Even the White House wants a cloud

There's been a lot of action in the cloud market, including Google's acquisition of Motorola. Oh wait, that has nothing to do with the cloud. Never mind. But one house, which happens to be white, is actually making some cloud moves. Nick Mehta, CEO of LiveOffice, and a handful of others helped advise the U.S. government on how to use cloud technologies and helped plan a way for the White House to adopt a cloud. He spills on how it all went down in this week's episode of Cloud Cover TV.

We discuss:

  • Google's acquisition of Motorola (it has nothing to do with cloud computing)
  • Cloud-based identity and access management provider Okta brought in $16.5 million in venture capital
  • The University of Washington is offering a certificate in cloud computing
  • Nick Mehta, CEO of LiveOffice, discusses advising the government on how to use cloud technologies
  • How the selected cloud advisors planned a way for the White House to adopt the cloud
  • How the government will change when everything is moved to the cloud
  • What LiveOffice can provide for enterprise IT organizations looking to use email services in the cloud
  • The differences in using email services in the cloud
  • The pros and cons of Google and Microsoft
  • How to transition between Google and Microsoft

Read the full transcript from this video below:  

Even the White House wants a cloud

Jo Maitland: Hi. Welcome to Cloud Cover TV, our weekly show on all the juiciest news in the cloud computing market. I'm Jo Maitland here in San Francisco and joining me this week is Nick Mehta, CEO of LiveOffice, a cloud based email service provider. Now, there's a million of these companies out there, but Nick has one claim to fame the others don't. He was recently selected to be on the commission that's advising the government on how it should use cloud technologies. An enviable position. We'll ask him if he thinks it is and how that's all going next.

First, the news this week. Google's acquisition of Motorola is dominating the headlines, and one or two news outlets are actually calling it the biggest cloud computing acquisition yet. Nonsense. That's completely wrong. It's got nothing to do with cloud computing. Google is actually buying Motorola to defend its Android mobile operating system business. Motorola has tens of thousands of patents in the mobile space and owning this intellectual property will actually help Google defend its turf in this increasingly cut-throat market.

Now on to smaller companies genuinely in the cloud and making the headlines. Octer, a cloud-based identity and access management provider, just ranked in $16.5 million in venture capital. Not bad in a down economy. The company helps customers access web apps like Salesforce and cloud email like Gmail in a secure way, making it easier for companies to adopt these services. And finally, if you're wondering whether cloud computing is mainstream or not yet, how about this for a sign of the times, that it is? The University of Washington announced this week that it's offering a certificate program in cloud computing. Students will learn how to design scalable apps and become experts in cloud concepts to help businesses advise on creating cloud strategies. The course is offered online or in a classroom for $2,500 and it starts this October. Good luck if you apply.  And now what you've all been waiting for, here's Nick Mehta from LiveOffice.

Nick Mehta: Hey Jo. Good to see you.

Jo Maitland: So, LiveOffice sells all kinds of different email services in the cloud. I guess one of the biggest fears is from the enterprise end of things is, the email being lost. Have you guys lost anyone's email yet?

Nick Mehta: No. We've never lost email. And storing data and retaining data is obviously our core business model and value proposition. Anyone in this industry has to really think about what are all the steps involved in holding that data and searching it and making sure there's no part of the system where things could break.

Jo Maitland: And you were asked to be on the commission that's advising the government on how to use cloud services, different cloud technologies. How's that going so far? Why did they invite you? Tell us how that process is going?

Nick Mehta: Yeah. Just to back up. I think the White House, for a few years, noticed that there's a huge opportunity to drive innovation and save money by using the cloud. And, actually, the CIO of the White House, Vivek Kundra, who's the real innovator in trying to get the government to adopt the cloud. And so they created this commission of industry leaders, big companies, small companies - for example, the CEO of Salesforce.com, Marc Benioff, and a lot of start-up CEOs like myself - to come together and advise the government how they can make it easy for the government to adopt the cloud and how to make it easy for companies like LiveOffice and Salesforce and others to deliver cloud services.

Jo Maitland: So how far have they got? Where's that process now?

Nick Mehta: Actually, it was my first experience in Washington, and actually I was impressed. Several committee meetings got together and ended up producing a report, just pretty detailed with recommendations that were given to the White House and actually presented to Barack Obama and his staff about how to adopt cloud computing. So the work's done now. It's available on the Cloud Commission's website and there will be some follow-up coming out of it, but I think we made good progress.

Jo Maitland: Can you give us a taste of anything that was unusual for you that happened that day? Any interaction? What did you learn out of that experience that you didn't know?

