Filed under Commentary …

Jul 06 2012
1 Comment
Big Data, Cloud, Commentary

Are we trying to fit square Hadoop pegs into round real-time holes?

Big Data is a big market, projected to top $16.9 billion by 2015, according to IDC.  The Hadoop ecosystem, alone, is worth $1 billion per year, according to Forrester, and is set to explode by most accounts.  What is less clear is for whom Big Data is big, and whether the workloads they’re currently running through Hadoop might not be best complemented (or, in some cases, replaced) with real-time analytics tools like Storm.

After all, given that 32 percent of Karmasphere’s survey participants are running Hadoop clusters smaller than 2 terabytes, and 55 percent are running clusters of 10 terabytes or less, the “Big” in “Big Data” really isn’t.  Not yet, anyway.  That will likely change as enterprises move from toe-dipping to diving into Hadoop and Big Data in a big way, but for now the workloads aren’t huge, and real-time tools like Storm might be ideal for managing them.

These workloads are also not necessarily being run behind the firewall.  While both Cloudera and Hortonworks are booming due to enterprises keeping their Hadoop jobs running primarily in their data centers, Amazon is already managing in excess of one million Hadoop clusters with its Elastic MapReduce service.  This is perhaps not surprising given that the majority of Big Data users tend to be business users, not hard-core IT people, according to Karmasphere’s survey.  These people are apparently very comfortable having their data processed in the cloud.

Interestingly, while there are numerous great applications for Hadoop, the majority seem to be using it for marketing-related functions:

All of which brings me back to the point I made earlier this week: some data are best analyzed in real time, not batch.  For many things, you’ll actually want both: a real-time view into what’s happening with your website, HR systems, etc., as well as a deeper, Hadoop-based analysis that is done in batch, after the fact.

Real-time analytics tools like Nodeable (based on the open-source Storm project) are not a replacement for Hadoop.  They’re complements.

Given that so much of the data being analyzed with Hadoop are still relatively small and marketing-focused, not to mention being analyzed in Amazon’s cloud, I’d argue that more of today’s data, not less, should be run through real-time analytics systems, and particularly hosted systems.  After all, while it’s useful to know how aspects of your online retail site are working hours or days or months after the fact, you actually want the “next click” to reflect real-time analysis, as Yahoo CTO Raymie Strata argues:

With the paths that go through Hadoop [at Yahoo!], the latency is about fifteen minutes.…[I]t will never be true real-time.  It will never be what we call “next click,” where I click and by the time the page loads, the semantic implication of my decision is reflected in the page.

Again, this isn’t to denigrate the importance of Hadoop.  At all.  It’s simply to suggest that for many applications, relying on batch-oriented Hadoop alone is an incomplete strategy.  Real-time is required for many applications, particularly those where Hadoop is being used today, and that real-time capability is delivered through Storm-based Nodeable or other real-time analytics systems.

It’s not Storm or Hadoop.  It’s Storm and Hadoop.

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May 29 2012
Big Data, Commentary

The problem with treating people like data: Learning from Autonomy’s mistakes

As much as we tout the importance of data in today’s fast-paced markets, Autonomy CEO Mike Lynch is a poignant reminder that people matter, too.  A lot.

HP bought Autonomy in late 2011 for $10 billion.  Autonomy was one of the UK’s brightest tech stars, but its CEO, Mike Lynch, was known to be somewhat of a difficult personality.  How difficult?  So bad that Autonomy employees gave Lynch a measly 20 percent approval rating. If the pundits think President Obama has a tough road ahead of him with a nearly 50 percent approval rating, imagine Lynch’s likelihood of getting elected.

No.  Way.

In fact, as Wired reports, the only way HP could maximize the value of its $10 billion acquisition was to fire Lynch.  This is ironic, given that Autonomy’s business is to “make sense of and process unstructured, ‘human information,’ and draw real business value from that meaning.”  The company that enables others to glean meaningful information from unstructured data was at pains to treat its employees as anything more than cogs in a machine, to be tightened and tweaked to force them to perform.

In other words, as much as we may want to boil business down to 1s and 0s, ultimately all business is about meeting human needs, not only as customers but also as employees.  Even Nodeable, which ingests machine data, processes it in real-time, and outputs useful insights is ultimately in the business of serving people, not machines.

Autonomy has built a good business based on serving customer needs. But it has started to decline as its employees struggled to enjoy apparently tyrannical working conditions.  By showing Lynch the door, HP has taken the first step toward treating both its customers and its employees with respect, which turns out to be very good business.

