InnoTech Oklahoma 2014 Cloud Facts

Jumbled business and technology glyphs over ominous sky pretty much says it all. No one really knows when the cloud started. Microsoft introduced Hotmail as the free web mail service in 1996. By 1999, Google dominated with search. Those few building blocks have propelled us to the cloud world we have today.

In the 2014 comedy Sex Tape, Jason Segel and Cameron Diaz inadvertently have their escapades shared to the world with the memorable line “Nobody understands the cloud!”. However, we all innately know that cloud computing just means that we are connecting to a server somewhere on the Internet.

Legacy cloud of the early and mid 2000s was all about the facilities. We experienced heat waves, power outages, tsunamis, floods, wildfires, tornados, hurricanes, ice storms, and blizzards. Relocating servers to a hosting or cloud provider began to make sense. Most organizations didn’t have hardened facilities, emergency generators, or redundant Internet connections. The rub though is that legacy hosting is simply added cost for the illusion of safety. Customers must still deal with planned obsolescence in servers and the challenges of the waterfall effect for replacement hardware and upgraded software. Plus, questions start to arise about the ruffians who may work for the host, data replication, and even the feasibility of getting to the host facility in the event of a disaster.

Today, hosting at local or regional providers has been displaced by cloud computing of three major players: Amazon, Microsoft, and Google. Amazon emerged as an early leader with a low cost strategy similar to Wal-Mart. Microsoft differentiates with security and productivity. While Google bills itself as a utility, leveraging the massive infrastructure required for search.

You might be thinking “What about Apple?”. Computer was dropped from the company name almost two decades ago and any cloud service will likely center around streaming music rather than business computing. The Mac has never had more than 6% market share versus PC. While dominant in the U.S., iPhone has only 14% of the worldwide market share. With recent security vulnerabilities in the consumer iCloud service and the raging battle with Android, Apple must decide if it wants to compete in cloud or continue with the existing consumer and music strategy.

In Cloud 2.0, there is a global perspective. For example, Microsoft Azure has 16 regions of geo-redundant datacenters around the world. Each region has enough capacity for more than 640,000 servers.

Modern data centers generally are not brick and mortar. They are placed in remote areas and not designed for public access. Modular design means preconfigured trailers of equipment are coupled together with power and network connections. This approach provides limited physical access with the ability to move or change the data center in large sections.

Despite the numerous acronyms for cloud computing, there are generally two categories: platform and productivity. You can have virtual servers at Amazon Web Services, Microsoft Azure, or Google Compute Engine. Microsoft Office 365 leads the productivity space followed by Google Apps. Microsoft also has expanded to device security with Windows Intune and customer relationship management with Dynamics CRM Online.

Security is what separates major players in cloud computing. That starts with Federal Information Security Management Act compliance and down. Regional and national hosts stop at HIPAA and PCI. Small cloud providers often cannot achieve compliance much above ISO 27001 or SAS 70.

To date, there have been no iconic security breaches for major business services like Google Apps or Office 365. Consumer cloud security breaches have been prevalent and highly publicized. Target and Home Depot failed to patch know vulnerabilities in Point-of-Sale software. Apple iCloud and Sony PlayStation Network had poor password security. JP Morgan Chase was the likely victim of a phishing scam or Linux vulnerability.

Linux is now the most vulnerable platform as shown by recent examples like Heartbleed, Shellshock, and iWorm. The most popular web servers are Apache and Nginx. Android dominates smartphones, followed by Apple iOS. All of these solutions are variants of Linux. It’s a myth to continue claiming Linux security by obscurity or limited usage. Further, consolidated and automated security updates with malware protection is urgently needed.

Encryption will be one of the main strategies for preventing security breaches. Google leads the industry by encouraging websites to encrypt all traffic by default. This practice not only protects web browsers, but ensures reputable sites with verifiable owners and locations to even be able to obtain a website SSL certificate. As for e-mail, Pretty Good Protection (PGP) and Transport Layer Security (TLS) are no longer enough. If you’re not logging into a secure portal for encrypted e-mail, you might as well assume your private messages are exposed to the world.