Nick Mehta: Well, on a personal level, I've never been involved in government stuff before, so I went into a meeting in a hotel in Washington, DC, and there were about 150 people dressed in nice gray suits with ties. It definitely didn't feel like a Silicon Valley meeting. But I was surprised. People were very productive and very engaged. The government folks were very insightful. They were actually pretty up to speed on what's happening in the cloud. An example, one of the things we talked about a lot, was the issues around data being stored in different countries in the cloud and how do governments cooperate together. And the government folks were very progressive about thinking about how can the U.S. make it easier for people to store data here and, also, to move data around. I was impressed.

Jo Maitland: So, Vivek Kundra, you mentioned. He was in that CIO position within the government and has since resigned. Have they replaced that role yet?

Nick Mehta: Not to my knowledge. I don't think they've replaced it yet. The nomination process is probably pretty long. I don't think they've replaced it yet.

Jo Maitland: And what's your view, the people at the top are always very gun-ho and excited, "Yes. Yes. Rah! Rah! The cloud. We're going to save money." And then, as it filters down through the different agencies and there's the policymakers, the people get less and less and less excited by the idea and, in fact, someone said to me that Kundra's role was essentially a political appointee that doesn't hold much sway and much power, apart from he was in that specific budgetary office where he would have had some influence, but then all the other agencies hold their own budget and kind of do what they like. Is politics going to get in the way ultimately here with this move by the government? What's your view?

Nick Mehta: Yeah. First of all, I think Kundra would have probably told you the same thing about his job that you just said, which is his job is not to force everyone to go in one direction, but it's really to advise, come up with a strategy, and try to really sell that concept to the different agencies. The agencies do have autonomy. Obviously, they're governed by the budget that Congress gives them. So it's a big forcing function, I think, for a lot of this, is that people have to find ways to save money. Because of the economy in general and the deficit and things like that. So I think Kundra was saying how do we give them a road map to get there and work with them and don't force it on them, really work with them? And one of the things we all observed is this is a pretty big job change for people. It's a different ways to buy things, a different way to plan. It's different types of roles in these agencies that need to manage cloud services. So you have to acknowledge that versus just assuming that they're going to change overnight. And he was pretty progressive about that.

Jo Maitland: Is there still a role for, you know there's this entire industry of government contractors that are there in this advisory role. But cloud services are supposed to simpler, faster to adopt, easier to use, compared to traditional IT which was complex to manage and so many different choices, all doing different things. These contractors, are they scared? Are they going to go away when the government potentially moves toward the cloud? What's their role do you think?

Nick Mehta: So I think everyone in IT is going to through the same process of fear and uncertainty and doubt and everything else, and contractors are probably in that camp. But I think the more progressive ones realize there actually is a real role. If you think about enterprise IT or government, there's a role for the traditional IT if they evolve the way they operate. So you don't need to manage storage and set up servers and things like that, but you actually do need to integrate services. You need to define service level agreements. You need to manage the vendors. There's a lot more vendor management when you have a cloud, because the cloud is doing everything. You actually have to think about what your financial remedies are. You have to do budgeting. So it's a little bit more business oriented and more project management oriented, probably a little less sort of tech-ops oriented. That changes. But if you look at the work, I think the work is still pretty significant. It's just a different type of work.

Jo Maitland: And so for enterprise IT organizations looking to use email services in the cloud - you guys have a ton of customers now - what are some of the "gotchas"? What advice can you give IT organizations looking at cloud service providers for email? What are some of the business traps that people fall into, maybe a couple of technical traps to watch out for?

Nick Mehta: Sure. Yeah. Definitely. So our business is actually about letting people search through and retain and archive their data in the cloud. So we'll connect to their internal system, like an exchange server internally, or their cloud system, like Google Apps or Microsoft Office 365. Because of that, we've seen a lot of this transition for customers moving from on premise email to cloud email, and a couple of things have come up for us. Number 1, Moving the actual mailbox is a pretty big change for people. Moving from your Exchange and Outlook on premise up to Exchange and Outlook in the cloud or maybe Google. That's a big change, so you really have to plan that out pretty carefully.

Jo Maitland: Why? They're the same. They look the same.

Nick Mehta: It looks the same. There's a lot of technical differences. so, for example, if you move from Exchange to Exchange in the cloud, there's little differences, things like how many people can be on a recipient's email, how many people you can put on the two line because the service provider doesn't want you to be able to use this to spam people, as an example. Or having to have rules that are the same across all customers, versus being able to go to your IT department and say, "I want to change these policies just for my company." That's an example. Now, moving to Google is a dramatic change because you have a different user interface, different usability model. A lot of great things about it. Lots of changes. But regardless, whether you're moving to Google or moving to Exchange in the cloud, the change is significant. I think a lot of enterprises underestimated the change in the early days and they took a couple steps and some of them took a step back and, typical, going through that hype cycle. I think what people are realizing now is the benefit is huge, but you really have to plan it out. Some companies have chosen to start with other email services like archiving or security or data loss prevention, other related services first. And then you move your mailbox to cloud over time. That's what a lot of our customers have done to sort of put it into phases, as an example. Another thing I think is very timely on people's minds is whatever you move to a cloud, whether it's email or even another application, cloud providers are not invulnerable to issues. Your IT department internally will have issues. Cloud providers will have issues. Cloud providers invest a lot to prevent issues, but they will still be there. There's risk in no matter what you do and there's no way to have a back-up plan for everything that could go wrong. So, what is your back-up plan as an IT department if that cloud goes down? If you can't access your email, if you can't send and receive, or if it's another application like a CRM system or something? What do you do if that's not available? You really need to think about that.

