Soft IT or SDDC (Software-Defined Data Center)

I like this major new trend known as software-defined data center and this will be a highly disruptive force in enterprise computing. Gone are the days of expensive physical data center owned by large corporations. Now it is the rise of “soft” infrastructure. Virtual machines and virtual networks and storage can be provisioned and reconfigured rapidly and in a highly automated way, rather than being limited by the constraints of hardware infrastructure that was built for a much less dynamic environment. Most of all it makes great economic sense as the resource utilization will be highly efficient.

The “software-defined data center,” as it is commonly known, has business repercussions that go well beyond transforming data center technology. It has shaken long-term alliances between technology giants. Vendors are scrambling to reposition themselves to best exploit this new era of soft IT. VMWare which specialized in the server virtualization business, is expanding to the other areas, such as networking and storage. It recently acquired Nicira for $1.23B to get the software-defined networking business. It also acquired Virsto to get into the storage business.

There are three components here – compute/server, networking, and storage. The server virtualization (many virtual servers in one physical machine, IBM had this concept way back in the 1980s) is well known as VMware pioneered the trend and is the dominant vendor (thanks to the Windows world). However, Microsoft, Citrix, and Red Hat are offering alternative solutions.With almost 70 percent of workloads today running on virtualized servers according to IDC, this is certainly the most evolved component of the software-defined data center to date.

Software-defined network is less mature, but getting high focus now with Cisco, Juniper, and other networking giants entering the fray. In the last category of storage, there is a lot of activities also. Fusion-io went through an successful IPO and it creates storage layer based on flash technology. IBM, NetApp,HP, and EMC are all making moves in this area.

The move to the software-defined data center is the major technology shift of this decade, just as virtualization was in the 2000s and the Internet was in the 1990s. Like those previous shifts, there is a wealth of new opportunities for companies both new and old. This will be interesting to observe and see who wins. The race has a long way to go.

NewSQL – What is it?

There has been a lot of discussion on NoSQL databases over the past couple of years. These databases do not use the Structured Query Language (SQL), the standard data manipulation language for relational databases such as Oracle, DB2, MySQL, Sybase, and SQL Server. The data model is closer to object-oriented data and hence fits well for documents or geospatial data. Being schema-less, they accommodate well for flexible data structures, unlike their relational brethren. Examples of NoSQL databases are MongoDB (most popular), CouchDB, and Cassandra. Programming is easier and rigid consistency is not guaranteed.  They also have scale-out models with replication and sharding (partitioning) for speed. These products support multiple languages.

A new category called NewSQL databases are aiming to provide the scale-out advantages of NoSQL databases, and often their commodity hardware friendliness as well. But NewSQL databases maintain the transactional data consistency guarantees of traditional relational databases, as well as their compatibility with SQL for queries and connectivity (using technologies like ODBC and JDBC).  One such product called NuoDB believes that transactional, analytical and “Web scale,” elastic workloads can be handled by the same database; it’s just a matter of making that the design goal. This is hard to believe until proven!

Another NewSQL product, VoltDB also claims to bring ACID-compliant transactions with analytics. VoltDB focuses on using in-memory technology to perform in situ analysis on financial, clickstream, gaming, and other high-velocity data as it streams in. In the company’s own words, VoltDB is meant to “narrow the ‘ingestion-to-decision’ gap.” There is growing need for instant analysis of transactional data (Real-time BI).

You squander the value of transactional data unless you analyze it as it is being recorded. SAP said much the same thing recently, as it announced the availability of its Business Suite on its HANA in-memory data platform, and fellow NewSQL player NuoDB uses in-memory and asynchronous technology to facilitate similar real-time analyses. Other NewSQL database products include ScaleDB and Clustrix, addressing the scalability needs of MySQL customers. Most of these products are also offering their services in the cloud.