Two form authentication is the other way to greatly lessen security vulnerabilities. Most cloud services offer the capability to require a password and a pin number that is texted to your phone in order to logon. With a password you know and a phone you must have, hackers have a much more difficult time accessing your account.

So what happens if someone steals your phone? Well, you should always make sure you use a pin to access your phone, but that’s where products like Microsoft Intune come into play. Intune has the ability to lock, disable services, and wipe Android, iOS, and Windows devices. The ability to control devices connected Internet is becoming a standard requirement.

Modern networks have morphed from layers of hardware and software infrastructure protected at headquarters to distributed applications at multiple cloud providers. This strategy allows for high business continuity in disaster recovery and limited downtime for any one particular application. The game has changed to ensuring Internet availability and secure access anywhere, rather than cost failover sites with the liability of employees traveling to the facility during emergent situations.

We’ve moved from physical servers housed on premise to virtual servers running in the cloud. That makes computer time like money because we must pay for the run time per hour and storage.

Even so, cloud offerings like Office 365 are a 34% savings over 10 years versus on premise servers, software, and maintenance. Cash outlay is relatively flat and business disruption is much less by escaping planned obsolescence and challenging upgrade every 4 years.

For $240 per user per year, an organization can now provide complete productivity with access to communications, files, and applications on up to 5 devices per user. For another $72 per user per year, that same organization can control and protect 5 devices for that user. People can now use their own device while companies can control access to data.

Such flexibility comes with greater personal responsibility. If you wouldn’t say it in church or to your mother, then you should be just as respectful in e-mail, instant messaging, or social media posts. Just like there is no excuse for not knowing the rules of the road, you must take extra effort to learn and understand the technology you use. Being trustworthy and capable requires more discipline in the virtual world than the real one.

It’s likely the height of hypocrisy to rail about privacy, while we willingly share many aspects of our personal lives in social media. The truth is that every keystroke is recorded on your device for diagnostics and files are not truly deleted. Cameras, microphones, and wireless connections are everywhere. You need to assume that your actions are generally being recorded.

It’s not Skynet, but machine learning will soon change our world. We now have self-driving cars and software that automatically scales servers and provisions new processes based upon forecast usage. If you think you’ll just get off the grid, social media is already discovering your likely profile by family and friends that are on the service.

With over 90% of the world’s data generated in the last few years, successful people of the future will focus on making sense of the overload of information using dashboards. Power Business Intelligence is just one of the early tools to do things like converting a series of spreadsheets into key performance dashboards with no programming.

Similarly, if you’re going to compete and be found in a sea of data, you’re content and approach must be different. Use a TED format for presentations, so you have interesting visuals for a story or concept, rather than mind-numbing bullet points. Make sure your titles are unique in Google. Repurpose your presentations and link together for a blog post, podcast, or video.

Above all, push anything about you or your organization to the background and give answers or inspiration. Frank Sinatra begins to sing “My Way”, as we see a moving backdrop of New York City from Derek Jeter’s view inside the limo. You see the newspaper stand with the headline “Goodbye, Captain!” and Derek decides to get out and walk the rest of the way to the stadium. He talks to fans, wanders through a local pub, and signs lots of autographs. At the stadium he stops to reflect, gets dressed, and goes up the steps touching the sign reading “I want to thank God for making me a Yankee” one more time. Derek then turns back toward the camera and you see the Gatorade cooler stand. Then he’s up the stairs and on the field waving his hat to the fans as Sinatra ends the song.

Someday maybe we’ll all market as well as Gatorade. I hope that you picked up a few facts about cloud and maybe you’re inspired to get into Orbit and try the cloud now.

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iPhone Not Recommended

A board member recently asked me “Do I recommend what type of smartphone for people to buy?” The answer was a low, but elongated No. The reason is that I might as well be trying to change people’s religious and political beliefs. Also, I make no revenue on the advertising or sales of any manufacturer’s smartphone.

iPhone Not RecommendedUnless you’ve been living in a cave the last few months, you know that September 10, 2013 is when Apple will unveil the next iPhone. As with each of the last 6 years, Apple is releasing the enhanced 5S model before a new iPhone 6 is released next year. One unusual wrinkle is that a low-cost 5C model will also be released, in which you can choose from a variety of colors for your iPhone.

