451’s container orchestration usage survey – Notebook


As part of CoreOS’s conference this week, 451 put out a sponsored study on container orchestration. It’s been much cited and is free, so it’s worth taking a look. Here’s my highlights and notes:

  • Leadgen yourself to CoreOS get a copy of the report.
  • This report is really more of a “container orchestration usage” report than much about “hybrid cloud.”
  • Demographics:
    • “We surveyed 201 enterprise IT decision-makers in April and May 2017. This was not a survey of developers; rather, we received responses from those in C-level and director-level positions, including CISO, CTO, CIO, director of IT, IT Ops and DevOps, and VPs and managers of IT.”
    • All from the US
    • “All of our survey respondents came from organizations using application containers, and all were familiar with their organization’s use of containers.” – This survey, then, tells you what people who’re already using containers are doing, not what the entire market is thinking and planning on.
    • “A significant slice of the survey respondents represented large enterprises.”
  • Organizations are hoping to use containers for “[a] ‘leapfrog’ effect, whereby containers are viewed as a way to skip adoption of other technologies, was tested, and a majority of respondents think Kubernetes and other container management and orchestration software is sufficient to replace both private clouds and PaaS.”
  • Obviously I’m biased, being at Pivotal, but the question here is “to do what?” As we like to say around here, you’re going to end-up with a platform. People need a “platform” on-top of that raw IaaS, and as things like Icito show (not to mention Pivotal’s ongoing momentum), the lower levels aren’t cutting the mustard.
  • There’s an ongoing semantic argument about what “PaaS” means to be mindful of, as well: in contexts like these, the term is often taken to mean “that old stuff, before, like 2009.” At the very least, as with Gartner’s PaaS Magic Quadrant, the phrase often means means “only in the public cloud.” Again, the point is: if you’re developing and running software you need an application development, middleware, and services platform. Call it whatever you like, but make sure you have it. It’s highly likely that these “whatever you want to call ‘PaaS’ PaaSes” will run on-top of and with container orchestration layers, for example, as Cloud Foundry does and is doing.
  • That said, it’s not uncommon for me to encounter people in organizations who really do have a “just the containers, and maybe some kubernates” mind-set in the planning phase of their cloud-native stuff. Of course, they frequently end-up needing more.
  • Back to the survey: keeping in mind that all respondents were already using containers (or at least committed to doing so, I think), ~27% had “initial” production container use, ~25% of respondents had “broad” containers in production. So, if you were being happy-path, you’d say “over half of respondents have containers in production.”
  • In a broader survey (where, presumably, not every enterprise was already using containers), of 300+ enterprises, production container use was: 19% in initial production, 8% were in broad production implementation.
  • Nonetheless, 451 has been tracking steady, high growth in container usage for the past few years, putting the container market at $2.7B by 2020 and $1.1bn in 2017.
  • As the report says, it’s more interesting to see what benefits users actually find once they’re using the technology. Their original desires are often just puppy-love notions after actual usage:

  • Interesting note on lock-in: “Given that avoiding vendor lock-in is generally a priority for organizations, it might seem surprising that it was not ranked higher as an advantage since much of the container software used today is open source… However, our respondents for this study were users of containers, and may have assumed that the technology would be open source and, thus, lock-in less of a concern.” (There’s a whole separate report from Gartner on lock-in that I’ll take a look at, and, of course, some 140 character level analysis.)
  • On marketshare, rated by usage, not revenue:

  • On that note, it’s easy to misread the widely quoted finding of “[n]early three-quarters (71 percent) of respondents indicated they are using Kubernetes” as meaning only Kubernetes. Actually, people are using many of them at once. The report clarifies this: “The fact that almost 75% of organizations reported using Kubernetes while the same group also reported significant use of other container management and orchestration software is evidence of a mixed market.”

As one last piece of context, one of the more recent Gartner surveys for container usage puts usage at around 18%, with 4% of that being “significant production use”:


Of course, looks at more specialized slices of the market find higher usage.

This early in the container market, it’s good to pay close attention to surveys because the sample size will be small, selective, and most people will only have used containers for a short while. But, there’s good stuff in this survey, it’s definitely worth looking at and using.

Analysis of Mary Meeker’s Internet Trends – Notebook


Each year, Mary Meeker and team put together the Internet Trends report that draws together an ever growing collection of charts and analysis about the state of our Internet-driven world, from the latest companies to industry and economic impact. Over the years, the report has gone on to include analysis of markets like China and India. Being a production of the Kleiner Perkins Caufield & Byers venture capital firm, the focus is typically on new technologies and the corresponding business opportunities: you know, the stuff like “millennials like using their smartphones” and the proliferation of smartphones and Internet globally.These reports are good for more than just numbers-gawking, but can also give some quantitative analysis of new, technology innovations in various industries. The consumer and advertising space consumes much of this business analysis, but for example, in this year’s report, there’s an interesting analysis of health-care and transportation (bike sharing in China!). For enterprises out there, it may seem to over-index on startups and small companies, but that doesn’t detract from the value of the ideas when it comes to any organization looking to do some good, old-fashioned “digital transformation.”