It seems a grand unification process is on its way. Conventional relational databases and NoSQL databases seem to be at opposite ends of a spectrum. NewSQL databases acknowledge the merits in both models and seek to eliminate unreasonable compromise by marrying the approaches. NewSQL products may thus win out, but traditional relational database players may also incorporate NoSQL and NewSQL features to stay competitive. Perhaps that’s why Microsoft announced in November last year that the next major release of its SQL Server relational database will include an in-memory transactional database engine, codenamed “Hekaton.”

Big Data – Status

According to a Wall Street Journal article today by Rachael King and Steven Rosenbush, the market for new databases serving Big Data reached $1.22B last year and is expected to more than double by 2014 (according to research firm Wikibon). That is quite impressive.

Since relational databases using SQl are inefficient in handling data from social chatters, smartphones, and clicks (because of volume and variety), new databases are popping up over last 3-4 years. In the past two years 119 database software companies have been funded by VC’s for $1.17B (according to Venture Source, a Dow Jones company). This is remarkable, as not too long ago, the space was declared taken by 3 incumbents – IBM, Oracle, and Microsoft. However, the scene has changed dramatically now.

Thanks must go to Google for pioneering the start of new innovations in Big Table, GFS (Googel File System), and Map-Reduce algorithms for massively parallel processing using commodity hardware clusters. These technologies became part of Apache open source foundation and the result is Hadoop, HDFS, and several associated tools for the new ecosystem. Amazon, Yahoo and Facebook have also contributed good work here.

The article mentions a client Autozone using one of the new DBMS’s called NuoDB for better managing store inventory according to local shoppers. NuoDb like many others offers a cloud service with an annual subscription, cutting Capex for customers.

Another client Trulia (online real estate) was using MySQL, but has added Cassandra to better manage the listing of home foreclosures and apartment listings of its 100 million homes in the US.

Shutterstcok, a photo agency, stores 24 million images with 10,000 added each day. It uses HDFS (Hadoop) to find out user behavior (how long they hover over an image before purchasing).

The article suggests that large financial clients will stick to existing vendors such as Oracle for various reasons, but the threat of these newcomers is there. This is much like the cloud software  is shaking up Microsoft’s desktop software model.

We are in the data-intensive computing era now and the race will be fierce for leadership and market share.

Five Questions around Big Data

Data is the new currency of business and we are in the era of data-intensive computing. Much has been written on Big Data throughout 2012 and customers around the world are struggling to figure out its significance to their businesses. Someone said there are 3 I’s to Big Data

• Immediate (I must do something right away)
• Intimidating (what will happen if I don’t take advantage of Big Data)
• Ill-defined (the term is so broad that I’m not clear what it means).

In this blog post, I would like to pose five key questions that customers must find answers to with regards to Big Data. So here goes.

1. Do I understand my data and do I have a data strategy?

There are varieties of data – customer transaction data, operational data, documents/emails and other unstructured data, clickstream data, sensor data, audio streams, video streams, etc. Do I have a clear understanding the 3V’s of Big Data – Volume, Velocity, and Variety? What is data “in motion” vs. data “in rest”? Data in motion demands split-second decisions and do I have such tools? Every data source must be understood followed by their attributes and growth projections.

Customers must have an overall data strategy based on their business importance. For example, business critical data must be highly reliable, secure and of high performance. A data policy must be in place to take care of volume, growth, retention, security and compliance needs.

2. What are my reporting needs to transform my business and give me insights for growth?

Businesses are transforming to stay ahead of the competition. While we asked, “what happened” in the past, now it is “why did it happen and what is going to happen?”. From data collection, we have to move to data analysis. Instead of analyzing existing business, we must create new business. Therefore, the retail industry wants to give “today’s recommendation” on the fly to clients; internal IT needs operational intelligence to make it more efficient; customer service must provide customer insight; and fraud management must look at social profiles to reduce fraud. The list goes on…

Do you have a clear understanding of your reporting needs via data visualization on mobile devices like the iPad with touch interface? You will need a strategy of all the analytic tools for key employees/executives to make quick business-relevant decisions.

