where they have been using IM, webcams, and so on. They won’t accept just a desktop computer. Change is being driven by the arrival of young people in the company.

There are other strong levers for change. C-level people. For instance, the CEO who is now keen with state-of-the-art technologies, or the CSO who wishes to equip his or her sales force with the latest online sales application and device.

Like a sandwich, with IT in the middle.
Yes. And to be fair, IT organizations tell me they know they have to change.

How will IT organizations have to change?
Diversity is the big driver. IT had to manage desktops—very standard equipment and processes. Now in the next 10 years, IT will need to manage any device from anywhere, anytime. We’ll see convergence between fixed and mobile, M2M activities. We also see diversity in the contact center. Start the discussion, then go to a Web site and add a video session. We’ll see this total interoperability and interchangeability of any connection. IT will have to manage this; otherwise, the company will be out of business. And it will have to do it without spending too much money.

How should managers feel about the urgency of these changes? How fast do they need to move? What kinds of companies need to move fastest, and which have more time?
Manufacturing companies are probably less immediately impacted. Assembly line and big process companies might be impacted, but not so much the people.

On the other hand, all services businesses—banks, insurance, travel agencies and governments—need to worry quickly. Their customers will demand to be served immediately. They use these tools in their personal lives, and they expect the same from the businesses they work with.

My favorite message is the network is not a commodity. It’s a very sophisticated way to manage voice, video and data; mobile/fixed/remote; IP, non-IP; and Internet and non-Internet. Managing these networks will be a critical mission. One of the biggest challenges we’ll face in the next 10 years is making it all work to its potential.

– Axel Haentjens

Orange Business Services

]]> http://blogs.yankeegroup.com/2010/02/03/anywhere-and-sustainable-enterprises/feed/ 0 http://blogs.yankeegroup.com/2010/01/14/webinar-introducing-anywhere-the-book/ http://blogs.yankeegroup.com/2010/01/14/webinar-introducing-anywhere-the-book/#comments Thu, 14 Jan 2010 19:24:55 +0000 Emily Green http://blogs.yankeegroup.com/?p=3527 Thanks to everyone who joined us in the webinar today, officially launching our new book ANYWHERE: How Global Connectivity Is Revolutionizing the Way We Do Business. For the discussion, I was joined by five terrific thought-leaders in the connectivity space:

• Glenn Lurie, President, Emerging Devices, AT&T
• Walter McCormick, President & CEO, U.S. Telecom Association
• Paul Sagan, President & CEO, Akamai Technologies
• Sriram Viswanathan, VP, Architecture Group, Intel
• Nigel Waller, Founder & CEO, Movirtu, Ltd.

A special thanks to each of them for taking the time to chat about Anywhere and illustrate their own business’ opportunities and challenges. If you missed the presentation, the replay is below–I would be delighted to hear your thoughts.

The webinar runs about an hour: audio (mp3) and slides (pdf).

[As a one-time resident of the great city of Philadelphia, PA, I was delighted that the first reported in-store sighting of the book was at the Barnes & Noble in Rittenhouse Square, Philadelphia. ]

Our official launch of the book is on January 14th, with a webinar where I’ll talk about the book with some of the thought leaders who contributed to the research.  Sign up to join me here.

Keep up with all our doings around the book’s official launch by checking the book’s website, where we’ll be posting book signing events, reviews, and other launch activities.  Plus, because we did so much research for the book that we weren’t able to include in the book itself, we will be augmenting the website with in-depth interviews and resources over the next few months.

If you’re a YG client, you can read this recent report I wrote based on book interviews with two creative entrepreneurs bringing Anywhere opportunities to emerging markets.

Happy 2010 to everyone. We all managed to make it through 2009. Now let’s get back out there and build the Anywhere Network.

Not least, consumers woke up to the pleasures of mobile content, although it’s questionable whether MNOs will ever see a fair return for their expensive 3G licenses. Roaming charge crackdowns and market saturation haven’t helped financials either.