Jo Maitland: But what's an option there? So you need a secondary provider or what?

Nick Mehta: Yeah. A couple different options. Obviously, some people don't move to the cloud because of fear of down time. I'd argue that you're going to have down time internally too. But some people choose to keep it internally. I think the people that are moving to the cloud are realizing they need to think about back-up the same way they do on premise. On premise, nobody would ever set up a system in 2011 on premise without a back-up plan, right? A back-up system, a way to restore data. What happens if it fails? Things like that. A lot of times, in the early days, people were moving to the cloud and assuming that it's all taken care of and, for the most part, it is. But you need to think about what if that provider fails. As an example, for email, how would I restore a message if my user deletes it and it's no longer available on the cloud provider? How would I get my data back if the cloud provider lost all my data? Or how do I send and receive emails when that cloud provider is temporarily unavailable? There are solutions out there. We offer something called continuity that lets the customer use our data center to send and receive and access data in the event the cloud provider is down, and lets the customer restore data from us, if that data's been lost from the cloud provider. Alternatively, a customer could actually back up data back on premise. We've seen people do that as well, where you're actually pulling the data down from the cloud back to on premise. A lot of good models for it, but I think the most important thing is don't put all your eggs in one basket.

Jo Maitland: So what are you seeing in terms of Google announces they've won some big state or city and then Microsoft announces they've won the one next door? Are these guys kind of level pegging here, or is one bigger in one area than another? What's your sense of why people are going for Google versus Microsoft or the other way around?

Nick Mehta: It's interesting. I think it's been an evolution the last few years. I think a couple years ago, Google had a lot of mindshare, which they still do, but they were really the early adopters and the early leaders in the cloud area over all of them and Amazon and a few others. But Microsoft has, I think, come to the game pretty significantly now, especially with Office 365, which is their new cloud based collaboration suite. So I think, in the early days, Google was getting a lot of momentum, particularly in state and local government and education, where I think there's a lot of price sensitivity and where people aren't necessarily already on a Microsoft environment. They might actually be on an open source environment or some other email server. In an enterprise, so many people are on the Microsoft environment today, with Office and Outlook and whatnot. I think it's been much harder to get large enterprises to move off of the Microsoft platform. So the way we're seeing it evolve is, in the enterprise, Microsoft seems to have the edge, as long as they can really execute. In state and local government, education, and emerging markets, Google's got a great value proposition.

Jo Maitland: And what if I want to switch between the two? How do I, as an IT organization, ensure that if I go with Provider A over here and then I decide, oh, the pricing is so much better over here, or whatever, services? What should I do, technically or business-wise to make sure that I can switch?

Nick Mehta: A couple things to think about, one of the most important things is the data itself. So when you move to the cloud, a really important thing to think about is how do you control your own data. Do you have a back-up copy of it? How will you be able to restore it? And how will you be able to keep it and move it easily? When you just have the data with that provider, you're a little bit beholden to them giving it back to you. These companies are all very professional so they will give it back to you, but you're beholden to their timelines and their pricing and other things. So I think a lot of companies are saying how do I have a second copy of that data somewhere. They could archive it with a company like LiveOffice. They can keep it on premise. That gives you a little more flexibility. That's one thing. Second thing is, contractually, really defining upfront what's involved in leaving. In the early days, those things weren't defined in the contract so then it would come to the end and, unfortunately, you had to part ways, and then it's a negotiation. Honestly, the provider has some leverage because they have your data, and it's a tough negotiation. Well, how do you define the exit cost upfront? What's the termination procedure? Smart clients are defining if SLAs are breached, I should be able to terminate early. There's a lot of negotiation. I think clients are getting a lot more savvy about the contracting process, especially for enterprises, versus just accepting what's there on paper from day one.

Jo Maitland: Nick, thank you very much for being on the show.

Nick Mehta: Great. Thank you, Jo. Appreciate it.

Jo Maitland: Cheers. Bye. This has been Cloud Cover TV. Thank you for watching and tune in next week for more insider news on the cloud computing market.

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