3. How do I drastically reduce my TCO of Data Warehousing and BI?

Many large enterprises are spending millions of dollars to move operational data to a data warehouse via ETL tools (Extraction, Transformation, Loading). This can be expensive and time consuming. Sears, for example, has a slogan “ETL must die”. By moving to Hadoop, they reduced the ETL time from 20 hours to 17 minutes. They claim serious cost reductions by moving from traditional ETL to direct loading of raw data to Hadoop servers. Today’s implementations must be studied for price-performance and newer technologies can bring down costs and improve processing time drastically. Would you like to develop reports in days rather than weeks?

4. How does Big Data co-exist with my current OLTP and DW data?

All enterprises have business-critical operational systems (OLTP). These are using traditional DBMS systems (such as Oracle, DB2, IMS, etc.). They also created separate Data Warehousing systems with BI tools for analysis. Now the new world of Internet data such as chatters from social networks and Web Log data (digital exhaust) are adding to the complexity. What is your approach to data integration of the legacy vs. new data?

5. What is the right technology for my needs?

I keep hearing so many new terms and vendor names – Hadoop, Cloudera, Hortonworks, Datameer, NoSQL, MongoDB, Map-reduce, Data Appliance, HBase, etc. It surely can be very confusing!

I need to know what is the right technology for my needs. If I have petabyte volumes data coming from various sources, what technology can I implement to efficiently handle that? Then, how do I get relevant information from that pile to help my business insights? I also need to know what skills I need to do that and the cost. I need an implementation roadmap for getting value from all the data that my business is coming up with.

CES 2013, Las Vegas

I attended two full days of this year’s CES (Consumer Electronics Show) in Las Vegas. What a show that was! 150,000 people moving about the convention center and the Venetian hotel (venues for all the exhibits).

I used to attend Comdex many years back, but that was replaced by CES and it’s focus has broadened to all kinds of consumer products – TV, Tablets, cameras, audio, smart phones, etc. As expected, we are living in a connected world and smart devices are all over. Whereas the past years centered around the PC and Microsoft, this year’s CES did not even have Microsoft as a participant (remember how Bill Gates used to make major announcements at Comdex?). This year’s keynotes were delivered by Qualcomm, Panasonic, Samsung, and Verizon. Mobile devices were the big thing, as Android phones were on display by all major vendors. There were too many iPhone/iPad accessories on display, so much so that you get tired of it.

Walking the halls of the convention center requires lots of physical strength, as one could walk 10-15 miles in a day. The LG booth was very impressive with 3D Television on a giant curved screen, where objects come to hit your face. The big news was the giant 80 to 100 inch TVs going for $20,000 – all 4k HD technology with unprecedented clarity of pictures. LG even showed 50 inch curved TV (called flexible display). The OLED TV is extremely thin. The real big news is connectivity. From the tablet to the TV to the laptop screen, events can move wirelessly. Apple clearly has changed the landscape with its touch interface in iPhone and iPad and everyone now offers similar tablets coming in all sorts of sizes. Interestingly, Apple does not have a booth nor its executives ever speak at this event.

Marc Benioff was there at a keynote session and he spoke about how the convergence of consumers and business is happening. Several panels talked about cloud contents and regulatory challenges. The FCC chairman Julius Genachowski was there also talking of broadband, spectrum reform, and competition policy matters. I listened to an interesting presentation of the future UI – called NUI (Natural User Interface) based on multi-touch, vocal, gesture and neural modes. It is good to see HTML5′s Touch event spec V2 is being readied for standardization.

For an enterprise software guy like me, this show may look less relevant, but enterprises are impacted in a big way by the consumer devices and technology. Hence we have the phrase “consumerization of IT” and BYOD. The Cloud is blurring the difference between personal software and work software as they have to intermingle and mesh.

It was a worthwhile experience to see all the advancements happening in such a fast pace. I particularly enjoyed the new stuff in robotics and programmable 3-D manufacturing.

