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Yet Another (ex-)VC Blog

Cloud computing, startups, and venture capital

Cloud app store hype

with 7 comments


iPod 5th Generation white.
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With the rise of virtual appliances as a software delivery and deployment model, people are beginning to talk about the idea of cloud computing app stores (a la iTunes) where admins can find virtual appliances and then easily deploy them onto a cloud or a server in their data center.

Although this idea sounds cool (“Hey, I can search for apps like I’d search for songs on iTunes and then deploy them almost instantly!”), I’m not convinced it is something that is going to create a dramatic market shift within the enterprise.

Why not?

First let’s think about why customers would be inclined to use a virtual appliance or app store:

  • Easily demo software on their own environment or in the cloud:  The virtual appliance model is clearly a great way for an IT guy or developer to test new apps.  You can try before you buy, and you don’t need to requisition any hardware to test.
  • Pay-per-appliance instead of pay-per-physical server: A pay-per-appliance model makes more sense in the virtual world than does the old licensing model of per-CPU or per-server.
  • Choice: App stores are a place where the big vendors’ marketing muscle won’t matter as much.  Customers will be exposed to new vendors and solutions.

And some reasons why customers wouldn’t want to use virtual appliances or app stores:

  • Lack of Control: Larger companies will have strict standards on what kind of applications and OS’s go into their environment.  Typically, they are going to want control of the hardware, the application, and everything in between.  Using a virtual appliance means giving up much of the control enterprise IT is used to having on the entire stack.
  • Good config management and deployment tools beat virtual appliances any day of the week:  The virtual appliance value proposition is eliminated if you’ve got robust config and deployment systems (think Opsware, Puppet, etc) that let you deploy fully customized app stacks (w/custom OS) in minutes.  Why sacrifice the ability to customize when you don’t have to?

Why are the appliances and app stores good for vendors?

  • Lead gen: Download of virtual appliance = sales lead for appliance vendor
  • Makes software pre-sales process easier: Instead of putting a sales engineer onsite for a couple days to help setup a customer demo, give the customer a virtual appliance that they can get up and running in an hour or less.
  • Best practices:  The vendor can ensure the configuration of the appliance conforms with best practices.  This will prevent some folks from shooting themselves in the foot by not selecting manufacturer suggested default settings. (Although certainly the ‘suggested’ settings are a really bad idea for certain use cases – a longer story which I won’t dig into here)
  • Makes cloud more useful:  Helps cloud customers deploy apps faster.
  • Long tail:  Exposes lesser known or upcoming vendors to IT buyers.

Seems to me like virtual appliances are a great sales/marketing tool for vendors large and small, but not something that will fundamentally change how enterprise IT is delivered.  SMBs on the other hand…maybe there is a play there.

Thoughts?

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Written by John Gannon

May 21, 2009 at 11:08 am

7 Responses

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  1. Every cloud related app/tool we have used, HAS required non-trivial customization because everybody’s use case is slightly different. Unlike apps for iPhone which is standalone and does exactly one thing on a very stable platform, the cloud tools will be a part of the bigger puzzle that needs to be massaged enough to fit into the custom architecture.

    Further, opensource community generated tools embed best practices and features that individual companies will find hard to discover and emulate. IMHO the notion of app store for cloud will look/feel and be built differently compared to the existing app stores.

    Like

    Ganesha Bhaskara

    May 21, 2009 at 12:19 pm

    • Ganesha – thanks for reading. You make an interesting point. I’m interested in your thoughts on how will the cloud app stores be different from what we see today from Apple and Blackberry. Care to expand on that? Would love to hear your take.

      Like

      John Gannon

      May 21, 2009 at 12:33 pm

  2. Interesting post. I actually agree in some ways, I couldn’t see a large scale marketplace for applications for the enterprise. As we move away from an OS and into a hypervisor as the base OS, we may start seeing more applications that are bundled with a small OS and the app so that could be a compelling case for a VM marketplace for end users.

    Now, I could see the Oracles and the IBMs of the world having a private marketplace for their software, where you could download a trial or even a production ready app if desired. I think what is more value would be an updating system, like the iPhone. in your VM management console, an alert could be generated that your VM has a critical update, and then it would tie back directly to the vendor and update this – essentially some type of hypervisor update API that would notify you of an upgrade in you management tool vs today with having to get an email or logging into the OS to see updates.

    Like

    Michael Granit

    May 21, 2009 at 5:04 pm

  3. Why not an external cloud completely outsouced with customized solution oriented virtual appliances that meet the customers standards and business requirments. With cloud computing, virtual appliances, and outsourcing, I don’t see why you need IT within your organization anymore…

    So I think an app store is cool, but refined and taken to the next level it can be the future! If it saves money, simplifies IT, provides performance, reliability, scalability and availability, then it will be successful! My two cents…

    Like

    Jerry Lurye

    May 22, 2009 at 2:53 pm

  4. Actually, I think SMBs will rather like virtual appliances.

    Like

    Yi-Jian

    May 23, 2009 at 1:14 am

  5. It’s an intriguing idea… I’m not convinced one way of the other. On the one hand, I feel like Google already acts as a good enough iTunes for IT. But as more and more vendors offer free tools, it makes sense to me that there would be a destination site like Download.com but for B2B apps. In a way, isn’t AppExchange like this already?

    Like

    Sarah Tavel

    May 23, 2009 at 6:03 pm

  6. How long will it take for vendors to agree on best practices and standards so B2B app images can be developed, sourced and deployed regardless of the underlying tech stacks?
    Vendor neutral B2B app stores would be much more valuable to end users. What do you think?

    Like

    cprimault

    June 16, 2009 at 11:41 am


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