Swisscom Debuts Cloud Services: Computing, Storage and Email Archiving in the Cloud, Powered by Proofpoint, Verizon, Nirvanix

The corporate business division of Swisscom, the leading telecommunications provider in Switzerland, announced today that it has entered the cloud computing / Computing-as-a-Service market with a new family of on-demand IT offerings that include cloud-based computing, storage and email archiving features powered by leading SaaS vendors, including Proofpoint.

Swisscom's Cloud Services (see http://www.swisscom.com/cloud for more information) allow companies to build up their computing and storage capacity at any time, without having to make investments in IT infrastructure or specialized staff. The three main components of Cloud Services are:

• Computing-as-a-Service (CaaS), provided in collaboration with Verizon.
• Secure Storage, which offers on-demand storage powered by Nirvanix.
• Email Archiving, based on Proofpoint's SaaS email archiving solution, Proofpoint ARCHIVE.

Quoted in Proofpoint's press release about the new partnership, Roger Wüthrich-Hasenböhl, head of marketing and sales for Swisscom Corporate Business, said that they chose to partner with Proofpoint because of the security, performance and TCO benefits delivered by Proofpoint ARCHIVE.

“Today’s enterprises are looking to cut costs and improve efficiency without sacrificing quality or security and Swisscom’s customers expect the highest levels of service quality, availability and stability. As a high-security, high-performance, low total-cost-of-ownership solution, Proofpoint’s email archiving product was the perfect fit for our portfolio of cloud-based services,” he says.

In it's own announcement, Swisscom Corporate Business highlighted the litigation/regulatory audit readiness, and security benefits of Proofpoint's solution, noting that it offers, "unlimited scalability and mail data are stored such that they are unalterable and therefore audit-compliant."

Swisscom is the newest channel partner for the Proofpoint ARCHIVE solution, which is also sold through Microsoft Online Services and other Proofpoint channel partners. Proofpoint's CMO, Peter Galvin, noted that Proofpoint's SaaS email archiving, email security and data loss prevention solutions are, "an ideal value-added offering for service providers and ISPs looking to broaden their cloud-based service portfolios."

OEMs and resellers interested in including Proofpoint solutions as part of their own cloud-based initiatives should contact partners@proofpoint.com for more information.

To learn more about the cost and security benefits of moving email archiving to the cloud, download the Osterman Research whitepaper, Email Archiving: Realizing the Cost Savings and Other Benefits from Saas by visiting:

http://www.proofpoint.com/id/saas-email-archiving-costs-whitepaper/index.php

As NetSuite Goes IPO, What are the Channel Opportunities in a World of No Software?

Posted by Alan Armstrong, VP Business Development

Software is disappearing, or more accurately, becoming invisible, embedded, just part of the seamless fabric of everyday life.  Of course, even in a SaaS world, someone still has to conceive, design, develop, test, configure, deploy, and manage the shared environment, but as things continue to centralize, it’s conceivable that a handful of IT people will eventually be running all of the CRM systems in the world, for example.

Or so believe the watchers of NetSuite’s IPO yesterday, which was incidentally the day before Winter Solstice, a pagan holiday that celebrates the time of year when the number of daylight hours starts to increase in the Northern hemisphere, after a long descent into darkness. As I was writing this article yesterday, NetSuites performance on the day was not too dramatic, but by market close it had risen a total of 36.5%, and this after it opened at double the initial price range (Click here to see the opening day's price chart).

Channel partners seem to understand this trend. In an earlier entry , I talked about how SaaS threatens the existing model for a lot of large SIs and VARs, who make a lot of money handling the complex installation and configuration of enterprise software. A survey released this month by IDC  seems to back up my central thesis. The good news in that survey is that the large majority of Microsoft’s huge partner community already knows that SaaS will change their business model, and 70% of them see SaaS as an opportunity. I do not have the full report, but I’d like to drill down into more detail here; it’s one thing to say that you see something as an opportunity, but quite another thing to be successful as you try to exploit that opportunity. Sometimes a company’s DNA just prevents it from making the kinds of changes that may be necessary to exploit new opportunities. As the days get longer for SaaS, we shall see who profits.

The IDC results also appear to agree with my earlier comment that SIs and VARs will need to be much more savvy about the business itself, because the technology is becoming commoditized.

In recent weeks I have had a significant number of inquiries from companies who want to offer the Fortiva service to their own customers. To varying degrees, they have understood that SaaS can be good for them. Here are some anonymous examples:

• A litigation support company wants to help its clients reduce the cost of producing and processing email during a lawsuit. By putting email into an archive, the processing costs go way down, and in turn, the VAR also bills less to its customer. Why would a VAR want to bill less? Because if the VAR ignores this huge cost savings, the customer will look elsewhere. The smart guys are cannibalizing their own revenue streams because if they don’t, they won’t have a revenue stream. By extension, these VARs are finding ways to increase their business services, that is, actually ADD VALUE on top of what they RESELL. What a concept.
• A large implementation consulting company wants to add a SaaS offering as an option to on-premise software. Read that sentence again! Implementation consulting lives on the complexity of on-premise software. But with SaaS, they receive some pretty big benefits too, the most compelling of which is recurring revenue. When they sell the Fortiva service, they will get an annuity revenue stream that just keeps on paying, year after year. That gives them predictability and smoothes out the troughs and peaks that can kill any consulting firm. Moreover, they know that their customers will be demanding SaaS options, and if they can’t provide it, they will look more like product pushers than real business partners.
• An email hosting company is stumbling because of the immense cost and complexity of offering an on-premise archive as a service. They took an archiving product designed for single-tenancy and have tried to offer it as a utility for clients; a hosted model. As a result, they have to account for the actual costs of managing the in-house software, and are finding that they cannot sell it profitably; it’s just too expensive. Internal IT teams frequently underestimate the costs of management, but this hosting company can’t ignore it. They are looking to SaaS because with multi-tenancy, you get high utilization, which in turn gives you much lower costs.

So there certainly are opportunities for VARs and SIs in the world of no software. If SaaS at first looked like a deep, dark winter, in fact, there is more sunlight in their future.  But the VARs will have to get smart, and they’ll have to actually add value.

Happy Solstice everyone.

Systems Integrators: Danger Ahead

Posted by Alan Armstrong, VP Business Development

One of my first full-time job interviews after college was with Andersen Consulting. You know them now as Accenture (and in retrospect, it was just prescient to have rebranded Andersen Consulting before the … incidents).

In any case, my interviews were back in the early 1990’s, when Groupware was all the rage. I was not offered a job, and, again, in retrospect, I am so glad that my career took another path at such an early stage. Some of my friends at the time spent several years toiling away at Andersen. For the most part they became jockeys of Lotus Notes.  At the time Andersen Consulting had made a massive “Change Management” business that usually involved a Lotus Notes implementation. A more skeptical comment might be that the “Change Management” was simply a cover for a huge Notes implementation, but I am sure that some business value was also created in many cases. When it came to implementing Notes, however, so much of the cost of these changes involved install, configuration, and maintenance of Notes its associated infrastructure.

There are many other examples that could be named, where massive businesses have been built simply to customize and configure enterprise software for individual companies. SAP, PeopleSoft, Novell, Tivoli, and CA; each has spawned its own ecology of Systems Integrators. In all cases the SIs claimed, and still claim, to “add value” to their implementation.

SaaS has become a large potential threat to this breed of company. An example from my own market: Email Archiving. The first generation of archiving solutions brought a great opportunity for Systems Integrators to install, customize and configure policies for these in-house solutions. However, as time passed, it became increasingly clear that the ongoing management of an email archive is very difficult – much harder than is anticipated by most IT departments. 

Most IT departments think of archiving as storage, and storage is, in theory, cheap and getting cheaper. But there is a lot more to archiving than storage; archiving requires data to be collected, processed, indexed, searched, and disposed according to complex retention policies. This all gets even more difficult when certain subsets of information must be put on “legal  hold” so that it is retained beyond standard retention policies to be used as potential evidence in a legal proceeding.

To manage an archive, a system must perform all of these tasks and simultaneously manage the long-term integrity, disaster recovery, and high-availability of the data. Clearly there is a lot more here than just disks and tapes.

With all of this complexity, why would a company run their own email archive? The usual objection is that companies want control over their data, and companies are concerned about security. Large companies, it is argued, can achieve the economies of scale, so they can host an application just as efficiently as an outsourced provider.   By that same argument, SMBs, because they are small, cannot achieve the economies of scale, and so they far prefer to outsource, or consume applications on demand, like a utility. No one would dispute this. But I believe the enterprise too will turn to SaaS for many kinds of applications.

The critical issue is not customer size, though initially SaaS and other hosted applications have had issues with scaling to the enterprise. (On the other hand, does anyone question whether Google Apps could handle a company of 100,000 employees?) Over time, the critical issue will become whether the application itself is, as Geoffery Moore describes, Core or Context. In Moore’s terms, core activities are those that differentiate a company, the activities that create and sustain the company’s competitive advantages. Apple, for example, is differentiated by design.

Context activities are those activities that are necessary for the company to survive, but they do not create or sustain the company’s competitive advantage. We have a receptionist in the office, and while she does important work, she does not make our company what it is in the competitive market place. To use an example closer to home, your company uses email, but do you use it in such a unique way that it adds to your competitive advantage?

Moore says that the truly great companies will essentially outsource all context activities, and focus only on the core. Apple will not outsource design, but does it really need to host its own email system? Does your company need to host its own email system?

Which brings us back to SaaS. For too long the enterprise has spent precious up-front capital and person-energy deploying all sorts of context activities and IT projects. Some argue that large companies, because of their size, can achieve economies of scale in IT, and so it makes sense to host their own applications.

But Moore says that this is a distraction, and I agree. In 5-10 years, it will appear quaint to be hosting your own email / communications server, and many other applications. SaaS is not just a delivery model, and it’s not just a consumption model. It’s a model that allows companies to invest in their core differentiators, and leave the rest to specialists.

If this is true, what is the future of the Systems Integrator? Stay tuned for my views on this in a future post.