Tech thoughts for 2013

Last year, we saw three trends making lots of noise and a fourth one closely following – Cloud Computing, Big Data, Mobility, and Social networking for the enterprise. Let me comment on each one as we enter 2013.

In cloud computing, the focus shifts to Platform as a Service (PaaS) as SaaS is now accepted into the mainstream. CRM and HR applications dominate the space with SalesForce.com and Workday as leaders. Microsoft, for example, is evolving its Windows Azure from a PaaS to Infrastructure-as-a-service (IaaS). Last year, it added persistent-state virtual machine support to Azure, allowing it to accommodate a wider variety of software, including Linux. Microsoft also introduced Hadoop for Azure and support for MapReduce. Amazon’s AWS stack now blurs the boundary between PaaS and IaaS. SalesForce.com wants to be a PaaS player via its Force.com platform for developing any SaaS offering. Besides CRM/HR cloud apps., we have seen emergence of financial apps for midsize companies – Adaptive Planning, Anaplan, Host Analytics, and Tidemark are some example companies.

In Big Data, the focus will shift more to analytics and data visualization. The other key trend is “data in motion”, where capture and analysis can be done for split-second decisions. The post-Hadoop era has started and we see a host of new players offering near-realtime data reduction and analysis. This trend will accelerate. A set of NewSQL players (not NoSQL) are adding scale and performance to Postgres or MySQL, that can also be offered as a cloud service. Relational databases like IBM’s DB2 and Oracle will dominate the enterprise space, given its long years of proven robustness and reliability. However extreme scale in the order of petabytes will attract newer solutions.

Mobility is a given, thanks to the outselling of iPads over PC’s. Last year iPad sales  exceeded Lenovo’s number of PC sales. Cloud computing assumes user devices like iPad, Android, and smart-phones for users. Apple boasts over 700,000 iOS applications. Microsoft has a lot of catching to do with its slow sales of Surface RT. Going forward, every enterprise application must design its UI to the form factors of mobile devices. This will be a price of entry for any vendor. Gone are the drop-down icons on Windows as UI.

Social networking has grown a great deal for consumers, but enterprises are still struggling to figure out the proper usage and business benefits. Social will come into the organization through the back door (much like how PC’s entered the business during the 1980s and 1990s). A communication director may test out a company page on Facebook or customers complaining about or praising your company on their Twitter profiles or traditional enterprise applications being updated with social capabilities, there will be social. Hence it may be worthwhile your company should have some policy around social. I think enterprise applications will integrate more social features. Someone said that Facebook will matter less, but Twitter and Pinterest will be of more significance.

Welcome to 2013.

Cloud Computing in 2013

Marc Andreesen, said recently that 2012 will be remembered as the year of SaaS. What he meant is that SaaS has been around for a while, but it came off age this year, with examples of successes such as the Workday IPO. No one questions the significance of SaaS any more. But the year 2013 will see a shift to PaaS (Platform as a Service) with “most” new activities. There is already a blurring of the lines between IaaS and PaaS, as seen from Amazon’s AWS stack. But programmatic interface in PaaS will dominate as we move forward, catering to the developer community. The incumbents such as IBM, Oracle, SAP, Microsoft, and Adobe (representing “on-premise” software) will have to combat with pure-play cloud players.

I saw a list of cloud pioneers and new cloud tools that should be worth sharing. Among the names (arguably) of cloud pioneers here are the often quoted – Warren Vogel (Amazon CTO), Chris Pinkham (architect of EC2, now head of start-up Nimbula), Randy Bias (CloudScaling, formerly GoGrid), Jonathan Bryce (Rackspace/Openstack), Lew Tucker (CISCO), Rich Wolski (Eucalyptus), Chris Kemp (NASA CTO), Urs Holzle (Google), and Frank Frankovsky (Facebook). You can google their names to see the pioneering work they have done in moving cloud computing forward.

