Today's opening general session took on a topic that's been rampant throughout the show this week: The Cloud. We invited a panel from a variety of industry segments—carrier, software vendor, communications platform vendor—plus, to keep them all honest, a lawyer. (Really!)
The lawyer was Marc Lindsey, a partner at Levine, Blaszak, Block & Boothby (or LB3, as they’re generally called). LB3 is the top firm when it comes to negotiating contracts for enterprises, and we thought it'd be good to have a customer advocate on the panel to give us a reality check about what’s actually getting bought and sold, guaranteed and delivered.
Lindsey said that many of the largest enterprises are proceeding fairly cautiously into the cloud because they have many existing investments that they want to maximize before looking towards other solutions. He also noted that the key element of any service—a service level agreement—can be a barrier.
"Enterprise clients think this is mostly toys for small and medium businesses until they can get meaningful SLAs," Lindsey said. Yancey Smith, product management director at Microsoft, said Office 365, Microsoft's hosted offering, offers financially backed SLAs, specifically because they understand how critical such assurances are.
When it comes to the reason why enterprises are considering Smith also cited the twin factors of cost and functionality—i.e., economies of scale and being able to do things you couldn’t do before. Microsoft clearly has an opportunity especially around the former, where Exchange, delivered via the cloud-based Office 365 offering, could capture a significant share of the hosted email market. (Indeed, in Microsoft’s subsequent keynote session, Kirk Koenigsbauer predicted that 50% of the volume in units for Exchange will eventually be in cloud implementations.)
So why would (and are) enterprises considering the cloud?
The question of what you move to the cloud is obviously something that will vary from enterprise to enterprise, and everyone seems to agree that there will be hybrid cloud/prem deployments. And even within the world of the cloud, enterprises need to understand the nature of the technology deployment they’re buying into, according to Eric Schoch, senior director of product management at Cisco. Within a single enterprise’s cloud strategy, it may be that different functionality will be implemented in different ways: Some in a multi-tenant environment, some in a more dedicated setup. And this may depend on the cost or security/compliance profile of the customer.
We also tackled the issue of go-to-market and who you buy from. Marc Lindsey pointed out that your WAN provider—aka your carrier—may have an offering, but if you get your cloud service from them, you could be facing a vendor lock-in situation. He also pointed out that if you look to buy cloud services based on incumbent vendors’ products or services, you may not get the best deal—it can be a good idea to, "break apart your incumbency and seek partnerships with different providers," he said.
Not many enterprises can afford to ignore the cloud, but as this session showed, it's a prospect that has to be considered carefully and within a very broad context.