Normally, I’d post my notebook things here, but the Pivotal blog overlords wanted to put this in on the Pivotal blog, so check it out there.

Figuring out fixing federal government IT – Notebook

In the US, we love arm-chair strategizing government IT, in particular federal IT. Getting your arms around “the problem” is near impossible.

What do we think is wrong, exactly?

As citizens, our perceptions seem to be that government IT has poor user experience, none at all (there’s no app to do things, you have to go to an office to fill something out, etc.), and that it costs too much. More wonky takes are that there’s not enough data provided, nor insights generated by that data to drive better decision making.

When I’ve spoken with government IT people, their internal needs revolve around increasing (secure) communication, using more modern “white-collar” tools (from simply upgrading their copies of Office, to moving to G Suite/Office 365 suites, or just file sharing), and addressing the citizen perceptions (bringing down costs, making sure the software, whether custom made or “off the shelf,” have better customer experiences.

Is it so hard, really?

It’s also easy to think that government is a special snow-flake, but, really, they have mostly the same problems as any large organization. As highlighted below, the government contracting, procurement, and governance processes are more onerous in government IT, and the profile of “legacy” systems is perhaps higher, but, worse, more of a pull down into the muck.

From my conversations, one of the main barriers to change is systemic inertia, seemingly driven by avoidance of risk and overall lack of motivation to do anything. This lack of motivation is likely driven by the lack of competition: unlike in the private sector, there’s no other government to go to, so there’s no fear of loosing “business,” so what care to change or make things better?

Anyhow, here’s a notebook of federal government IT.

“Legacy”

  • “92 percent of Federal IT managers say it’s urgent for their agency to modernize legacy applications, citing the largest driving factors as security issues (42 percent), time required to manage and/or maintain systems (36 percent), and inflexibility and integration issues (31 percent)” from an Accenture sponsored 2015 survey of “150 Federal IT managers familiar with their agency’s applications portfolio”
  • Theres a large pool of legacy IT, though not as large as you might think: ~60% of portfolio are from before 2010(https://www.gartner.com/document/3604417).
  • That said, the same report says that ~25% of portfolios are pre-1999, with 5% from the 1980’s.
  • On spending: “The government has been reporting that 75 to 80 percent of the federal IT budget is spent on running legacy (or existing) systems.”
  • But, actually, that’s pretty normal: “That may sound alarming to those who aren’t familiar with the inner-workings of a large IT organization. However, the percentage is in-line with the industry average. Gartner says the average distribution of IT spending between run, grow and transform activities — across all industries — is 70 percent, 19 percent and 11 percent respectively. Those numbers have been consistent over the past decade.”
  • However, the spending items above are from Compuware’s CEO, who’s clearly interested in continuing legacy spending, mostly on mainframes.

Priorities

Source: “2017 CIO Agenda: A Government Perspective,” Rick Howard, Gartner, Feb. 2017.

Other notes:

  • In the same survey, data & analytics skills are the leading talent gap, with security coming in second. Everything else is in the single digits.
  • Why care about data? On simply providing it (and you, know, the harder job of producing it), the UN e-Government survey says “Making data available online for free also allows the public – and various civil society organizations –to reuse and remix them for any purpose. This can potentially lead to innovation and new or improved services, new understanding and ideas. It can also raise awareness of governments’ actions to realize all the SDGs, thus allowing people to keep track and contribute to those efforts.”
  • And, on analytics: “Combining transparency of information with Big Data analytics has a growing potential. It can help track service delivery and lead to gains in efficiency. It can also provide governments with the necessary tools to focus on prevention rather than reaction, notably in the area of disaster risk management.”
  • Reducing compliance and overall “bureaucracy” is always a problem. My benchmark case is an 18F project that reduced the paperwork time (ATO) down from 9-14 months to 3 days.

The workloads – what’s the IT do?

  • And, while it’s for the Australian government, check out a good profile of the kinds of basic services, and, therefore, applications that agencies need, e.g.: booking citizenship process appointments, getting permits to open businesses, and facilitating the procurement process.
  • If you think about many of the business services governments do, it’s workflow process: someone submits a request, multiple people have to check and co-relate the data submitted, and then someone has to approve the request. This is a core, ubiquitous thing handled by enterprise software and, in theory, shouldn’t be that big of a deal. But, you know, it usually is. SaaS offerings are a great fit for this, you’d hope.