I also saw some new cloud tools as we enter 2013: Evernote (categorize notes, PDF, image, etc.), RightSignature (doc. signing), Expensify (expenses to cloud), Square, Teambox, Backupify, RenewOnDemand. These tools are taking traditional desk-top apps. to the cloud.

Several lists are floating around on winning software startups in 2013: In the Big Data and analytics space – Cloudera, Actian, SiSense, Appranaissance, Appature, and Good Data. In Cloud and Mobile space: many cloud-native startups, CloudPassage, Facebook (new userid and security logon), Xamarian, Sensha, Square, Airbnb, Marian Software and many other HTML5 tools and platform vendors.

One thing for sure – we will see the cloud space getting hotter and hotter in 2013.

Travelog – Bangalore in November 2012

Visiting India is always an interesting experience no matter how frequently one travels there. My first trip to Bangalore was almost 40 years back, as a summer trainee during my undergraduate years. Now the same city looks so different! Concrete jungle is everywhere and the long ride from the airport is a reminder of the growth also. On the flight from London, the Indian gentleman next to me lives in Tampa, but travels to India every 3 months. He runs an empire of Indian companies (distillery, hospitality,..) worth Rupees 6000 Million ($120 Million) with over four thousand employees.

The American lady sitting next to me on the flight back to London says she is with Ernst and Young and will move to Bangalore in January for two years. She grew up in the mid-west and currently lives in Dallas. She will move there with her dog. The rental apartment charges Rs.80,000 per month ($1600) which is exorbitant and higher for foreigners, something I fail to understand. The rental does not include any appliances nor utilities which means it will cost her more than $2000 per month. But she was looking forward to her two years in the E&Y’s Bangalore office. India seems so expensive these days, gone are the cost advantage of hiring programming skills. The ratio used to be 4:1 (four programmers for the cost of one in USA). Now it will be less than 2:1, more like 1.5:1.

I saw iPads and iPhones all over the place. Free wi-fi in hotels is expected and service is quite good. In Bangalore the USA does not feel far. Anyone you see at work, travels frequently to US and Europe. IBM India has over 100,000 employees, more than the number in the USA. During my IBM years in Canada and USA, the company had left India (due to its archaic rule of majority ownership by a local company), subsequently started operating the India business out of Singapore. After the 1991 change of policy, IBM re-entered India and has been growing ever since. Even there is an IBM research unit in New Delhi. Oracle started its India operations in 1993 and has big off-shore development groups in Hyderabad.

I had breakfast with a friend who had moved to Bangalore from the bay area two years back. He complained about small day-to-day hassles of living in that city such as – getting a broadband line at home, or getting a credit card at a local bank. These activities which are simple and straightforward in the US, are non-trivial tasks there. Wherever the government bureaucracy gets involved, inefficiency rises quickly. India continues to struggle between the march towards modernity vs the pullback by the old-school politicians and the bureaucrats. My friend plans to head back to the bay area in a year or two.

Getting top-quality skills are as hard there as it is here. The state of Andhra Pradesh produces 200,000 engineers per year, but only 15% get employment. The quality is really bad. It’s mass production without depth of knowledge. Some of these youngsters are without jobs for two years after graduation. There seems to be a general slowdown in hiring. The well known services companies are facing a hard time with growth. The start-up culture is quite feeble compared to what we see here in Silicon Valley. Some friends were not very complimentary in their comments on the local VC’s and their attitude towards funding early-stage product companies.

Still there was lots of interest in the latest trends – cloud computing, big data, and mobility. As the technology and IT world shifts, India seems slow to adopt to changing trends. Young engineers still pay big money to get SAP, Oracle and Java training. Terms like Hadoop, Dremmel, Pregel, Cassandra, Twitter Storm, etc. are unfamiliar to the local techie conversation. Given the trend towards cloud applications such as Workday, the need for customization and services will be much less (Workday claims an 80% reduction in services cost). Hence the future of many Indian services companies will have to change towards a different value proposition as well.

India will continue to fascinate as always. A land of paradoxes with quick adaptability.

