Welcome!

Java Authors: Carmen Gonzalez, Pat Romanski, Victoria Livschitz, Liz McMillan, Elizabeth White

Related Topics: Java, SOA & WOA, Linux, Virtualization, Cloud Expo

Java: Article

Riding the Cloud with Third Generation Outsourcing

Cloud Expo General Session Speaker Marty Gauvin believes that 3G-SaaS will drive the use of IT for a significant period of time

Virtual Ark General Session at Cloud Expo

Cloud Expo General SessionSpeaker Marty Gauvin believes that 3G-SaaS – the combined effect of Cloud Computing and outsourcing with application management – will drive the use of IT for a significant period of time. "The capacity for well-executed 3G-SaaS to revolutionize IT sourcing is profound," he writes. Here he sets out the Virtual Ark vision in detail.

Outsourcing is entering its third generation with the advent of the Cloud.

The first iteration of outsourcing was “your mess for less”, followed by second generation strategic or selective sourcing, which included hosting and early Software-as-a-Service (SaaS) offerings.

The adoption of these second generation SaaS services was constrained by their high fixed costs and rigid contract terms. So much of what customers and vendors take for granted in their sourcing frameworks has its roots in the assumption that infrastructure is expensive and fixed.

It is extraordinary how far and how fast things can change when these constraints are removed!

Due to the emergence of Cloud Computing, Third Generation Outsourcing stands to materially revolutionize and challenge traditional outsourcing models in a way that no previous models have.

Third Generation Software-as-a-Service (3G-SaaS) uses the on-demand flexibility of Cloud infrastructure services from companies such as Amazon, Rackspace and Microsoft to deliver existing enterprise applications more flexibly and more affordably than ever before. Widely used by smaller businesses, the 3G-SaaS model offers substantial competitive advantages to enterprises through a “pay-as-you-use” system that reduces fixed costs for IT and increases flexibility for rapidly responding to market demands.

To date, there has been a significant gap between the Cloud vendors such as Amazon, Rackspace or Microsoft and the customer, such as an enterprise prepared to SaaS-enable a core business application or an Independent Software Vendor (ISV) seeking to deploy its application in the Cloud.

This provides opportunity for value-added service providers as Cloud technology has reached a point of maturity where objections to its use by enterprise organizations are more perceptual than actual.

Virtual Ark is evidence of that fact.

Rather than being a “cloud vendor”, Virtual Ark is a Cloud and Application Management expert that already uses Cloud services on behalf of enterprise customers to deliver core business applications utilizing a 3G-SaaS model with consumption-based pricing similar to that delivered on Public Clouds.

Virtual Ark commenced operation in July 2009. The company is backed by private shareholding and the investment bank, Baron Partners. Its key shareholders and management team – which has worked together for a decade – sold their previous company to the Macquarie Communications Infrastructure Group for US$64m. Current Virtual Ark partners include Grid Dynamics, Ingres, TechnologyOne, Amazon Web Services, Microsoft Azure and Rackspace. As a result, customers can choose their preferred application as a 3G-SaaS solution. Because of our expertise and use of Public Cloud infrastructure services, Virtual Ark has virtually instant international reach, enabling customers to use their applications globally, quickly and easily.

The name Virtual Ark draws on the concept that the ‘ark’ is the place where a civilization secures its most precious resources. The ‘virtual ark’ is the ideal metaphor for how enterprises must view their information and its migration to this new generation of services. The Virtual Ark platform supports a range of existing enterprise applications including Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Financial, Web, Content Management Systems and line-of-business applications across a wide range of industries.

When I started putting Virtual Ark together with a team that had worked firstly in ‘conventional’ IT outsourcing and then in the selective sourcing world of the past 10 years, I recognized that the capacity for well-executed 3G-SaaS to revolutionize IT sourcing is profound.

The Public Cloud infrastructure that enables enterprises to benefit from the 3G-SaaS opportunity is already widely available in North America and Europe. Also, Amazon, Rackspace and Microsoft Azure all plan to build out their Asian Cloud presence during 2010.

While Virtual Ark’s initial focus is on North America and Europe, it is actively engaging with partners in other regions, including Asia. Some applications will perform acceptably in Asia today, so we are already working with ISVs in this region.

Because most Cloud vendors are focused on the small to medium enterprise market, this sector is hotly contested for commoditized SaaS and Cloud services.

By contrast, the top end of the enterprise market has been slow to adopt SaaS and Public Clouds. This is primarily because it is a much more complex market and thus more difficult to address. Likewise, Independent Software Vendors have been slow to bring SaaS versions of their products to this market because of the perceived cost and complexity of doing so. Virtual Ark works with ISV partners to SaaS-enable their applications. There is typically very little coding required by our ISV partners of their original applications and Virtual Ark does almost all of the work necessary to SaaS-enable these applications. Significantly for the enterprise, multi-tenancy is not a requirement in order for Virtual Ark to SaaS-enable core business applications.

The opportunity for Virtual Ark is to enable these large enterprise customers to continue using applications they are comfortable with while gaining the benefits of the Cloud. Virtual Ark removes almost all of the barriers I’ve outlined! As such, we expect to be at the forefront of 3G-SaaS and Cloud take-up by the top end of the enterprise market. Virtual Ark challenges traditional views of outsourcing, Cloud security, SaaS and the likely adoption of Public Cloud services by large enterprise customers globally.