Generally, if your mother or grandmother just needs a simple phone, then get them an iPhone. If you have a pre-teen who lives in the bubble-gum consumer world of music and needs to text you from school or call when they are home, maybe the iPhone 5C model fits the need. However, to say the cool factor has worn off and the iPhone is not relevant is an understatement, for something that is basically just a larger iPod from 10 years ago.

Out of the gate last September, Apple got a huge push in sales for the holiday season. However, after the holidays, iPhone 5 sales slowed down drastically and missed all sales projections. With consumer complaints increasing and Apple stock sinking, the impending iPhone 5 flop signals a turning point for Apple. When you Google “don’t buy an iPhone”, there’s currently something like 2.6 billion results. To be fair, a significant amount are the annual “hold off a few months because the new model is coming out soon”, as well as the plain anti-Apple rants.

Regardless, the real reason iPhone is not recommended is because Apple is a closed system that doesn’t play well with others and has no offerings for the bulk of consumer and business needs. Except for iTunes and music, everything else you connect to or use with iPhone is generally dominated by Microsoft or Google – from e-mail and productivity apps to search and video and gaming. That’s why Android leads the market and Windows Phone is making a come back.

Ok Apple fan boys and girls, take a breath. I appreciate iCloud, but it’s nothing compared to Office 365 or Google Apps. Sure, there are 50 billion iPhone apps, except the vast majority of iPhone apps are dead or the most popular are already built-in for Windows Phone or Droid. The one thing that would really help iPhone is either licensing ActiveSync from Microsoft or re-writing their custom code from 2007, so iPhone can reliably synchronize e-mail, calendar, and contacts.

That’s my main beef with iPhone and I worry about the current Apple general business model. Let’s take a wildly popular and profitable device like iPhone, then release minor improvements more slowly and with fewer features than the competition. When the value starts to erode in the minds of customers, slash prices and sell a once exclusive device in Wal-Mart and any other willing discount retail environment.

The next shoe has already dropped, as fanatically loyal Apple customers see the Macbook Pro discontinued in Europe, but rumored demise eventually everywhere as it is not an iOS device. You see many more Macbooks as props on TV than in the real world. Supposedly, that is because of the iPad that hasn’t really changed since 2010 and is currently getting humiliated in Surface versus iPad commercials for lacking basic features like no multi-tasking or missing thumb-drive support.

Hopefully, Tim Cook can adjust Apple’s strategy. Failed mapping has shown that Apple must be willing to endure years of flogging while building their own offerings, or focus on successful niche areas. Adding high-priced watches and TVs to the Apple stores, with comparably fewer features than established competitors, seems like a tactic out of the defunct Sharper Image playbook. In this age of social media, how out of touch is Apple that after all this time there is still no Apple corporate blog of any kind?

Personal Use Office 365

Office 365 LogoI often hear the same complaints:

  • My ISP e-mail sucks.
  • Maybe I should do that Carbonite thing to backup my files.
  • A new copy of Microsoft Office costs how much?

So let me give you an idea. Use Office 365 for your personal account. How many of you want to write a book or have a hobby or simply want a personalized e-mail address? Maybe you’ve already registered that domain name. If so, for $20 per month you can have:

  1. Enterprise grade e-mail with 25GB of storage and unlimited archive storage.
  2. 10GB of document storage AND disaster recovery that you can access from anywhere.
  3. An always current copy of Office Professional that can be installed on up to 5 devices.

Basically for less than the cost of HBO that you rarely watch, you can have better technology and peace of mind. Try Office 365 free for 30 days.