Time again to put a nebudchadnezzar on ice? There’s plenty under the tree for 2010:

1. Ethernet will be everywhere. Ethernet is in the LAN, it’s in the WAN, it’s transforming mobile backhaul economics, and it’s converging the datacenter. Fiber remains best, but clever vendors (see Hatteras, Actelis) are delivering copper-bonded Ethernet in the first mile. And new Ethernet exchanges (see CENX and Equinix) aim to speed order to cash with their interconnect services. Want a unifying communications fabric? Well duh!

2. The CDN bubble will burst. Telco CDNs can offer compelling features, but how many service providers can the market sustain, even if video traffic is exploding? Many partnerships are already in place: Tata Communications with BitGravity, Verizon with Velocix, Deutsche Telekom with EdgeCast and Global Crossing with Limelight Networks and EdgeCast. If you’re not in the game now, you’ll need deep pockets to buy in.

3. The cloud’s hot air will expand. Resilient, liquid (and probably Ethernet-based) connectivity is going to save the outage-prone cloud. To invest in cloud services enterprises require robust network as well as applications-specific SLAs, as well as network redundancy, say Yankee Group enterprise surveys. Offering on-demand VPN connectivity to cloud services (on a wholesale or retail basis) could help defuse concerns about their security and resilience.

4. Equipment vendors will want to be your new best friend. The ratio of CAPEX to revenue currently stands at 12.6 percent among European operators, according to Yankee Group analysis. It’s not going to recover much. That’s why European equipment vendors like Alcatel Lucent, Ericsson and Nokia Siemens Networks are on a charm offensive with managed services propositions and aims to transform telco business models. Listen to their pitch. And talk to Huawei:  With a new SDP partner program and growing software division, it’s got more in its arsenal than cheap kit.

5. Smart wholesale will become sexier than dumb wholesale. Get big, get niche or get out. Embrace revenue-sharing models with non-traditional partners. And work mobile angles: International remittances, GRX to IPX interconnect, content transcoding, white-label mobile UC and M2M are among many rich avenues of investigation.

Best wishes for the New Year – and decade – look forward to continuing the conversation!

Earlier today, I was joined by my colleagues Jon Paisner, Camille Mendler and Josh Holbrook to unveil Yankee Group’s top predictions for the 2010 communications industry. We discussed six of our eleven published predictions and took questions live from the audience. Check out the webinar replay below. You can also register as a Guest on the Yankee Group Web site to get the full report for free.

The webinar runs about an hour: audio (mp3) and slides (pdf).

Today we start talking publicly about something we have been working on at Yankee Group for much of this past year: our first mass-market book. If you have worked with us recently — or even if you have just visited our web site or talked with us about what we do –  it should come as no surprise that the name of the book is ANYWHERE.

The book is nearing publication with McGraw-Hill, for release in stores on January 8, 2010 (although the major online bookstores are taking orders now; hint, hint). You can get a taste of what it’s all about by downloading Chapter 9, “How ANYWHERE Do You Need to Be?” at our book website, which is anywhere.yankeegroup.com.

Since we’re now preparing to support media interest in the book, I thought I’d use this post as an opportunity to practice my book Q&A.  So I’ll interview myself!

Intriguing title! What’s it about? ANYWHERE is Yankee Group’s vision for the emergence of ubiquitous connectivity: when a seamless, capacious, and intelligent network connects all of us and the things we care about. The book explains why this is happening — but more importantly, it exposes the tremendous changes still ahead in all our lives as it happens. We set out the vision, how and when it happens around the world, and what it’s doing for us as consumers, workers, and business leaders. That’s why the subtitle of the book is How Global Connectivity is Revolutionizing the Way We Do Business.