The problems: the usual old process, expensive COTs, contractors, compliance

  • If you accept that much of government IT is simple workflow management, much of the improving the quality and costs of government IT would likely come from shifting off custom, older IT to highly commoditized, cheap (and usually faster evolving, and more secure), SaaS-based services.
  • Jennifer Pahlka: “When you consider that much of what ails government today is the use of custom development at high cost when a commodity product is readily and cheaply available, we must acknowledge that agile is one useful doctrine, not the doctrine. “
  • So, if you do the old “IT – SaaS = what?” you suck out a lot of resources (money, attention, etc.) by moving from janky, expensive COTs systems (and all the infrastructure and operations support needed to run them). You can both cut these costs (fire people, shut down systems), and then reallocate resources (people, time, and money) to better customizing software. Then, this gets you back to “agile,” which I always read as “software development.”
  • In my experience, government IT has the same opportunities as most companies, taking on a more “agile” approach to IT. This means doing smaller, faster to release batches, with smaller, more focused, “all in teams.” Again, the same thing as most large organizations.
  • An older survey (sponsored by Red Hat): “Just 13% of respondents in a recent MeriTalk/Accenture survey of 152 US Federal IT managers believed they could ‘develop and deploy new systems as fast as the mission requires.’”
  • Mikey Dickerson, 2014: “We’ll break that up by discouraging government contracts that are multibillion-dollar and take years to deliver. HealthCare.gov would have been difficult to roll out piecemeal, but if you, a contractor, have to deliver some smaller thing in four to six weeks while the system is being constructed, you’ll act differently.”
  • Government contractors and procurement are a larger problem in government IT, though. The structure of how business is done with third parties, and the related procurement and compliance red-tape causes problems, and, as put by Andrew McMahon, it creates “a procurement process that has become more important than the outcome.”
  • While there’s “too much” red-tape, in general we want a huge amount of transparency and oversight into government work. In the US, we don’t really trust the government to work efficiently. This become frustrating ironic and circular, then, if your position is that all of that oversight and compliance is a huge part of the inefficiency.
  • As put by one government CIO: “Government agencies, therefore, place a business value on ‘optics’—how something appears to the observant public. In an oversight environment that is quick to assign blame, government is highly risk averse (i.e., it places high business value on things that mitigate risk)…. the compliance requirements are not an obstacle, but rather an expression of a deeper business need that the team must still address.”

Success story

  • Tom Cochran: “While running technology for Obama’s WhiteHouse.gov, open-source solutions enabled our team to deliver projects on budget and up to 75% faster than alternative proprietary-software options. More than anything, open-source technology allows governments to utilize a large ecosystem of developers, which enhances innovation and collaboration while driving down the cost to taxpayers.”
  • As with “agile,” it’s important to not put all your eggs-of-hope in one basket on the topic of open source. My theory is that for many large organizations, simply doing something new and different, upgrading – open or not – will improve your IT situation:
  • While open source has different cost dynamic, I’d suggest that simply switching to new software to get the latest features and mindset that the software imbues gives you a boost. Open source, when picked well, will come with that community and an ongoing focus on updates: older software that has long been abandoned by the community and vendors will stall out and become stale, open or not.
  • One example of success, from Pivotal-land, is the IRS’s modernization of reporting on diligent taxes. It moved from a costly, low customer service quality telephone based system to an online approach. As I overuse in most of my talks, they applied a leaner, more “agile” approach to designing the software and now “taxpayers have initiated over 400,000 sessions and made over $100M in payments after viewing their balance.”

If you’re really into this kind of thing, you should come to our free Pivotal workshop day in D.C., on June 7th. Mark Heckler and I will be going over how to apply “cloud-native” thinking, practices, and technologies to the custom written software portion of all this. Also, I’ll be speaking at a MeetUp later that day on the overall hopes and dreams of cloud-native, DevOps, and all that “agile” stuff.

The Bathroom Bill, Texas SB6 – Notebook

As you can imagine, things like the so-called “bathroom bill” drive me crazy. It also makes me sad for whatever happened to my fellow Texans, who support it, that they’d be this cruel, uninformed, and ignorant. And, of course, there’s the people effected.

Stealing some of Matt Ray’s notes for our Software Defined Talk recording, here’s a notebook and highlights on the topic.

  • The Hillbillies are obsessed with bathrooms
    • It’s really depressing how aggressively stupid Texas is sometimes. I don’t blame anyone avoiding it.
    • “The consequences of this bill are beyond severe. Not only can transgender people be arrested and jailed for using the bathroom, but they will be assumed to be pedophiles, and be put on the Texas sexual predator watch list. So not only is there the possibility of being hauled off to jail during a conference, the arrest will ruin the rest of your life. Just because you need to pass some water.”
  • Current status: The bill is having trouble in the Senate, however, part of it is about removing a requirement to provide multi-user bathrooms in schools.
    • More: “The differences on the bathroom bill are substantial. The Senate would require transgender Texans to use the restrooms in publicly owned buildings that match their biological sex and would bar local governments from adopting or maintaining their own laws on the subject. The House version would apply only to elementary and secondary schools; after it passed last weekend, Patrick and others criticized it as a change that does very little.”

How’d it go in North Carolina?

  • AP analysis of economic effect in North Carolina, from March 2017:
    Losses of $313m a year – “$3.76 billion in lost business over a dozen years.”
    Some examples, not just bleeding-heart tech companies: “Those include PayPal canceling a 400-job project in Charlotte, CoStar backing out of negotiations to bring 700-plus jobs to the same area, and Deutsche Bank scuttling a plan for 250 jobs in the Raleigh area. Other companies that backed out include Adidas, which is building its first U.S. sports shoe factory employing 160 near Atlanta rather than a High Point site, and Voxpro, which opted to hire hundreds of customer support workers in Athens, Georgia, rather than the Raleigh area.”
    Most of it is from businesses like Paypal and Deutsche Bank pulling out – good for them!