2012 In Review

2012 In has begun providing annual reports and I wanted to share the most popular posts of 2012:

  1. iPhone 5 Flop – Apple sold millions of the new device, but failed to meet sales expectations. Maps was a huge debacle, battery life is still bad, iTunes continues to wipe data, and e-mail ActiveSync problems remain.  Apple stock is down more than $20 Billion and the hip and young crowd no longer think Apple is cool.
  2. 10 Tips for LinkedIn Ranking – Many of the ranking tips still apply, but LinkedIn has eliminated applications in favor of directly linking media and documents so look for an update to this post in 2013.
  3. SEO Sabotage – For the effort involved, you could definitely work on improving your own content and value to customers. Hopefully, tools like the Google Disavow will eliminate this pending cottage industry.
  4. Windows 8 Review – To the amazement of the lame-stream media whose mindset seems to be stuck at the turn of the century, Windows 8 is on pace to outsell Windows 7.
  5. Google Authorship – Author rank will be one of the most important aspects of content marketing in 2013. I recently changed my blog theme and have updated information for this post.

THANK YOU for following this blog and I look forward to providing more expert business and technology insight for 2013.

IT Firms Make Less on Cloud

Reality ImageMany of my peers often ask if they should get into cloud computing. I generally tell them a flat “no” with an explanation that they’ll make less money, a totally different sales/marketing approach is required, and technical competencies change drastically. The next question is usually something like, “OK, Kevin, then how are you so successful at it?”.

This is the fourth year in a row Matrixforce has achieved the elite Microsoft Cloud Accelerate Partner accreditation, with over 50 new customers and 2,000 users annually. We started three years beforehand when most people thought of cloud computing as something about the weather.  Today, we offer deployment and support services for Office 365 and Google Apps, Windows Intune, CRM Online, and Quickbooks Online – not to mention current training on Azure and competing cloud platforms. The sales and marketing team provide thousands of social media updates, hundreds of web pages and blog posts, and dozens of videos and podcasts. The technical folks are now all about productivity and usage of services and only a tiny bit of specialized old-school technology infrastructure. It’s been a long-term approach to grow a practice to compliment our other services that our firm took nearly 7 years ago. For certain, providers must have at least 5,000 to 10,000 individual subscribers, before the recurring revenue is enough to be significant and still can’t stand alone as a separate business. Most providers don’t survive longer than 5-7 years, much less have the resources and bussiness savvy to make the investment to try to get to those numbers of subscribers in that period of time.

Many prospects and customers have gotten the message loud and clear from the competition, that they need to stay on-premise with their technology infrastructure. “Why cloud computing is not reliable or secure.” Or you get the picture. Then the pitch is “You should just move all those servers into our data center. It’s not any cheaper, but we take care of all the hassle for you”. Hosting or rack space is definitely not cloud computing and brings forth questions of significant risk with the facility and provider’s long-term viability. Cloud computing uses knowledgeable experts backed by multi-billion dollar facilities provided by major manufacturers like Microsoft and Google. Further, the whole value proposition is reduced cost for significant improvements in productivity, reliability, and security.

I can’t blame the competition as the motivation is self-preservation, because switching to cloud computing eliminates 70% of product revenues and 30% of maintenance services. In hard dollars, that $50,000 annually in revenue for a few servers with associated software GONE – $250,000 loss in 5 years per customer. To add insult to injury, that $20,000 annual project and $10,000 in maintenance and support evaporates too, for another $150,000 loss over 5 years. So, the traditional legacy provider takes s $400,000 hit over 5 years in a moderate customer environment of 6-10 servers. Less product revenue equates to smaller discounts with distributors, coupled with more bench time for idle system engineers. Legacy providers face a grim business disruption problem of slowly dwindling cash and relevance.

Plus, the slick smile and dial, NASCAR like logos and product of the day – or selling a body for staffing or a project don’t really apply anymore. For sure, prospects and customers don’t like it. Today, customers want to find out who you are and expect tons of information to research and have informed opinions before they even talk to you.

A few competitors are trying to change, but face a huge uphill battle with existing staff and any cloud wins are tiny infusions of cash even less than shrinkage currently experienced on legacy on-premise infrastructure. Some competitors have doubled-down and gone the niche high-end hardware route. Many have got in the way-back machine for circa 1989 and are pitching hourly rates with no means to provide availability or quality service on a regular basis. Finally, the overwhelming majority are obfuscating reality and bilking the unsuspected into moving servers to a data center at little savings in cost and no escape from the product obsolescence hamster wheel.

