Ortenzi and ScaleMatrix show what's possible when data center experts start their cloud from scratch

Imagine for a moment that you could take all the smart things that you and a few of the smarter people you know have learned about setting up and running data centers over the past 20 years and apply it, right now. No legacy systems to worry about – you could start over using hardware configurations on the cutting edge of efficiency and a pretty hot software platform to base your cloud services on.

Too late. Mark Ortenzi and his cohorts at ScaleMatrix just built that company.

ScaleMatrix, a new Southern California-based managed service provider (MSP), started up in the middle of last year. Mark and the guys running ScaleMatrix have been in the data center space for years, and decided now was the time to get financial backing, invest in the right amount and kind of infrastructure, and run data centers the way they ought to be run. Their goal? To become an MSP offering a wide variety of cloud services that are in demand with customers while building a great business for ScaleMatrix. They became a big CA 3Tera AppLogic partner following a $3.06 million deal we (CA Technologies & ScaleMatrix) did together in January.

I asked Mark, their CEO, if he’d provide a little background on what ScaleMatrix is up to for the blog. Mark’s background includes senior executive positions with several data center and dedicated server companies. As you might guess, Mark has a strong background in data center design and he has written several industry standards articles relating to data center operations, design, and efficiency. He has several patents pending relating to his latest enclosure design that will be deployed at ScaleMatrix, one piece of their secret sauce. Read on:

Jay Fry, Data Center Dialog: ScaleMatrix is a brand new entity, but your team is made up of data center veterans. What’s your unique pitch to customers and what are you mainly focusing on?

Mark Ortenzi, ScaleMatrix: We’re different. We’ve been in the industry for 20 years, and things have changed in the area of heating and cooling efficiencies. And in being able to grow data centers in an environment without having to spend $50-100 million overnight.

What sets ScaleMatrix apart from other so called “cloud computing companies” is our ability to control the entire process. We’ll be able to architect, deploy, and manage the entire solution in any one of our 12 data centers across the United States or in your own private data center. By controlling the entire process we are able to offer our private cloud solution as a service. Thus, we become an operating expense and not a capital expenditure.

Plus, everybody in our org is a systems engineer. We don’t hire door openers.

DCD: Some have said that cloud computing might be the new innovation that came out of the recent big recession. Whether that ends up being true or not, there’s no doubt that you guys are making a big bet in the hopes that the timing is right for both service providers and cloud services. What market conditions convinced you to strike out on your own with ScaleMatrix right now?

Mark Ortenzi: Flat budgets in the traditional data center realm are a new norm. The role of IT must adjust to [that of] “service provider,” creating internal and external services to deliver on needs. Just about everyone is aware that IT needs to drive revenue…but the reality is that business demand is outpacing IT budgets and resources. IT had been the sole source of IT services in the enterprise until cloud computing options appeared, promising fast, simple access to new services. Instead of going to IT for everything, the business can now go around IT to cloud alternatives.

The low-hanging fruit right now for us is SMBs. Everyone has an initiative in the cloud, and we have a really affordable plan. We can bring it up, run your model, and have a presentation to the CTO – to show them that it works in an affordable manner.

DCD: We’ve recently published the results of an IDG survey about how cloud computing is affecting the IT role that pointed to the importance of many of the business skills. I’ve also talked here about IT titles that may be on their way out, and others that are now appearing. How do you see cloud computing changing the role of IT inside enterprises?

Mark Ortenzi: I see IT becoming an operating expense. The days of owning and maintaining a private data center are nearing an end. Demand for IT within the enterprise will continue to climb. Providing a “pay-as-you-go” model for IT just makes sense. Cloud computing also provides the enterprise the ability to adjust to the current IT atmosphere faster than ever before. Nowadays, it is much easier to develop flexible, scalable and reliable services on the fly.

DCD: You’re banking on some pretty innovative components and operations approaches to run data centers. Can you describe how you guys are doing things differently for your customers?

Mark Ortenzi: There are many different aspects of our business model that differentiate us from our competitors. Our newest data center is being built out on an as-need-basis. We only utilize hardware, electricity and manpower needed for the clients we currently have. Our data center is scalable, energy efficient [a PUE of 1.1 is the number Mark touts, by the way] and our proprietary rack system using commodity servers is fully self-contained. We also are the only private cloud solutions provider that manages, maintains, trains and deploys the entire solution from soup to nuts.

DCD: How are you and your team measuring your success with customers?