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Apr 17 2012
2 Comments
Cloud, Commentary

Vendor lock-in may well be the least of a CIO’s concerns: Defining openness in the cloud

There are many great reasons to use open-source software. Avoiding vendor lock-in perhaps one of the weakest. It’s not that lock-in isn’t a real concern, but it’s generally not a CIO’s first consideration. The first consideration is getting stuff done.

Which is why Rackspace CEO Lanham Napier is almost certainly wrong to castigate Amazon over proprietary lock-in.  Not wrong because he’s incorrect.  Wrong because it’s an ineffective strategy.

It’s also why Red Hat’s Gordon Haff is likely wrong to take on VMware using the same argument.  VMware’s Matthew Lodge tweaked his open-source peers over the “I’m the most open” discussion, arguing that “While the ugly sisters were squabbling, customers were getting on with business and choosing their Cinderella as VMware.”  What irked Haff most, however, was Lodge’s follow-on comment: “Openness is not about how you write software, it’s about what you allow your customers to be able to do.”

Haff responds:

He has a very good point, but again, it doesn’t really go very far, which is why Red Hat for years has emphasized value, not fluffy intangibles in its field marketing.  Yes, the company will talk about vendor lock-in for its high-level marketing messages, but the salespeople walking in to talk with a CIO?  They’re talking about performance-to-cost ratios over competitors like IBM and HP.  When it comes to talking business, Red Hat is all business.

And rightly so.

When a CIO reports to the CEO, she can’t point to “but look at all the freedom I gave us.”  She knows she’s going to have to deliver tangible results.  Which is why ex-JBoss veteran (and Cloudbees board member) Bob Bickel is right to point to alternative ways to be open in the cloud:

Again, this isn’t to fully deprecate the value of open source.  But it is to suggest that there are various ways to define openness in cloud computing, and source code is just one aspect among several, and perhaps not even the most important one.

At Nodeable, we feel that a nuanced approach to openness is the right one.  We use some great open-source software at the heart of our cloud analytics service, including Storm and Hadoop, but we don’t yet see how it would make much sense (or be of any real use) to anyone to open source our platform.  We do, however, see some value in open-sourcing our agent technology, and are exploring this.  Most importantly to us, however, is the ability for our users to easily get their data into and out of our analytics service.  And we do.

Data, source code, APIs, etc.  All factor into the new world of open.

Mar 26 2012
Big Data, Cloud, Commentary

Why Walmart should mimic Amazon.com and ‘open source’ its supply chain

Amazon.com didn’t get into the business of selling cloud computing services to make money from excess capacity.  That’s a myth.  Even so, Amazon.com did get into the cloud computing business because it knew quite a bit about how to manage infrastructure at scale, and made a bold bet that it could become the center of cloud developers’ universe just as it was increasingly the center of the retail universe.

So why isn’t Walmart, master of a hyper-efficient supply chain, peddling access to its supply chain expertise?

Walmart still needs to come up with a credible answer to Amazon’s dominance online, but there’s a great deal of retail business that will persist offline in brick-and-mortar stores.  Even Amazon recognizes this, and has been experimenting with offline retail.

Walmart, for its part, has been scrambling to innovate online, and most recently has been talking up an open-source Big Data strategy.  This strategy involves open-sourcing tools that Walmart is building to move data from legacy tools into Hadoop clusters, and should be a boon to the countless others that will have similar data management needs.

It sounds like smart strategy, and it is.  But it doesn’t get to the heart of what Walmart could, and perhaps should, be doing.

Back to Amazon.  Amazon Web Services was never about selling Amazon.com’s excess capacity.  That’s a myth, and one that Amazon CTO Werner Vogels rejects:

The excess capacity story is a myth. It was never a matter of selling excess capacity, actually within 2 months after launch AWS would have already burned through the excess Amazon.com capacity.  Amazon Web Services was always considered a business by itself, with the expectation that it could even grow as big as the Amazon.com retail operation.

What isn’t mythical, however, is that Amazon understood web applications at scale, and knew how to build the necessary infrastructure to drive them.  As Amazon CEO Jeff Bezos explains, Amazon both had the knowledge and the need to create this infrastructure for its own use, and figured it could then turn this into a serious business:

Approximately nine years ago we were wasting a lot of time internally because, to do their jobs, our applications engineers had to have daily detailed conversations with our networking infrastructure engineers. Instead of having this fine-grained coordination about every detail, we wanted the data-center guys to give the apps guys a set of dependable tools, a reliable infrastructure that they could build products on top of.

The problem was obvious. We didn’t have that infrastructure. So we started building it for our own internal use. Then we realized, “Whoa, everybody who wants to build web-scale applications is going to need this.” We figured with a little bit of extra work we could make it available to everybody. We’re going to make it anyway—let’s sell it.

