fantasy vc - virtustream

This fantasy vc post comes from something I wrote about in “what we don’t know about private cloud” and “the three cloud questions you have to answer”: 

The line between what we do in the public cloud vs what we do in the private cloud vs what never goes to a cloud model will be moved—both in time and in scope—by the cloudification of legacy applications.

In the space between public cloud for cloud-native applications and on-prem virtualization plus automation for non-cloud-native applications lies a big space for remote hosting of non-cloud-native applications. 

Some of this is satisfied by what can best be called managed hosting for virtualization, which is what most VMware-oriented service providers (even those that use the word “cloud”) do. And some of it is satisfied by VMware-oriented service providers that actually have managed to build a self-service, usage-based service model (like the very successful Tier3, recently acquired by CenturyLink).  

Yet despite the promise of being able to forklift a legacy app to a cloud provider and switch from a perpetual license model to a usage-based model to pay for a particular bit of software as a service—that is something that is rare. Enter Virtustream.

Put these things together:

• Many enterprise apps cannot be re-architected to be “cloud-native”
• There is demand to forklift enterprise apps to hosted infrastructure
• There is demand to pay for those apps on a resource-consumption model
• Many of those apps are only supported virtualized on VMware
• Many enterprises don’t have the expertise to do the forklifting
• Many service providers don’t have the expertise to do the forklifting
• Many (most?) VMware-oriented service providers can’t figure out how to get the automation and resource-consumption parts done in a way that generates a sufficiently cloud-like experience for their customers
• VIrtustream solves for this

The interesting thing about Virtustream to me is the apparent focus they’ve had from the beginning: these exact customers, this exact problem space, those exact applications. And nothing else. Period. 

The technology they built is fundamentally an enabling mechanism to make the resource-consumption model granular enough on VMware to achieve the cloud-like experience. The model they built is predicated on doing the hard work of the full life-cycle of an enterprise pre-sales/sales/post-sales consultative service. And they do the hard work.

That's not to say that they're guaranteed success. Or won't get crushed by an incumbent or other party. Or even scooped up before they become too successful. Just that I would've placed that bet.

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Disclosure: Virtustream, as a whole, was adjacent to my coverage area at Gartner—but their xStream cloud management platform was squarely in my coverage area once it was commercialized.

fantasy vc - metacloud

Kicking off a series about bets I would've placed if I had the money. This is something I very much wanted to do--very much could not do--when I was at Gartner.

I don't know the numbers on "real" (read: revenue generating) OpenStack adoption, growth, etc. . 

I do know there's real traction. 

Suspicion: it's with very very few vendors. Money is being made but success is concentrated.

There are only two startups in the space I would bet on. One, I have a conflict of interest regarding. The other is Metacloud. Both aren't really OpenStack companies. OpenStack is just a vehicle for the thing they actually do.. In Metacloud's case, what they do is remote ops (as a service!)

Put these things together:

• There is a market for private cloud (whatever that is)
• There is a market for AWSish public cloud
• There is a market for AWSish private cloud (Eucalyptus are still in business, aren't they?)
• There is an existing use case for AWSish private cloud in most enterprises (web, mobile, dev)
• There is a fundamental our-bottom-line-at-stake use case for AWSish private cloud in some subset of enterprises (a few hundred?) today
• There is a general lack of operational skill for AWSish private cloud
• One of the core things public cloud provides is a managed service
• There is a market for on-prem remote-managed AWS (the three letter agency thing is a public example)
• The Metacloud guys are ops guys who understand enterprise, scale, web, mobile, open source, AWSish cloud
• There just aren't a lot of hats (big or small) in this particular ring right now 

That's not to say that they're guaranteed success. Or won't get crushed by an incumbent or other party. Or even scooped up before they become too successful. Just that I would've placed that bet.

Disclosure: They're in my former coverage area. But I believe with some certainty that I'd come to the same conclusion without that background. I have no financial interest in Metacloud. I really like them. Would have a beer with that crew any day. 

provided vs exposed

If you're offering infrastructure as a service, you have to have infrastructure to offer and it has to be exposed.

But if you're offering something else, then:

The infrastructure doesn't need to be exposed, THUS you don't need to have it.

Examples:

• You offer VMs, so you need to expose VMs, a management console for VMs, and (hopefully) APIs to connect to and operate them
• You offer a runtime, so you may or may not have VMs--but who cares since what you need to expose is the runtime, a management console for that runtime, and (hopefully) APIs to connect to and operate it
• You offer an application, so you may or may not have VMs or a particular runtime--but who cares since what you need to expose is the application, a management console for that application, and (hopefully) APIs to connect to and operate it

It gets a little more complicated when someone wants to build something else on top of what you offer. Then they probably want and/or need more exposure to, and more control knobs for, the underlying stuff.

Basically, this is what makes IaaS (specifically VMaaS) different in kind from anything else. 

What you provide guides what you expose dictates how you can build.

What you've built limits what you can expose dictates what you can provide.

the three cloud questions you have to answer

The bit about 3 lines in "what we don't know about private cloud" seems to be making sense to everyone I discuss it with (end users, vendors, investors), so I've reformulated it as a set of questions.

Taking an application portfolio perspective.. looking across the entire set of apps you run, you have three decisions to make:

1. Of that set, what do you NOT want to develop or run, period?
2. Of the remaining set, what do you NOT want to develop or run on your own infrastructure?
3. Of the remaining set, what do you NOT want to manually provision and have manually requested?

The consensus on these questions, if one ever emerges, will produce the actual (vs pick-your-pundit's projected) terraforming of the tech landscape.

what we don't know about private cloud

This is not one market, it's a hundred (or hundreds of) markets. There is no real big pattern to where the inflection points are. There are lots of little patterns.

We do not know:

• The line between what applications we will run and what we will totally outsource to SaaS
• The lines between what we will leave bare metal, what we will virtualize and what we will actually run in any cloud
• The line between what we will do on a public cloud and in a private cloud
• The degree, magnitude, and timescale of how "virtual private cloud" and "hosted private cloud" moves those lines
• The degree, magnitude, and timescale of how various approaches to cloudifying "legacy" apps via encapsulation, migration, replicating, etc., moves those lines

These lines are being drawn in different places by everyone--including similar orgs by sector or size or whatever and also by different groups within the same org.

Add to that the range of things that are called "private cloud"--everything from "I have a data center with some servers in it" to "I've built my own EC2, EBS, S3, ELB, SQS, and SNS with open source software on commodity hardware and can automate ALL THE THINGS".

Here's something I do know: any number put forth for private cloud market size, growth, or spend is utterly daft.