Mark Ortenzi: Initially every customer is asked; “What are you trying to achieve by utilizing our private cloud solution?” Once the solution is in place and fully operational, success is measured by our ability to meet their goals, our ability to save the customer money and reducing their IT capital expense.

DCD: You’re using CA 3Tera AppLogic as a basis for your new business. Why did you take that approach versus what else you could have done?

Mark Ortenzi: It’s simple, CA 3Tera AppLogic is a fundamental piece in the ScaleMatrix business model. It provides us the ability to be scalable within our organization and the ability to extend this to our customers. There isn’t any other product on the market today, to our knowledge, that provides the ability to virtualize the entire IT infrastructure of a business while maintaining ease of use and cost effectiveness.

DCD: Regarding cloud computing in general, what’s the most compelling benefit you see organizations getting from cloud computing?

Mark Ortenzi: Maximizing ROI and reducing operating cost while eliminating IT capital expense.

DCD: What are still the biggest hurdles for cloud computing, and for ScaleMatrix? How are you helping folks get over those?

Mark Ortenzi: Bringing awareness to the AppLogic product, how cloud computing works, and how to take advantage of it – these have been the most challenging. It’s so fundamentally different from how business-class computing has been done in the past. Getting the potential customer to understand that is difficult; [using cloud computing and AppLogic] is easy and we make it this way for a reason.

It’s difficult wrapping our customers’ minds around how cloud computing works and how to take advantage of it. The smarter they are, the harder it is to get. They wrap too much into it– they have a cloud initiative, but they don’t know what to do. We put a plan together for them. What you focus on to get them past the hump comes down to figuring out what their business model is and what their pain is at the moment. You find it to be different with everybody. Usually, when you’re partway through it, a light bulb goes off.

DCD: Any advice on where to start with enterprises?

Mark Ortenzi: You have to get their feedback on what they’re thinking, what they’ve learned, who they’ve worked with. Don’t go after the big animal – converting their whole infrastructure over to cloud in one shot – boy, don’t ever do that. Instead, you find that little thing that is troubling them and show them how to resolve it, the pet project that they want to do more cheaply, more quickly.

…

It will be interesting to watch how Mark and the ScaleMatrix team progress over the next few months. One way of looking at the ScaleMatrix business is that they are putting the elasticity and dynamic qualities that cloud brings customers, and using them to support their own cloud services business. Their customers get state-of-the-art data centers and cloud-ready hardware and software infrastructure, but also direct access to Mark and his team with years of operational experience. These guys have been through a lot of real-world scenarios, and it takes quite a lot to surprise them.

I’ll keep tabs on ScaleMatrix and provide updates here and on my Twitter feed about what’s going on with them. If you have questions, you can ping Mark or his team directly.

Real math and rapid-fire ideas: overheard at Cloud Connect 2011

I spent several days last week at Cloud Connect in Santa Clara and I am very glad that I did. It was great connecting with a group of the cloud computing whiz kids (and some only slightly older than that). Plus, Alistair Croll and the team proved that they can continue to put on a conference each year that feels the pulse of the market and provides the content that needs to get airtime.

Last year’s event was solid; this was even better.

Here were some of highlights and things I overheard while I was at Cloud Connect:

The rapid-fire, 10-minute keynotes were great conversation starters. I think they planned it that way. And it worked. The keynotes I saw ranged from Amazon CTO Werner Vogels talking about how the lines between IaaS, PaaS, and SaaS were blurring (thanks to some William Vambenepe-inspired graphics)…to the Eventbrite speaker talking about real-world cloud operations experiences at his current company, at Digg, and Playboy…to Berkeley researcher Oriol Vinyals showing how teaching computers to play and learn complex video games like Starcraft could have great possibilities in cloud resource management and automation. (From my Cassatt experience, this kind of automation is powerful – and hard.) There were only a few sales pitches we had to sit through (Rackspace, this means you), but at least they were short. The quick, concise keynotes were a great way to stretch your mind.

Lots of math. Real math. From the Cloudonomics track to the keynote by eBay, there were some real, hard numbers presented. That’s a home run for anyone interested in cloud computing. The eBay keynoter talked through the math they used to decide if and when to use internal infrastructure and if and when to use public cloud capabilities -- and what situations caused those decisions to shift. HP’s Joe Weinman walked his session attendees through the logic behind his proofs of the inevitability of cloud computing, the situations where it makes mathematical sense, and the reason hybrid clouds are just a good idea. Joe’s work is both thorough and practical: he describes how to use logic and economics to make cloud decisions. You can check out Joe’s work here; he actively solicited people to continue to pound on his numbers and check his work. That’s refreshing.