Now think about Walmart.  While Walmart’s tagline is (or was) “Everyday low prices,” with an emphasis on delivering reasonable quality for market-beating prices, the way Walmart achieves this is through its legendary supply chain.  No one beats Walmart in terms of managing the process of filling shelves.  As one commentator notes:

Basically Wal-Mart runs on an entirely different road than everyone else, a sort of information data superhighway. Wal-Mart knows literally everything that any retailer could ever want to know about one of its products.  It’s been said that if the US was ever in World War III, the first thing to be taken over by the government would be Wal-Mart’s supply chain. It has THAT kind of performance power.

So if the supply chain is so good, why doesn’t Walmart “open source” it?  Amazon recognized early that it could build a significant business by outsourcing its expertise in infrastructure.  Why can’t Walmart do the same with its supply chain?  And just as web application developers have crowded into the shadow of Amazon Web Services, I suspect we’d see an army of brick-and-mortar retailers of all sizes happy to tap into Walmart Supply Chain Services.

Ultimately, retailers aren’t in the business of supply chains any more than application developers are in the business of infrastructure.  Walmart should be thinking of how to leverage its supply chain expertise to become the center of an ecosystem, and not simply the center of its own P&L statement.

And while I’m dispensing all this free advice, I’ll just add: Nodeable would be happy to track and analyze all the systems that feed into the supply chain, giving users a single pane of glass to see what’s happening throughout the supply chain.  Because, hey!  We’re generous like that.  :-)

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Mar 14 2012
3 Comments
Cloud, Commentary

Simplify your product, disrupt your competition

Starting a company is really, really hard.  But keeping it going and making it relevant for an ever-growing body of customers is even harder.  As eminent Union Square Ventures VC Fred Wilson points out in a recent post, most startups don’t ever make it to the scaling to serve customers stage.  They get stuck in the “Trough of Sorrow.”

The best way through this Trough?  Simplifying one’s service to cater to one clear use case.

I’ve now worked at enough startups to recognize the wisdom in these words, but also the difficulty in achieving them.  When taking on Facebook/Microsoft/Documentum/Incumbent X the understandable desire is to compete head-to-head, taking on the gorilla with an improved product at a superior price point.  The problem, of course, is that a startup rarely has the time or resources to actually accomplish this.  Not before the Series A or B money runs out.

The best execution I’ve experienced on this quest for simplicity was at Alfresco.  John Newton (CTO and co-founder), Paul Holmes-Higgin (head of engineering), and Dave Caruana (chief architect) built an ECM system that was nowhere near as feature-rich as Documentum, but it was “good enough” for simple document management tasks, and that was enough for us to pull in some great customers like The Christian Science Monitor, Boise Cascade, and more.  Years later, the product is more than a match – feature-for-feature – for Documentum and a number of other content management systems.  But that’s not how it started.

Though Wilson doesn’t reference Clayton Christensen’s “Innovator’s Dilemma,” I suspect part of the value in focusing a product on a single use case is that it actually facilitates disruption.  Innovators don’t disrupt by aping features.  They disrupt by providing a good enough, alternative experience at a winning price.

My current company, Nodeable, is going through this same refining process.  When Dave Rosenberg started the company, the unofficial tagline was “Twitter for machines” and the product was part collaboration tool (Talk with colleagues and friends in a Twitter-like interface), part systems management tool (DM your systems to take actions on your AWS/JIRA/etc. systems), part Big Data analytics engine (mining machine data to discern trends, anomalies, etc.), and more.  It was too much.

So we’re in the process of paring back the functionality to focus on the core value our beta users are asking for: real-time insight into what their cloud systems are doing, giving them the intelligence they need to take actions.

In some ways, it’s less ambitious than what Dave first envisioned.  But in other ways, it’s dramatically more ambitious, because it allows us to do one thing very, very well.

Quoting Wilson:

[L]ike most success stories, the answer [is] simplifying the service. Taking features out. Reducing the value proposition to a clear and simple use case. This [is] not done in a vacuum. This [is] done by releasing a less than perfect product to the market, finding a few customers who want[] a less than perfect product, and then listening carefully to those customers to get to the ideal product.

It doesn’t happen overnight, as I learned with Alfresco, but when it happens, it’s magical.  And it also doesn’t happen without plenty of failed attempts to understand and meet customer needs.

But only after whittling down a company’s value proposition to its essence can a company then successfully scale up in a productive way.