But Yankee Group’s research is all about Anywhere already. Why did you write a book? By any measure you could choose — the number of people touched, the geographical scope of the technologies, the total economic value added — this revolution in the expansion of the global network will be the largest technology change of our lifetimes, even bigger by far than the commercialization of the Internet.  Yet frankly most managers in the business world today don’t yet see the magnitude of those changes: how the network’s expanded reach will continue to ‘flatten’ the planet, how the growing richness of network experiences will create new appetites in us as consumers, how the network’s intelligence will shrink costs in companies and change the fundamental nature of our activities as businesses.

So we wrote this book to educate businesses on how best to steer their initiatives, partnerships, product development, customer service and virtually every other aspect of a business in order to succeed in the Anywhere environment.

What does the reader get? We focused on describing the business impact of the network changes ahead — in non-technical terms — and prescribing specific things that managers can do to profit from those.  For instance, we paint some pictures of how the lives of typical people will change in ten years’ time, in both developed and emerging markets. We show some companies living the Anywhere vision now, and share how that’s transforming their businesses. We explain how to decide when to move, and what to tackle when you do.

Big scope. How did you pull this picture together? Yankee Group’s extensive resources in the communications world gave us the chance to interview over 50 thought leaders in connectivity–from pioneers to CEOs, from small firms to mega-corporations.  Bob Metcalfe, co-inventor of Ethernet… Nicholas Negroponte, founder of the One Laptop Per Child initiative… Dan Hesse, CEO of Sprint… Reed Hundt, former chairman of the U.S. FCC, and many more big thinkers lent us their support. Check out the complete list here. Besides our data assets and terrific contributions from our own analysts, the ideas, advice, and examples from these participants provide very rich context for the Anywhere vision.

You sound excited — why? The reason why all of us at Yankee Group are excited is that we are evangelists for the huge benefits the world will enjoy from the continued expansion of the network — to more people, more devices, and more services. As analysts, we are independent but not neutral: we unequivocally want the Anywhere Network to emerge. The sooner that happens, and the more business people ‘get’ that message and commit themselves to planning how to benefit, the better. With this book, we feel like we’re doing our part to help that all come about.

I’m excited about everyone’s feedback, too. You can talk about it here, follow me on Twitter, join the book’s Facebook fan page, add your reviews and comments on the online book store pages, and of course email me directly as always.

PS: Yes, it’s going to be available in e-book formats as well! You should expect no less for a company working to become an Anywhere Enterprise. Amazon will be promoting it in Kindle form in January — more on that shortly.  Meanwhile — see you Anywhere!

3Com is one of the industries most misunderstood companies.  Over the past few years almost the entire networking product line has been refreshed.  It has a huge base of business in China as well as low cost engineering that turns out high quality products quickly.  Its biggest problem though is brand.  When you mention 3Com to anyone in the networking industry, one of two comments usually come up: (1) “those are the guys that bailed on the enterprise market a decade ago;” or (2) “those are the guys that make NICs (network interface cards), palm or low end networking gear.”

Bringing 3Com products into HP not only solves HPs product holes, but also solves 3Com’s brand and distribution problems.  Two problems, one solution.  The move also creates a de facto #2 vendor in the networking industry.  Currently, in the switching market, which is the biggest of the enterprise networking submarkets, HP and 3Com flip flop for #2 depending on how the numbers are cut.  Our research has HP at 11% and 3Com at 9% creating a company with a combined 20% of the overall ports.  This will be the first time the industry has had a clear alternative to Cisco since the mid ‘90s when Nortel was a dominant vendor.

This is the third big acquisition announcement in the past few months following Cisco-Tandberg and Avaya-Nortel.  There is a clear trend to companies rationalizing down the number of vendors they use so we see this trend continue as companies like Brocade, F5, Riverbed, Polycom and Aruba all become legitimate acquisition targets for larger companies.  So, while this may be the most recent announcement, it won’t be the last.

For a more detailed look at my analysis, look for the Yankee Group focus report on this acquisition.