Progress Software’s Cloud Lesson

Progress Software, one of several firms engaged in a complicated (to buyers) activity called “SOA Governance” is shifting its business and its development focus to the cloud.  Given that SOA is likely to be the future of the cloud, as I’ve been saying, you might find this a curious move.  What it illustrates is the power of marketing hype.

The cloud is the hottest topic in IT.  SOA in any form is first old-hat and second complicated.  You can’t get an editor to run a SOA story because nobody will click on the URL, they won’t serve ads, and nobody makes money.  Cloud clicks are a given, hence you’re a cloud player.  It’s cynical, sure, but when has marketing (or the media) not been cynical?

The challenge for the cloud, beneficiary of all of this ad-click-driven largesse, is that the same mindset is undermining any realistic coverage, and thus any helpful discourse.  Cloud planning is taking enterprises much longer to accommodate than previous technology waves.  In the past, we went from an announcement of a technology with breakthrough benefit potential to full realization of the adoption rate in about 2 years.  In the case of the cloud, we’re staggering below the one-percent-of-opportunity level at that same point.

Some vendors appear to be thinking that the fact that there’s a massive cloud hype wave means they can ignore the cloud and the changes it will bring, which is yet another danger.  Hey, this cloud stuff is hype so let’s get down and focus on pushing boxes the old-fashioned way.  A chicken in every pot, a router—no TWO routers— in every network.  What Prospect really proves is that hype drives the project approval mindset.  It may not guarantee a project will succeed, but running against the hype tide creates a fair certainty of project failure.  Buyers need to have management buy-in, and that’s created in no small part by the editorial climate of the market.

Speaking of routers, UBS says that the service provider router market is “maturing”, by which they mean that the heady days of explosive growth and expanding margins are gone.  Both edge and core routing are expected to under-perform in growth terms, undermined by the cost-savings drive that’s always going to accompany growing traffic in the face of static revenue.  One point they make that’s particularly interesting is that caching (CDNs) have an impact here.  Operators told us that spending on caching produced twice the benefit of spending on capacity.  OTN and agile-optic core networks are also aimed at the cost line, and OpenFlow is likely to be used primarily to reduce cost as well.  Why?  Because nobody is talking benefits, top-line gains, in any effective way.  Will these guys NEVER get it?  Apparently not, but it’s already starting to hit their bottom lines.

Look, as an example, at AT&T.  Here’s a company that’s now betting on home security and automation (as Verizon already is) to boost its consumer revenues.  The network vendors have little to offer in this space; Cisco bought a home-gateway-management player and that was about all anyone could think of apparently.  This is a cloud-hosted service feature, guys!  This is what you could have, and should have, been planning to support for at least four years now.  The earliest operator presentations into the hosted-feature model go back that far.  Today, I call this a “cloud” application in part because that’s what operators are calling it, and in part because their conception of the feature-hosting framework has shifted to become one built on an IT vision—cloud computing.  What happened to the network vision?  It never really got going in time, even at places like Alcatel-Lucent or NSN who today tell a decent story.  Today, it’s not news and so absent incredibly effective promotion (and what network vendor has been capable of that) it’s not going to get any traction.

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