Does cost still trump everything? The one thing that Joe’s sessions really got me thinking about was this: how far can you take any mathematical conclusions about when an organization should adopt cloud? Humans, after all, don’t always decide things by the numbers (yes, even in IT). Funny thing is that I think it was Joe Weinman who said in his session, “There’s no such thing as a rational economic decision maker.” We can’t look at just cost, he said. “Things are more complex than that.”

Nevertheless, you have to have the numbers. It’s important to have those numbers to refer to, even if we don’t use them as the sole decision-making criteria. Panelist Ravi Rajagopal (from CA Technologies and a lecturer at NYU on cloud computing) said he believed that after all is said and done, customers must use cost to justify any move to the cloud. Speed, competitive differentiation, and other criteria are nice, but they take a back seat. The other panelists (James Staten from Forrester, especially) underscored the power of agility as a driver and the need to look at softer things, like opportunity costs. I personally think we’ll be able to move away from a purely cost-based justification as things like the Service Measurement Index for cloud services take off.

What you get when you mix cloud and accounting. At Cloud Connect I heard a comment that made me think that there may be some interesting accounting tricks still to be learned about cloud computing. One of the big pitches for cloud is that it moves many IT expenses from being capital expenses to operational expenses. However, in one of his Cloudonomics sessions, Weinman noted that Netflix is using AWS reserved instances and amortizing the costs over time. It got picked up and discussed in a bit of depth by Reuven Cohen, Data Center Knowledge, others. An interesting concept, for sure, and one that I hope those with more of a finance background than I will delve into.

What you get when you mix cloud and lawyers. Dr. Chenxi Wang from Forrester did a surprisingly thorough overview of the global legal issues that cloud is causing and that must be addressed. (I say surprising because she was actually filling in for another analyst at the last minute.) She tossed around some interesting concepts and ideas that were new to me. In talking about cross-border data flow, she mentioned an intriguing idea that might help solve some of the legal issues: treating data centers as “data embassies” where the laws match those of the country of the source of the data, rather than the location of the physical data center.

Also, she mentioned that one of the biggest concerns about housing data in the U.S. is the Patriot Act and the risks to the control of that data. But just putting a data center in Europe doesn’t guarantee that a U.S. company is free and clear. “Think the Patriot Act doesn’t impact your EU data centers? Think again,” said Dr. Wang. The legal precedents aren’t yet clear, and are heavily impacted by how you set up your European organizations.

Having your booth next to the beer is never a bad idea. Sure, the CA 3Tera AppLogic booth was in the back corner this time around, but somebody was looking out for us when they planned the location of the liquid refreshments. Having our new service provider partner ScaleMatrix join us in our booth was a great way to immediately share real-world experiences with booth visitors from the get-go. And that freed up CA staff like our man Justin to work on his mad 3Tera demo skills on camera.

Finally, here are a few quotable quotes I scribbled down throughout the conference. I thought these were pretty good summaries of a few of the key topics:

James Staten, Forrester Research: "The power of cloud computing comes through these two words: ‘down’ and ‘off.’" Concise…and true. When you turn a cloud application or service off, the billing stops. It’s straightforward to expand when needed, but cloud computing has to contract as well.

Randy Bias, Cloudscaling: "Cloud is a complete re-think of the IT stack." In other words, the value of the applications are what's important, not infrastructure ownership.

Ravi Rajagopal, CA Technologies & NYU: “We need to bring rigor to change the ‘art of cloud computing’ to the ‘science of cloud computing.’” And, as noted above, “You can’t justify cloud without the cost making sense.” At least, not yet. But we’re getting there.

Joe Weinman, HP: “In most cases, hybrid clouds are cost-optimal as well as the most pragmatic.” He then followed that with lots of small fonts and detailed proofs. And that’s a good thing.

Werner Vogels, Amazon: “It is still Day One in cloud.” Meaning, there is a lot of innovation to yet to come.

If that doesn’t give you your fill of Cloud Connect info, I’d suggest a couple other really good write-ups that I read: check out what Krishnan Subramanian wrote at CloudAve and Bernard Golden’s commentary at CIO.com. And start making your travel plans for next year’s event.

Survey: cloud really is shaking up the IT role -- with some new job titles to prove it

Cloud computing may still only be in the early stages of adoption, but it’s getting harder and harder to say that cloud is just a minor tremor in the IT world. More and more evidence is pointing to the conclusion that this is a full-on earthquake.