Big Data at Sears

Sears plus Kmart belong to Sears Holdings, whose goal is to get closer to its customers and increase customer loyalty. That requires big time data analytics capabilities for consumer behavior. While revenue at Sears has declined from $50B in 2008 to $42B in 2011, rivals like Wal-Mart, Target and Amazon have grown steadily with better profits. Amazon’s business  has grown from $19B in revenue in 2008 to $48B in 2011, passing Sears for the first time.

Sears used IMS (IBM’s first generation database product) on mainframe plus Teradata. Its ETL process using IBM DataStage software on a cluster of distributed servers took 20 hours to run. Since their adoption of Hadoop back in 2010, one of the steps (taking 10 hours out of the 20 hours) ran at 17 minutes. Their slogan is “ETL must die”, as they would like to load raw data directly to Hadoop. The old systems consisted of EMC Greenplum, Microsoft SQL Server, and Oracle Exadata (four boxes) for analytical workload. That is all being replaced by Hadoop, Datameer, MySQL, and InfoBright. Teradata is staying.

Sears’ process for analyzing marketing campaigns for loyalty club members used to take six weeks on mainframe, Teradata, and SAS servers. The new process running on Hadoop can be completed weekly. For certain online and mobile commerce scenarios, Sears can now perform daily analyses. The Hadoop systems at 200 Terabytes cost about one-third of 200-TB relational platforms. Mainframe costs have been reduced by more than $500K per year while delivering 50-100 times better performance on batch jobs. The volume of data on Hadoop is currently at 2 Petabytes. As the CTO says, Hadoop is no longer a science project at Sears – critical reports run on the platform, including financial analyses; SEC reporting; logistics planning; and analysis of supply chains, products, and customer data. Sears uses Datameer, a spread-sheet style tool that supports data exploration and visualization directly on Hadoop. It claims to develop interactive reports in 3 days that used to take 6 to 12 weeks before.

Sears has actually spun off a new subsidiary called MetaScale to offer cloud services to other retailers with Hadoop platform. They are leveraging their three years of acquired expertise in Hadoop to make money in analytic services. There are many open questions on whether Hadoop will be that platform that brings big success to Sears in the future.

Workday IPO this morning

The seven-year old company Workday, founded by Peoplesoft founder David Duffield went IPO this morning and immediately jumped 71%. The IPO price was set for $28 and it is treading around $48 after 3 hours. The market cap is reaching a whopping $6.5B. This also makes Duffield very wealthy with his 44% ownership ($2.5B). The co-CEO Anil Bhusree (Greylock Partners) is also a billionaire with his 17% stake in the company. Both started Workday after the hostile takeover of Peoplesoft by Oracle back in 2005. The total investment in Workday was over $200M and its revenue has been growing steadily, probably reaching over $500m at the end of next fiscal year.

Workday provides cloud-based human resources, payroll and financial management tools. So what is new? I think they have learnt from their deep experience at Peoplesoft and built this company to provide great user experience at much lower cost. Offering this as SaaS reduces capex and also much reduced consulting expenses (as much as 80%). Oracle or SAP applications require a hefty “services” cost, as consultants are brought in to customize and install the software. It is said that for every product license dollar, customers need to spend $6 to $7 in consulting. Workday aims at replacing the legacy in-house packaged applications such as SAP and Oracle. Recently companies like HP and Google have announced to endorse Workday for their internal use.

Workday started in the human resource area, but is expanding to financial management and eventually to ERP. The secret is in the architecture and design and ease-of-use. By making it multi-tenant and fast and using touch UI via tablets, they appear very modern and attractive. They have spent the time carefully building this product for the enterprise user, used to very archaic interfaces of charts and graphs and complex management.

Oracle and SAP are not sitting idle. In the human resource area, Oracle has bought Taleo (offered as cloud service) and SAP bought Success Factors. The other set of competition comes from SaaS companies such as SalesForce.com, Netsuite, and several niche players. It will be interesting to see how Workday manages its growth over next 2-3 years.