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Mar 09 2012
1 Comment
Cloud, Commentary

Cloud is getting cheap and boring: It’s about time

If ever I needed confirmation that cloud computing had gone mainstream, Safeway’s latest guidance call provided.  And then some.  Here’s an American grocery chain’s CEO – not the CIO or CTO – talking about how cloud is going to help the company foster brand loyalty among its shoppers, and he’s not talking about cloud as some IaaS or PaaS or whatever sort of technological marvel.  He’s talking about it as a dull-but-effective way to make Safeway a part of its customers’ lives beyond the brick-and-mortar grocery experience.

Cloud friends: we have arrived.

This has happened to some extent with open source, as the latest earnings calls from a range of companies suggests, but open source remains something that people may hear about but don’t necessarily know how it affects their businesses.  The cloud is very different.  It’s something the business user can grok, similar to Big Data-centric applications.

As public cloud computing prices fall – and they’re currently in a race to $0, with Microsoft dropping its Azure pricing to compete with Amazon – this trend toward mainstreaming the cloud will accelerate.  I suspect we may even see pricing hit $0.  Amazon has already shown its willingness to take a loss on one product (e.g., shipping) in order to drive volume sales in another area.  Microsoft could conceivably drop Azure hosting to $0 in exchange for licensing fees elsewhere.

At any rate, it’s no surprise that cloud has consumed much of the time and attention of Silicon Valley’s digerati.  What is impressive is how much the cloud is finding its way into the talk of non-technical business folks who don’t know IaaS from PaaS but do know what a cloud-based coupon loyalty program looks like.  At this point, it’s not cloud anymore.  It’s just how business gets done.

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Feb 20 2012
Commentary

More signal, less noise

We live in the world of Big Data, with an increasingly computerized world spitting out massive quantities of data.  While it’s theoretically nice to have all that data, the real trick is putting data to work.  Which means, as I’ve written before, we need to figure out how to make Big Data “small.”

It turns out that this isn’t very easy.

Which is probably why über-investor Vinod Khosla points to the concept of “Data Reduction” as one of the huge, still largely untapped opportunities in technology.  By Data Reduction he means “Reducing, filtering and processing data streams to deliver the information or action that is relevant to you.”  It is increasingly clear that our problem isn’t creating abundance (of data, open-source code, or many other things), but rather parsing this abundance so that it’s relevant and useful.  This is as true for Facebook as it is for Red Hat.

Or for your average enterprise IT personnel.  Even the act of managing an enterprise’s IT is increasingly a Big Data concern.  As The 451 Group analyst Rachel Chalmers indicates:

The way we build and manage infrastructure is about to change….Machines can scale, but owing to the time-consuming and difficult-to-automate chores of raising and educating human children, the pool of people talented enough to manage them scales only by a ten- or twenty-year lag. Hence, the rise of next-generation, cloud-scale performance management; capacity planning; and intelligent workload-placement systems.

This becomes easier as systems gather a wide body of data, compare it to a particular user’s performance, and highlight the deltas and suggest ways to improve.  This is what Nodeable and other companies are starting to do, and it will make developers and operations personnel much more effective in their respective roles.

Ultimately, the company that delivers more signal and less noise will win.

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Jan 18 2012
1 Comment
Commentary

Sales or no sales? Learning from Atlassian and Box

The holy grail of any business is to effectively lower the cost of sale to $0.  Popular developer tools vendor Atlassian seems to have cracked this code, cranking out $102 million in revenues in 2011 without a single salesperson on staff.  Not one.  There aren’t many companies that can claim that sort of success.

Some, like Groupon, would likely give anything to be more like Atlassian.  Groupon, after all, stumbled on its way to an IPO due to its horribly high sales and marketing costs, which effectively meant that the company was ever more unprofitable, the more it sold.  This led some to declare it a massive Ponzi scheme, and others simply to avoid buying into its stock.

But the alternative to Atlassian isn’t necessarily Groupon.  Take Box, for example.  In a conversation I had with Box CEO Aaron Levie last week, he stressed that his salesforce is actually a competitive advantage for him against competitors like Microsoft and IBM:

Having a salesforce is really helpful because it’s a great feedback loop on what’s happening in the market.  We learn about cutting-edge customer problems, and can then implement features or fixes within weeks to meet these needs whereas Microsoft will take years between product releases.

Levie has a point.  The downside to Atlassian’s salesforce-free model is that it lacks customer face time, which can not only lead to bigger sales but also to improved products.  Atlassian would credibly respond that it has all sorts of activities that help it get feedback from its developer customers, including its Atlas Camp.

And it would be right.