Although major enterprises have been reluctant to run core business applications in the Cloud due to concerns about security, these questions are now answered by Virtual Ark. Of course, enterprises require a risk analysis process to systematically identify and assess the relevant aspects of their chosen computing model or service. This equips them to analyze risk by examining the technical and process dimensions of a specific implementation rather than trying to second-guess the security needs of a generic service identified as “Cloud Computing”.

Security in the Cloud isn’t bad, it’s just different. It is essential to take a measured, careful approach to security issues. This approach should apply whether you protect a person, a physical asset or your data. What changes are the risks and threats to which you respond.

In the case of Cloud-enabled applications, techniques such as encryption and overlay tools are available to achieve significant security accreditation when implemented correctly. Against that evaluated risk are the substantial competitive advantages offered by 3G-SaaS – managed application services in the Cloud – which include the significant reduction of fixed IT costs by enabling “pay-as-you-go” usage.

With no underlying fixed cost of infrastructure, Virtual Ark 3G-SaaS applications in the Cloud offer very flexible billing models. While billing may vary between applications, all are aligned as closely as possible to a sensible consumption-based pricing model. Some use “number of users per hour”; others use “by transaction”. This flexibility is in stark contrast to traditional 2G SaaS options, such as Salesforce.com, which are typically billed on a minimum number of user licenses over contract terms of two years or more.

By leveraging existing Cloud service providers, the pay-as-you-go model of 3G-SaaS enables ISVs to align licensing as closely as possible to how the customer consumes the application. This is the central tenet of Virtual Ark’s approach to delivering 3G-SaaS because it equips our ISV partners with a strategic advantage over their competitors.

Customers can choose to have no minimum contract term obligation. This could apply where a customer converts an existing on-premise solution to our 3G-SaaS model. Customers can license the Virtual Ark Platform in the Cloud and simply “take over the keys” to drive the application themselves without any migration. The flexibility of 3G-SaaS means customers are free to leave at any time. But they won’t!

If the application is new to the customer, implementation service costs will depend on their specific needs. However, implementation timetables are massively reduced by using Virtual Ark’s templated solutions and because our 3G-SaaS software can be deployed instantly. Accordingly, at Virtual Ark, we “eat our own dog food” by maintaining all our business systems in the Cloud. That gives us both the flexibility and the focus to meet our customers’ emerging needs for SaaS-enabled applications in the Cloud.

Another enterprise concern about utilizing the Cloud has arisen from the SME Cloud vendor emphasis on the primacy of multi-tenancy applications. That concern is no longer valid. In our view, the security, integration and performance requirements of large enterprise customers are ill-suited to multi-tenant solutions. This is a key reason why SaaS has not been taken up more strongly by this market segment and why many ISVs have not modified their applications to be multi-tenant.

Today, the Virtual Ark 3G-SaaS Application Management Platform can manage dedicated instances of the application for specific customer needs as if they were “one” application instance.

Virtual Ark sees this as an important differentiator in its value proposition. The powerful business driver for enterprise adoption of the Cloud for core business applications is the need to build flexibility into an organization, so it can rapidly respond to both opportunities and threats. The Global Financial Crisis has demonstrated to businesses globally that we face an unpredictable future with a greater rate of change. In that environment, winners will be those that can best adapt to new circumstances.

Virtual Ark believes that 3G-SaaS – the combined effect of Cloud Computing and outsourcing with application management – will drive the use of IT for a significant period of time. Enterprise customers will depend upon successfully leveraging this confluence of trends to secure their business operations, IP, data and future.

Cloud Expo, Cloud Expo East, Cloud Expo West, Cloud Expo Silicon Valley, Cloud Expo Europe, Cloud Expo Tokyo, Cloud Expo Prague, Cloud Expo Hong Kong, Cloud Expo Sao Paolo are trademarks and /or registered trademarks (USPTO serial number 85009040) of Cloud Expo, Inc.

More Stories By Marty Gauvin

Marty Gauvin is the Founder, President & CEO of Virtual Ark. He is also Founder and Chairman of Tier 5, a company that designs, builds and operates data center parks and a Director of Playford Capital. Prior to Virtual Ark, Gauvin founded and led the publicly listed company, Hostworks, as CEO for over 10 years to its successful sale in 2008 for $68.9M to the Macquarie Group. He is also a member of the Microsoft Service Provider Partner Advisory Council, the Dell Asia-Pacific Platinum Advisory Council, and various government innovation committees established to invest Government capital into selected venture capital funds.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@ThingsExpo Stories
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example t...
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happens, where data lives and where the interface lies. For instance, it's a mix of architectural styles ...
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and assessments, including a decade of leading incident response and digital forensics. He is co-author of t...
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrategies, will examine why IT must finally fulfill its role in support of its SBUs or face a new round of...
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, described an IoT-specific approach to user experience design that combines approaches from interaction design, industrial design and service design to create experiences that go beyond simple connected gadgets to create lasting, multi-device experiences grounded in people's real needs and desires.
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps, abiding by privacy concerns and making the concept a reality. These challenges can't be addressed w...
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. According to a recent IDG Research Services Survey this rate of traffic will only grow. What's driving t...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics is e...
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) i...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
Bit6 today issued a challenge to the technology community implementing Web Real Time Communication (WebRTC). To leap beyond WebRTC’s significant limitations and fully leverage its underlying value to accelerate innovation, application developers need to consider the entire communications ecosystem.
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from hardware to software, or as we like to say, it’s an Internet of many different things. The difference ...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.