    • “Bank of America CEO Brian Moynihan — who leads the largest company based in North Carolina — said he’s spoken privately to business leaders who went elsewhere with projects or events because of the controversy, and he fears more decisions like that are being made quietly.”
  • For context, The North Carolina economy: “In 2010 North Carolina’s total gross state product was $424.9 billion. In 2011 the civilian labor force was at around 4.5 million with employment near 4.1 million. The working population is employed across the major employment sectors.”
  • So, rough estimate of economic impact is: a decrease of 0.07%/year (this is a bad number since it’s based on 2010 GDP and other forward looking estimates, however, it gives you a ball-park sense.) However, see scenario for larger impact for the future below (I mean, not to mention being a dick-heads and treating people as subhuman for no good reason other than being fucking social-idiots):

Money and jobs prospects for Texas

  • Back to Texas, the next 10 years are critical for North Texas. Many large, international enterprises are setting up big campuses up there in DFW.
    For example, Toyota relocated their NA headquarters there.

    • For Toyota, this means something on the order of 1,000 new jobs in Texas, with an estimated 2,800 existing employees who’ll move to Texas. That’s a lot of new HEB customers, home buyers, and taxpayers.
  • Now, think of other G2000 companies that would want to move to Texas, or beef up their existing presence. The companies will be deciding what to do in the next 2-3 years, and if they skip on Texas, that will be decades of lost cash, not to mention new Texans.
  • Also, from Texas Association of Business: “The business group released a study last month warning that legislation like the transgender bathroom bill could cost the state economy up to $8.5 billion a year and threaten 185,000 jobs.” (Meanwhile, that organization has “remained neutral.”)

Why in the first place?

  • So, what’s the big deal for those in favor of it in the first place? Well, obviously, the idea that there’s “wide-stances” going on is bunk (more).
  • One can only conclude that supporters are confused (and, thus, afraid): there’s a fundamental disagreement about gender and sexuality. But, also, there’s just downright discriminatory. We’ve lived through this before with the gay marriage movement int he past 20 years and know how to spot veiled discrimination.
  • As one ACLU person put it: “that fundamentally [supporters of bathroom bills] just don’t think of transgender people as humans, and they try to erase trans people from existence.””
  • The Economist describes the people effected: ‘The heart of the bill is its concept of “biological sex”; lawmakers define it as “the physical condition of being male or female, which is stated on a person’s birth certificate”. This definition is fraught for several reasons. First, as many as 1 in 1,500 babies are born with ambiguous genitalia that qualify them as “intersex”, though that designation was only used for the first time last week, when a Brooklyn-born, 55-year-old California resident received a revised birth certificate from New York City in the mail. Second, thousands of the 1.4m transgender Americans have had sex-reassignment surgery, which means that many people who were designated as male or female at birth now have “the physical condition” of being another gender. And for transgender people who retain the biological markers of their original gender identification (because they choose not to undergo surgery or cannot afford it), the fact of their sense of themselves remains. Many transgender women and men feel not only uncomfortable but endangered when being forced to use a bathroom that does not mesh with their identity. In a 2013 paper, Jody Herman, a scholar at the UCLA law school’s Williams Institute, discussed a survey finding that 70% of transgender people “reported being denied access, verbally harassed, or physically assaulted in public restrooms”.’ (More from CNN.)
  • Is there anything to actually worry about? The article continues: “No similar research bears out the theory that opening bathrooms to transgender people spurs sexual predators to put on lipstick and a dress to target women and young girls in public facilities. Last year, a coalition of organisations dedicated to preventing the abuse of women issued a letter addressing Mr Patrick’s worry. “As rape crisis centers, shelters, and other service providers who work each and every day to meet the needs of all survivors and reduce sexual assault and domestic violence throughout society”, they wrote, “we speak from experience and expertise when we state that these claims are false”. Texas Republicans say that strict gender segregation in public bathrooms is “common sense”, but their appeal to conventional wisdom is not borne out by the evidence. A police department official in Des Moines, Iowa, said he doubts that bathroom tolerance for trans people would “encourage” illicit behaviour. Sex offenders, he said, will find victims “no matter what the laws are”.”
  • Meanwhile, bathroom bill thinking shows a misunderstanding of the realities of sexual assault: ‘[Laura Palumbo, communications director at the National Sexual Violence Resource Center] said she believes people “must understand the facts about sexual assault,” adding that in 8 out of 10 cases the victim already knows the person who sexually assaulted them, citing Justice Department statistics. However, 64 percent of transgender people will experience sexual assault in their lifetime, she said, citing a study by the National Gay and Lesbian Task Force and National Center for Transgender Equality.’
  • All of this said, other than “there is no evidence,” it’s surprisingly hard to find any numbers and reports on the topic of “is this actually a problem,” based on past crime and incidents. This is true for both sides of the issues!
  • That said, the conclusion would, thus, be that there’s no evidence based on historics that there’s anything close to a material, actual problem (sexual assault) going on here. This is not only intellectually (and socially) frustrating, but it also means that all the effort spent on bathroom bills is wasted and should have been spent on fixing real problems that could prevent actual sexual assault.