In the survey announced today done by IDG Research Services and sponsored by CA Technologies, Inc. (my employer), almost every single person that participated (96% of them anyway) believed that the main thing that the IT department does -- and is valued for -- has changed in the past 5 years. It's not just about running the hardware and software systems any more. Seven in 10 expect that shift to continue in the next 2 years.

Over half of the people attribute the changes to one thing: cloud computing. And that’s with adoption still in its early stages (our survey at the end of last year showed quite a bit of progress with adoption: 92% of the largest enterprises have at least one cloud service; 53% of IT implementers report more than 6. But most everything else isn’t being done in the cloud).

Tracking the shift in IT by watching the new IT titles

So what is this new area of value that IT is shifting to? One way to find out is to ask about the job titles. This particular survey did something that surveys often don’t do: it asked an open-ended, free-form question. The question was this: “In your opinion what job title(s) will exist in two years that do not exist today?”

I got a peek at the raw results: the approximately 200 respondents listed 112 separate answers. I guess that range of comments isn’t surprising. It’s hard to summarize, but very interesting to thumb through. But I’ll give it a shot, anyway:

A bunch of the new titles from both the U.S. and European respondents had cloud in the title. These included cloud manager, cloud computing optimizer, cloud service manager, cloud capacity planning, supervision of the clouds, chief cloud officer, and the like. These cloudy titles describe some of the new IT jobs that are appearing; I walked through some similar new titles in a previous post. Today’s new survey supports many of those earlier assertions from me and others I’ve been following.

Respondents also mentioned some interesting new titles that didn’t explicitly say “cloud.” In fact, only 40 of the new titles that respondents mentioned included the word “cloud.” The rest didn’t. These other titles described some of the increasingly important capabilities, in many cases directly connected to the shifts that cloud computing is causing.

So what were some of those other new titles expected over the next few years? Vendor manager, outsourcing manager, ombudsperson of IT issues, IT vendor performance manager, security/risk manager, chief process officers, chief communications officer, chief business enabler, virtualization solutions manager, business relationship manager, and chief analytics officer (which one respondent specifically described should report to the board of directors).

Pointing to requirements in the shift to an IT service supply chain

While this second set of titles doesn’t explicitly talk about cloud computing, they are being called out precisely because of the shift that the cloud is causing. Specifically:

· There’s a greater need to monitor and manage 3rd party vendors that are providing pieces of IT service to enterprises.

· Risk and compliance are called out as even more important than they are now. In fact, a later question in the survey tagged security management as the role that would change the most as a result of cloud computing. In addition, the survey asked what would be the moment that we’ll all know that “cloud has arrived”? Most popular answer: cloud will have “arrived” when vendors deliver solutions adequately addressing security and performance.

· Virtualization titles were also noted in the list of new ones, but many were higher-level managers, focused on solutions rather than particular technologies. In fact, when we asked which job titles did IT people think would be the most likely to disappear over the next 2 years, they listed infrastructure managers and administrators of all sorts. The folks doing administration, configuration, and management of server, databases, and networks were voted most likely to fade away. (I also did a previous post on the IT job “endangered species list,” if you're interested in more on that topic.)

More business savvy, please

The rest of the survey backed up the requirement implied in these new titles. The belief is that IT is today mainly known as owner and operator of the IT infrastructure. And that is what is changing. More than half (54%) of the respondents see the primary value of IT coming from its role managing an IT service supply chain within two years.

I’ve posted about this shift to treating IT like a supply chain several times in this blog, and it’s something that I and CA Technologies (judging from a lot of the bets the company is making in this space) expect to become more and more real over the next few years.

And with this move, the jobs will inevitably shift, too. That shift, if this survey is right, is starting now. The IT roles, our respondents predict, will focus more on being a business enabler – doing a better job integrating what IT can provide with what the business is asking for. The relationship management and communication skills with the business side of the house become much more important. Does a move to this supply chain model mean business savvy will trump technical IT skills? It certainly seems to be headed that way.

That doesn’t mean IT will banish its techies. On the contrary, those skills will continue to be important, too, given how central technology remains to IT’s success. However, cloud computing is giving IT a new focus and position on the business side of the house that it hasn’t really had before. IT has a chance to contribute more to business strategy. I expect many in IT to jump at the chance.

So...do the titles mentioned by our survey respondents make sense to you? What new titles are you seeing appear (or fade away) in your organization?

You can find a summary of the IDG survey, “The Changing Role of IT and the Move to an IT Supply Chain Model,” including graphics of some of the more interesting results and links to download the complete write-up, here.