Meanwhile, prospects and customers love our offerings. They appreciate straight technology advice not motivated by product or selling them a body. Already knowing quite a bit before we even speak, we prove our capabilities by telling about all the stuff they need to know that is not on the web. Having prospered over 35 years while surviving virtually every war or challenge for a technology firm, customers know we are stable and practice strong business and operational skill. When you are serious about the cloud and online services, give me a call (918) 622-1167  x25.

Disaster Drills

How often do you try out your disaster plan? If you’re a small or medium business, the default answer is “what plan?” or “we’ll find out when it happens”. The reason is cost, complexity, and apathy. CFO’s balk at the cost of most technology. Technology folks struggle with where to start and how to justify, as not all disasters are equal or require the same response. Finally, the norm for most management is that even when knowing the first 2 facts, they do business as usual because “it’s never happened before because we have smart people and redundancy” (or whatever helps them sleep at night).

Rather than bore you with steps to take to recover from a disaster, the following are some current and nominal cost approaches of how we run our business (and of course help clients do the same):

  1. Recently, a key employee’s spouse was badly injured in a car accident. We were able to advance some additional salary for a short period during the spouse’s recovery. Cash is king in business. You don’t want to have too much as it signals possible operations problems to potential buyers and excess dollars should go to shareholders, but you must have enough on-hand or readily available to cover such situations.
  2. After another summer storm, our main domain controller died. As best practice, this server shared no data or ran any key applications. The second domain controller took over ready and able to service the whole network, using DHCP failover strategy. While operations ran normally, our team was able to seize critical roles and manually remove the domain controller from Active Directory.
  3. Major storage for a client failed. Fortunately, our online backup had a full copy of the data, including databases and server system states. We managed to keep the storage running in a degraded state and minimized customer downtime, by moving data and virtual servers to other locations. Online backup continued to run regularly and after the hardware problem was resolved, the data moved back and synchronized with the off-site backup.
  4. A contractor blew the transformer for our building. Fortunately, we run our business using cloud computing with services like Office 365. Our personnel were able to easily and securely work from home for a day with no loss of operations for customers.

Now the scary part – all of these things happened in the same month. We survived because of business acumen with little additional cost. Our Virtual CIO services can help you identify how to run operations that are disaster ready. If you were the average business, would you still be in business without your key employee, main server, critical data, and a power outage?

Eliminate Bottlenecks

Is this year going to be better than last year? I can already say yes, but can you?

The reason is the elimination of several bottlenecks in our business. It took most of last year, but two major issues holding us back were eliminated by process change. We estimated the changes would save us approximately 500 hours this year and about 10K in capital investments. More importantly, the changes help us focus more on clients. Already, the board and myself are seeing improvements in staff motivation and better understanding and service.

Too many businesses fly into the new year with great hope, but no direction. Management is clobbered with year-ending and beginning tasks, so it’s business as usual. What are 1 – 3 things that if you “fixed”, would help management, staff, and customers? Think strategically and if it is just one thing that has a significant positive impact, that is still huge.

We moved our Customer Relationship Management application that runs both our sales and support operations to cloud computing. We exported the data, customized a few forms and reports, and in full operations in less than 30 days. A bottleneck was removed for staff as all functions could now be done in one place. Our management team had one less thing to worry about off of our business continuity list. Finally, customers reap the biggest reward by some new features and more focus.

One of the major reasons you use a Virtual CIO is to eliminate those bottlenecks which become a win/win/win for all involved. Here are a few examples we’ve done for other clients:

  • Increased inventory turn double per month by integrating data collection for a large distributor
  • Increased product shipments 6,000 tires per day for a major manufacturer
  • Saved energy conglomerate $24 million annually in freight processing
  • Reduced IT costs $86,000 annually for local law firm
  • Lowered communication costs $225,000 for a municipality

Unfortunately, identifying the bottleneck and how to remove them are two different skill sets. If you’re tired of the status quo, inquire about our Virtual CIO service (918) 622-1167 Option 3.