Canonical refocusing on IPO’ing, momentum in cloud-native – Highlights

Canonical Party

There’s a few stories out about Canonical, likely centered around some PR campaign that they’re seeking to IPO at some time, shifting the company around appropriately. Here’s some highlights from the recent spate of news around Canonical.

Testing the Red Hat Theory, competing for the cloud-native stack

Why care? Aside from Canonical just being interesting – they’ve been first and/or early to many cloud technologies and containers – there’d finally be another Red Hat if they were public.

Most of the open source thought-lords agree that “there can never be another Red Hat,” so, we’ll see if the Ubuntu folks can pull it off. Or, at the very least, how an pure open source company wangles it out otherwise.

That said, SUSE (part of HPE/Micro Focus) has built an interesting business around Linux, OpenStack, and related stuff. Ever since disentangling from Novell, SUSE has had impressive growth (usually something around 20 and 25% a year in revenue). All is which to, the Red Hat model actually is being used successfully by SUSE, which, arguably, just suffered from negative synergies (or, for those who don’t like big words, “shit the bed”) when it was owned by Novell.

As I’m perhaps too fond of contextualizing, it’s also good to remember that Red Hat is still “just” a $2.5bn company, by revenue. Revenue was $1.5bn in 2014, so, still, very impressive growth; but, that’s been a long, 24 year journey.

All these “Linux vendors,”like pretty much everyone else in the infrastructure software market, are battling for control over the new platform, that stack of cloud-y software that is defining “cloud-native,” using containers, and trying to enable the process/mindset/culture of DevOps. This is all in response to responding to enterprises’ growing desire to be more strategic with IT.

Canonical momentum

From Steven J. Vaughan-Nichols:

Shuttleworth said “in the last year, Ubuntu cloud growth had been 70 percent on the private cloud and 90 percent on the public cloud.” In particular, “Ubuntu has been gaining more customers on the big five public clouds.”

And:

Its OpenStack cloud division has been profitable, said Shuttleworth, since 2015

Al Sadowski has an extensive report on Canonical, mentioning:

[Canonical] now has more than 700 paying customers and sees a $1bn business for its OS, applications and IT operations software. Time will tell if this goal is realized.

And:

Canonical claims some 700 customers paying for its support services on top of Ubuntu and other offerings (double the 350 it had three years ago), and to have achieved more than $100m in bookings in its last financial year…. [Overall, it’s] not yet a profitable business (although its Ubuntu unit is). We estimate GAAP revenue of about $95m.

Strategy

On focusing the portfolio, shoring it up for better finances for an IPO:

we had to cut out those parts that couldn’t meet an investors’ needs. The immediate work is get all parts of the company profitable.

To that end, as Alexander J. Martin reports:

More than 80 workers at Ubuntu-maker Canonical are facing the chop as founder Mark Shuttleworth takes back the role of chief executive officer…. 31 or more staffers have already left the Linux distro biz ahead of Shuttleworth’s rise, with at least 26 others now on formal notice and uncertainty surrounding the remainder

Back to Al on the Job to Be done, building and supporting those new cloud-native platforms:

Rather than offering ways to support legacy applications, the company has placed bets on its Ubuntu operating system for cloud-native applications, OpenStack IaaS for infrastructure management, and Docker and Kubernetes container software.

And, it seems to be working:

Supporting public cloud providers has been a success story for Canonical – year-over-year revenue grew 91% in this area…. Per Canonical, 70% of the guest OS images on AWS and 80% of the Linux images on Microsoft Azure are Ubuntu. Its bare-metal offering, MaaS (Metal as a Service), is now used on 80,000 physical servers.

On OpenStack in particular:

Canonical claims to be building 4,000 OpenStack deployments a month at some 180 vendors…. It claims multiple seven-figure deals (through partners) for its BootStrap managed OpenStack-as-a-service offering, and that the average deal size for OpenStack is trending upward.

On IPO’ing

The Vaughan-Nichols piece outlines Shuttleworth’s IPO plans:

Still, there is “no timeline for the IPO.” First, Shuttleworth wants all parts of the slimmed down Canonical to be profitable. Then “we will take a round of investment.” After that, Canonical will go public.

However, Al’s report says:

It is not seeking additional funding at this time.

Probably both are true, and the answer as Shuttleworth says is “well, in a few years once we get the company to be profitable.

More

Banks are handling disruption well – Highlights

Thus far, it seems like the large banks are fending off digital disruption, perhaps embracing some of it on their own. The Economist takes a look:

  • “Peer-to-peer lending, for instance, has grown rapidly, but still amounted to just $19bn on America’s biggest platforms and £3.8bn in Britain last year”
  • “last year JPMorgan Chase spent over $9.5bn on technology, including $3bn on new initiatives”
  • From a similar piece in the NY Times: “The consulting firm McKinsey estimated in a report last month that digital disruption could put $90 billion, or 25 percent of bank profits, at risk over the next three years as services become more automated and more tellers are replaced by chatbots.”
  • But: “Much of this change, however, is now expected to come from the banks themselves as they absorb new ideas from the technology world and shrink their own operations, without necessarily losing significant numbers of customers to start-ups.”
  • Back to The Economist piece: “As well as economies of scale, they enjoy the advantage of incumbency in a heavily regulated industry. Entrants have to apply for banking licences, hire compliance staff and so forth, the costs of which weigh more heavily on smaller firms.”
  • Regulations and customer loyalty are less in China, resulting in more investment in new financial tech in Asia: 
  • As another article puts it: “China has four of the five most valuable financial technology start-ups in the world, according to CB Insights, with Ant Financial leading the way at $60 billion. And investments in financial technology rose 64 percent in China last year, while they were falling 29 percent in the United States, according to CB Insights.”
  • Why? “The obvious reason that financial start-ups have not achieved the same level of growth in the United States is that most Americans already have access to a relatively functional set of financial products, unlike in Africa and China.”
  • There’s some commentary on the speed of sharing blockchain updates can reduce multi-day bank transfers (and payments) to, I assume, minutes. Thus: ‘“Blockchain reduces the cost of trust,” says Mr Lubin of ConsenSys.’

Fixing legacy problems with new platforms, not easy

  • The idea of building banking platforms to clean up the decades of legacy integration problems.
  • Mainframes are a problem, as a Gartner report from last year puts it: “The challenge for many of today’s modernization projects is not simply a change in technology, but often a fundamental restructuring of application architectures and deployment models. Mainframe hardware and software architectures have defined the structure of applications built on this platform for the last 50 years. Tending toward large-scale, monolithic systems that are predominantly customized, they represent the ultimate in size, complexity, reliability and availability.”
  • But, unless/until there’s a crisis, changes won’t be funded: “Banks need to be able to justify the cost and risk of any modernization project. This can be difficult in the face of a well-proven, time-tested portfolio that has represented the needs of the banking system for decades.”
  • Sort of in the “but wasn’t that always the goal, but from that same article, Gartner suggests the vision for new fintech: ‘Gartner, Hype Cycle for Digital Banking Transformation, 2015, says, “To be truly digital, banks must pair an emphasis on customer-facing capabilities with investment in the technical, architectural, analytic and organizational foundations that enable participation in the financial services ecosystem.”’
  • BCG has a prescriptive piece for setting the strategy for all this, from Nov. 2015.

Case studies

  • A bit correlation-y, but still useful, from that BCG piece: “While past performance is no guarantee of future results, and even though all the company’s results cannot be entirely attributed to BBVA’s digital transformation plan, so far many signs are encouraging. The number of BBVA’s digital customers increased by 68% from 2011 to 2014, reaching 8.4 million in mid-2014, of which 3.6 million were active mobile users. Because of the increasing use of digital channels and efforts to reconfigure the bank’s branch network—creating smaller branches that emphasize customer self-service and larger branches that provide higher levels of personalized advice through a remote cross-selling support system—BBVA achieved a reduction in costs of 8% in 2014, or €340 million, in the core business in Spain. Meanwhile, the bank’s net profits increased by 26% in 2014, reaching €2.6 billion.”
  • And a more recent write-up of JPMC’s cloud-native programs, e.g.: ‘“We aren’t looking to decrease the amount of money the firm is spending on technology. We’re looking to change the mix between run-the-bank costs versus innovation investment,” he said. “We’ve got to continue to be really aggressive in reducing the run-the bank costs and do it in a very thoughtful way to maintain the existing technology base in the most efficient way possible.” …Dollars saved by using lower-cost cloud infrastructure and platforms will be reinvested in technology, he said.’ JPMC, of course, is a member of the Cloud Foundry Foundation which means, you know, they’re into that kind of thing.

Docker’s new CEO, Steve Singh – Highlights

In a mildly surprising announcement (see below), Docker announced a new CEO, Steve Singh, formerly of Concur-cum-SAP. The consensus is that this is the typical startup move to get a “more enteprise-y” leader in place, e.g., this happened at Puppet, Chef, and probably MuleSoft and Cloudera [I don’t know those last two well enough, but ¯_(ツ)_/¯.

As most all non-Docker (myself included and us over on the podcast) are always saying, Docker, Inc. needs to figure out a business model. So huzzah on that!

The PR folks at Docker were nice enough to line up a bunch of interviews. Below are some highlights from them and other places, As always, my comments are in square brackets unless it’s obvious otherwise.

Docker itself

Docker Customers Screenshot 2017-05-03 09.28.20

From outgoing CEO Ben Golub’s blog post announcing this:

  • Customers, in addition to the above: “Docker has rapidly scaled revenues, building a sustainable and exciting subscription business in conjunction with tens of thousands of small and mid sized businesses and over 400 G2000 customers like ADP, the Department of Defense, GE, Goldman Sachs,  Merck,  MetLife, and Visa.”
  • Partners: “we’ve created enduring partnerships with the likes of Accenture, Alibaba, Avanade, AWS, Booz Allen, Cisco, Google, HPE, IBM, Microsoft, Oracle, and more.”

Singh Interview with Todd Bishop & Tom Krazit

  • Over at Geekwire.
  • “Today we have about 400 enterprise customers, and that’s really been over the course of the last year or so that those enterprise customers have adopted Docker, so the rate of growth is phenomenal. I think our capacity to add value to those enterprise customers is huge. They’re running legacy applications. They’re building new applications on top of the Docker platform, and that’s driving massive economic savings for them. They’re able to see 75-500 percent reduction in the application infrastructure.”
  • It’s rare to see cost reduction used as an argument by cloud-native vendors; usually it’s a value-based sales: “compared to all the growth-money your company will make with this (and, sure, productivity gains), the cost will be nothing.” This might be an early sign of Docker’s enterprise value-prop: it costs less. One part to ponder: how cheaply can they do this w/r/t to sales and marketing? They have some good marketing costs from brand/community – i.e., everyone knows Docker. They need an enterprise salesforce and sales engineers to help buyers evaluate and then procure stacks; that is, unless they go (mostly?) pure inside sales a la Solarwinds. There’s some interesting comparisons here: Red Hat with the pure open source play, traditional middleware & infrastructure vendors with the open-core model, and then Solarwinds and New Relic for more inside, service-driven sales.
  • “My last day at SAP was April 30.” [So two reasons to wait until now (vs. at DockerCon): (1.) it’s traditional to let a standing exec have “one last conference,” and, (2.) Singh still had to officially be out at SAP.]
  • Some product-think, CaaS and building a platform with container parts: “We’re in the fortunate position that we are the leading platform company in this broader container-as-a-service space, number one. Number two, if you think about orchestration — things like Swarm or things like Kubernetes — our view is that what our customers are looking for is a platform to run their applications, manage them and deliver them. We want to take an open platform approach that allows the customers the choice to pick whatever components that they want from Docker and whatever components they want from anyone else, and run them in a model that makes sense for them. We have a number of customers that use the Docker platform as well as components from either the open source community or partners. That’s fantastic. When customers have choice, that’s a great thing.”
  • He skirts naming any competitors, which is standard, but, you know, eye-rolly.

Interview with Ari Levy

  • Over at CNBC.
  • “The software start-up was generating less than $5 million in revenue [in 2015].”
  • “Singh inherits a business that’s growing, with annual revenue in tens of million of dollars, according to sources with knowledge of the company but who asked not to be named because the financials are private. He’s still got money in the bank from the $95 million round that Goldman Sachs led two years ago.”
  • I’d read “tens of millions” as $20 to $30m. If it was $50m, they’d probably say so; if it was $40m, they’d say “nearing $50m”; and if it was $10m, it wouldn’t plural. Also, it doesn’t specify if this is TCV (paid out over 2-3 year contract terms) or ACV (total size of the deal, over all years of the deal’s life-span), but, hey, that’s how all private companies speak of revenue now-a-days. As a point of reference, the product my company, Pivotal, sells in this space: “booked revenue grew 130% (in 2016) to $270 million from $117.4 million for 2015.”
  • “The company started selling its enterprise product early last year and has about 400 customers, Singh said.”
  • “I’m more focused on the road ahead as opposed to things that have happened in the past,” Singh said. “We want to collaborate and make sure customers have choice.”

More

IT’s usefulness is improving, but there’s plenty of room to fix the meatware, Surveys – Highlights

It’s another survey about business/IT alignment. Who knows how accurate these leadgen PDFs are, but why not? This one is of “646 CIOs and other IT leaders and 200 line of business leaders.” Some summaries from Minda Zetlin:

When LOB leaders were asked about the role their companies’ CIOs play, 41 percent said the CIO is a strategic advisor who identifies business needs and opportunities and proposes technology to address them. Another 22 percent said the CIO is a consultant who provides advice about technology and service providers when asked.

But 10 percent said their CIO was a “roadblock” who raises so many obstacles and objections to new technology that projects are difficult to complete. And another 9 percent said the CIO was a “rogue player,” with IT making technology decisions on its own, and creating visibility and transparency challenges.

Meanwhile, 36 percent of LOB leaders and 31 percent of IT leaders believe other departments “see IT as an obstacle.” And 58 percent of IT leaders but only 13 percent of LOB leaders agreed with the statement, “IT gets scapegoated by other departments when they miss their own goals.”

This seems better than the usual (kind of out of date) scare chart I used use, from a multi-year Cutter survey:

There’s still, as ever, plenty of room to improve business/IT alignment.

Speaking of that, also in that IDG/CIO Magazine survey, there’s a weird mismatch between the perception of The Business and IT about what IT does:

What does The Business want anyway?

Meanwhile, Vinnie quotes a Gartner survey of 388 CEOs:

  • Almost twice as many CEOs are intent on building up in-house technology and digital capabilities as those plan on outsourcing it (57 percent and 29 percent, respectively).
  • Forty-seven percent of CEOs are directed by their board of directors to make rapid progress in digital business transformation, and 56 percent said that their digital improvements have already delivered profits.
  • 33 percent of CEOs measure digital revenue.

Point being: The Business wants IT to matter and be core to how their organizations evolve. They want programmable businesses. Here’s some examples from another summary of that Gartner survey:

Although a significant number of CEOs still mention eCommerce, more of them align new IT infrastructure investments to advanced commercial activities – such as digital product and service innovation, exploring the Internet of Things (IoT), or adopting digital platforms and associated supplier ecosystems.

According to the Gartner assessment, some CEOs have already advanced their digital business agenda – 20 percent of CEOs are now taking a digital-first approach to business development. “This might mean, for example, creating the first version of a new business process or in the form of a mobile app,” said Mr. Raskino.

Furthermore, 22 percent are applying digital business technologies to their traditional processes. That’s where the product, service and business models are being changed, and the new digital capabilities that support those are becoming core competencies.

There’s demand there, the final result of “the consumerization of enterprise IT,” as we used to crow about. IT needs to catch-up on its abilities to do more than “just keep the lights” on or there’ll be a donkey apocalypse out there.

You seem people like Comcast doing this catching-up, very rapidly. The good news is that the software and hardware is easy. It’s the meatware that’s the problem.

Link

Containers in production survey, RedMonk/Anchore – Highlights

Some highlights from a recent survey on container usage among 338 respondents to a Anchore/DevOps.com survey:

Containers in production:
anchore-cu
…approximately one third of the participants are running containers in production, with development coming in slightly higher.
OS used:
Looking at the top five host operating systems across user roles we see Ubuntu having a particular strong lead among developers and architects.
Mesos, architect-types like it:
Interestingly Mesos still features strongly with architects. Among developer communities we very rarely hear Mesos mentioned anymore. On the other hand we frequently encounter architects have invested in Mesos from the perspective of their big data environments and are looking at a common approach for their container strategy. That said, this entire market is extremely fluid at the moment.
Jenkins leads CI:
…the combination of Jenkins and CloudBees (commercial Jenkins) approaching 50%.
Security worries:
Bluntly put [security] presents a barrier to adoption, and an opportunity for conservative organisations to hold off on adopting new technologies.
Demographics:
Our population breaks out with over 60% working in companies of greater than 100 people [and ~30% working in companies of greater than 5,000 people]…. With any data set of this nature, it is important to state that survey results strictly reflect the members of the DevOps.com community.
More context:
  • As you’ll recall, 451 estimates that the container market will be $2.7bn in 2020.
  • A 451 Research 1Q16 survey puts production use of containers at ~14%. It’s likely risen sense then, of course: maybe to around 18 to 20%?
  • A 3Q2015 survey put “container orchestration” use at just ~9%. Presumably this is dev/test and production, all uses. And, again, you’d assume that it’s risen since then. The question would be: are people using containers in production without orchestration? That seems slightly crazy except for the simplest workloads, eh?

On-premise IT holding steady around 65% of enterprise workloads – Highlights

barfing cloud.png

One of the more common questions I’ve had over the years is: “but, surely, everyone is just in the public cloud, right?” I remember having a non-productive debate with a room full of Forrester analysts back in about 2012 where they were going on and on about on-premise IT being dead. There was much talk about electricity outlets. To be fair, the analysts were somewhat split, but the public cloud folks were adamant. You can see this same sentiment from analysts (including, before around 2011, myself!) in things like how long it’s taken to write about private PaaS, e.g., the PaaS magic quadrant has only covered public PaaS since inception).

Along these lines, the Uptime Institute has some survey numbers out. Here’s some highlights:

Some 65% of enterprise workloads reside in enterprise owned and operated data centers—a number that has remained stable since 2014, the report found. Meanwhile, 22% of such workloads are deployed in colocation or multi-tenant data center providers, and 13% are deployed in the cloud, the survey found….

On-prem solutions remain dominant in the enterprise due to massive growth in business critical applications and data for digital transformation, Uptime Institute said
Public cloud workload penetration:
Some 95% of IT professionals said they had migrated critical applications and IT infrastructure to the cloud over the past year, according to another recent survey from SolarWinds.
Budgets:

That survey also found that nearly half of enterprises were still dedicating at least 70% of their yearly budget to traditional, on-premise applications, potentially pointing to growing demand for a hybrid infrastructure….

Nearly 75% of companies’ data center budgets increased or stayed consistent in 2017, compared to 2016, the survey found.

Metrics, KPIs, and what organizations are focusing on (uptime):

More than 90% of data center and IT professionals surveyed said they believe their corporate management is more concerned about outages now than they were a year ago. And while 90% of organizations conduct root cause analysis of an IT outage, only 60% said that they measure the cost of downtime as a business metric, the report found.

Demographics: “responses from more than 1,000 data center and IT professionals worldwide.”

Pretty much all Pivotal Cloud Foundry customers run “private cloud.” Many of them want to move to public cloud in a “multi-cloud” (I can’t make myself say “hybrid cloud”) fashion or mostly public cloud over the next 5 to ten years. That’s why we support all the popular public clouds. Most of them are doing plenty of things in public cloud now – though, not anywhere near “a whole lotta” – and there are of course, outliers.

This does bring up a nuanced but important point: I didn’t check out the types of workloads in the survey. I’d suspect that much of the on-premises workloads are packaged software. There’s no doubt plenty of custom written application run on-premises – even the majority of them per my experience with the Pivotal customer base. However, I’d still suspect that more custom written applications were running in the public cloud than other workloads. Just think of all the mobile apps and marketing apps out there.

Also, see some qualitative statements from CIO types.

So, the idea that it’s all public cloud in enterprise IT, thus far, is sort of like, you know: ¯_(ツ)_/¯