I learned at Alfresco that as useful as a salesforce is for gleaning customer requirements, it can also isolate the engineering team from real-world customer interaction.  Once it becomes “someone else’s job” to work with the customer, it becomes too easy to rely on indirect feedback.  That’s why I would follow Alfresco CEO John Powell’s counsel every single time: for the first year of Alfresco’s existence, he and I were the company’s salesforce, and we nearly always involved members of the engineering team in sales calls.

At Nodeable we, too, are trying to err on the side of earning revenues without a salesforce, but we’re hoping to extend it beyond the first year, Atlassian-style.  This is easier said than done.  It requires a relentless focus on a high-quality product that essentially sells itself over the web at a price point that can be handled on a credit card, at least initially.  This means documentation must be awesome, and the out-of-the-box user experience must be even better.  There should never be any question as to what the customer is buying, and why.

Atlassian nails this, as does 37Signals.

Doing so eliminates one of the biggest headaches in any business: managing a sales team.  From dealing with commissions to figuring out proper incentives, the sales team ends up consuming a huge amount of time (and money).  FogCreek summarizes the headaches quite well:

The problems include infighting over who gets credit for accounts and sales. They include constantly comparing territories and account value to determine fairness between salespeople. They include an enormous amount of overhead as each salesperson sedulously tracks every transaction no matter how minute to make sure they get paid on it (by the way, they hate having to do this, and it’s a staggering waste of time. It’s also a place where weak salespeople like to hide out).

All of this is organizational dysfunction, and it’s a recipe for resentment and distrust among your team.

Management then tries to correct for these problems. They constantly drop or add ballast. They have to carefully structure the pay plan, the territories, the lead assignments. They have to referee disputes, tweak the various systems, and try to keep everyone happy. It’s like a spinning top and every time it starts to wobble, management has to try to nudge it back. It’s a large amount of effort spent propping up a system that we have all just assumed is necessary.

Sound like fun?  Not at all.

All of which is just one more reason to respect what Atlassian has done, and serves as an inspiration to we at Nodeable who would like sales without the sales headaches.  In theory, managing a sales team is the nature of the beast when running a business.  But Atlassian calls that theory into question.

I’d love to hear your experience.  Does Sales bring more value than it wastes?  I ask this not as a loaded question, as some of my favorite people and best experiences have come in the midst of running a sales team or selling myself.  But I’m curious as to whether others think it’s inevitable.

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Jan 06 2012
Commentary

Crossing the (Cloud Naming Convention) Chasm

If you wanted any proof that cloud computing has gone mainstream, look no further than the names of recent “cloud” companies.  Like Boundary.  Or Nodeable.  Or…take your pick.

Whenever there’s a new technology that takes Silicon Valley by storm, entrepreneurs desperately seek to compete on everything but naming conventions.  Back in the day, if you were an open source company, you either had the name of the open source project in your name (SugarCRM, Alfresco, etc.), or you had “Source” somewhere in your name (SourceSense, MuleSource, etc.), or both.  The idea was to highlight the fact that you were an open source company, with all that entails (low cost, open technology, etc.).

The cloud computing revolution has brought much of the same.  Cloudscaling, Cloudera (which isn’t actually all that much about clouds, but…), Cloudswitch, CloudKick, Cloudshare, and more.  Cloud computing is new, and the companies helping to drive it forward want to make sure they call this out in their name.

This actually isn’t any different from life in the Microsoft (“Microcomputer Software”), IBM (International Business Machines), VMware (virtual machine-ware), and others of older vintage.  Tech companies have long wanted to showcase themselves as leaders in a given technology trend by embracing the name of that trend in their corporate names.

No, not everyone does this.  The cloud world is full of Joyents and RightScales, which haven’t plastered the “cloud” brand on their corporate name.  But enough do that it’s noticeable.

At Nodeable, we take cloud adoption as a given.  Hence, our name isn’t “Cloudable,” but rather “Nodeable,” which name we took to signify the idea that anything – any node – can/should communicate or be communicated with.  We then visualize all these disparate data in an easy-to-use UI that makes interacting with and managing the systems, or nodes, easy.

This is something the cloud enables, but it’s not the cloud, per se.

Which is eventually what happens with technology.  We stop wearing it on our sleeves and instead start using it to solve business problems.  I think we’re getting there with the cloud, and long ago reached that point with open source.  So the big news around SugarCRM and other “open source companies” is that they no longer emphasize open source at all, but take it for granted and instead emphasize business value.

We’re not quite there with the cloud, but we’re getting there fast.  Right on time.

Dec 29 2011
1 Comment
Commentary, News Video

Nodeable CEO talks cloud on Tv

Nodeable CEO Dave Rosenberg talks cloud on Tv

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