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Page 1: Cloud Cruiser’s smart meter for the cloud targets midmarket · Cloud Cruiser’s smart meter for the cloud targets midmarket WILLIAM FELLOWS ... Optus, Accenture and AXA. ... SWOT

REPORT REPRINT

Cloud Cruiser’s smart meter for the cloud targets midmarketWILLIAM FELLOWS 8 F E B , 20 1 6The company has introduced a SaaS ‘smart meter’ for the cloud. Cloud Cruiser 16 has been developed on a new code base, compared with the existing (and non-SaaS) Cloud Cruiser 4. The release marks a diversification of sorts as it targets the midmarket for the first time.

©2016 451 Research, LLC | W W W. 4 5 1 R E S E A R C H . C O M

THIS REPORT, LICENSED EXCLUSIVELY TO CLOUD CRUISER, DEVELOPED AND AS PROVIDED BY

451 RESEARCH, LLC, SHALL BE OWNED IN ITS ENTIRETY BY 451 RESEARCH, LLC. THIS REPORT IS

SOLELY INTENDED FOR USE BY THE RECIPIENT AND MAY NOT BE REPRODUCED OR REPOSTED, IN

WHOLE OR IN PART, BY THE RECIPIENT, WITHOUT EXPRESS PERMISSION FROM 451 RESEARCH.

Page 2: Cloud Cruiser’s smart meter for the cloud targets midmarket · Cloud Cruiser’s smart meter for the cloud targets midmarket WILLIAM FELLOWS ... Optus, Accenture and AXA. ... SWOT

Cloud Cruiser has introduced a SaaS ‘smart meter’ for the cloud. Cloud Cruiser 16 has been developed on a new code base, compared with the existing (and non-SaaS) Cloud Cruiser 4. The release marks a diversifica-tion of sorts, as it targets the midmarket for the first time.

T H E 4 5 1 TA K EEnterprises want a verifiable and rapid ROI. This is why consumption planning, optimization, measurement and chargeback are increasingly becoming preconditions for launching a cloud initiative. Firms in this sector are able to demonstrate an immediate benefit of using their tools for saving money or optimizing use. The direction of travel for Cloud Cruiser and other firms is, therefore, toward orchestration, where the data be-comes actionable insight used to optimize the usage of cloud resources. The question is whether these firms become part of broader cloud management platforms by acquisition or partnership – or whether they develop or acquire their own capabilities. Cloud Cruiser 16’s Actionable Insights are a step in this direction, but Cloud Cruiser stresses that it is providing advice for customers so they can manage and optimize consumption; it’s not doing resource reallocation itself.

T EC H N O LO GYWith the latest release, Cloud Cruiser turns its attention to the midmarket, which Cloud Cruiser believes is now spending meaningfully on public cloud. Cloud Cruiser 16 has been designed as an easy to use, self-service tool, which is different from Cloud Cruiser 4. It works across multiple clouds and provides built in dynamic forecasting, budgets and alerts on any dimension.

By contrast, the on-premises Cloud Cruiser 4 is designed for hybrid IT environments – rather than cloud specifically – and requires professional services to get started. Forecasting is delivered in a separate report and budgets are restricted to account structure.

Actionable Insights are new in Cloud Cruiser 16. This includes automated prompts to take action to optimize cloud use; cost saving and operating efficiency discovery; and custom insights on any dimension. Cloud Cruiser 16 also offers SmartTags, which provide rules-based data transformation, importing data about a user’s business structure, which is used to augment reports. It’s an ETL engine which uses rating data to attribute importance to events which can trigger automated actions.

Essentially, the budget alerting in Cloud Cruiser 4 has been extended so in Cloud Cruiser 16 users are provided with rec-ommendations on under-utilized resources from user-defined rules and actions are pin pointed. What’s key here is that the tool normalizes data from the different clouds it supports. AWS, Azure, Google and others use different ways to record usage data, with different fields and naming conventions – SmartTags normalizes this so that users can compare like for like. It will add support for Reserved Instances in future.

B U S I N E S S M O D E LThe base price for Cloud Cruiser 16 – with a single cloud source plus a user pack (for five users), 20 hours of on-boarding and training – is $30,000, plus an annual recurring revenue charge. Each additional cloud is $10,000; each additional five-user pack is $50 per-user per-month (monthly recurring revenue). By contrast, most other vendors in this space charge as a percentage of the customer’s overall cloud bill. