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Thought Leaders In Cloud Computing: José Almandoz, CIO Of Novell (Part 4)

Posted on Thursday, Aug 19th 2010

By guest author Shaloo Shalini

In this part of the interview, José Almandoz shares his insights on areas in the cloud that are ripe for standardization. With customers exerting more power over software vendors and everyone under economic pressure, pricing has become more complex than ever with multiple pay-as-you-use options.

SM: What are your thoughts on standardization? Is a lack of standards causing any issues for cloud computing adoption?

JA: It would be a big issue if cloud computing does not deliver on the big promise of flexibility. The whole idea behind cloud computing is the flexibility and portability of workloads, and everything else goes to make that happen. When you engage with a cloud provider, it doesn’t mean that you are marrying for life – the beauty of cloud computing is its flexibility. You will be required in many cases to move workloads from one place to another.

Now, if you don’t have standards there that help make workloads portable, it could become a problem and you will end up with proprietary stuff again. If I have to use proprietary APIs to leverage an offering from a cloud provider, it means that every workload that I will put in that cloud is going to be dependent on that cloud. When I need to move to another vendor I will need to rewrite some of my solutions, and that is not what we expect from cloud computing.

At Novell, two of the areas on which we are very focused in cloud computing are security and identity. We are equally actively involved with cloud security standards for identity because we see this as a major enabler for cloud adoption. I would say yes, standards are critical for cloud computing; otherwise, we end up in yet another proprietary environment that we don’t want to be a part of.

SM: If you were to brainstorm about what standardization would look like in the cloud, what are the areas that are ripe for standardization?

JA: I am not a very technical person, but for me it is the ability to move my workloads in the clouds, whatever they are, from one place to another.

There are two things that are important here. One is portability – moving workloads from one cloud to another – and the other important thing is, let me use the same term that we use to describe it at Novell, the intelligence you build around the workload for it to be able to move from one cloud to another and be managed, secured, and compliant with all the requirements we have. I think we need to have standards address portability in cloud computing.

SM: In terms of pricing models of cloud offerings, what are your preferences? Are they for fixed monthly fees or per user license or usage-based fees? There are fees as a percentage of revenue or a function of number of clients and many other pricing model variations floating around. What is your perspective?

JA: Personally, I am against any licensing approach that is tied to the company revenue or number of clients. You are just tying the cost to the growth of the business that way. Basically, you are taking yourself out of the opportunity of scale. For me, it will depend on what cloud solution I am buying. You might go with per-user-based models or with usage based on time. To me, Sramana, it is difficult to have a general procedure here. It depends upon the solution.

I can tell you, based on the SaaS solutions that we have deployed at Novell, one is based on the number of partners. You can say it is a proxy of users. Another is based on the amount of data, and that is very interesting. It is the people link solution – you basically pay for rows of data. The price is based on the amount that we sent through these vendors to process and report for us. Those models work well for us.

The point I am trying to make is that these different pricing models work depending upon the solution and deployment.

From the Novell perspective, we talk to our customers and service providers who themselves are going into the cloud. We just released a licensing approach which stays specific to these vendors based on value per time consumed.

It is a time-based pricing model that will enable your service provider to deliver the infrastructure to their customer as a service. It is specific to the problem you have at hand, and cloud computing is trying to solve not just one problem but multiple and different problems.

SM: If I understood correctly, you do not like business pricing models that have any correlation with the company’s revenues or number of customers.

JA: No. It would be very difficult for us to agree to something like that where there is a specific cloud solution that is so significant and so relevant to the growth of our revenue that we will tie the licensing with our revenue. This is because the moment the revenue goes up, the cost of that service goes up proportionately. Why do you want to do that unless it is a service that guarantees that revenues would always go up? You usually won’t engage in such conversation.

SM: Are you seeing vendors pushing that model much?

JA: Not in the cloud space. I have seen some traditional ISVs trying to bring in their mix for license. There are some vendors that have very complex licensing models, and they make company revenues, number of clients, and so forth a part of their licensing schemes. So, yes, I have seen this but in traditional vendors.

SM: How comfortable are you buying cloud services with minimal touch points? For example, would you prefer buying from Amazon Web Services (AWS) or from a local value-added reseller (VAR) that is trusted and experienced in your processes and business models?

JA: I think there are two variables. One is timing to get there and the second is the size of the customer. If you are a big enterprise like Novell, when you buy cloud services, you probably won’t go to a small, local provider. But if you are a small or mid-sized business, you will probably rely on them. It depends on your customer and market size in general. As for your point about minimal touch points, I don’t think we are there yet, but I don’t see why not a few years out. A lot of these services can be purchased without any touch points.

SM: Self-service, you mean?

JA: Yes. It depends on the size of customers. If I am a small or medium business, I will be more willing to do that in a couple of years.

[Note to readers: You can find some common SaaS pricing models here.]

This segment is part 4 in the series : Thought Leaders In Cloud Computing: José Almandoz, CIO Of Novell
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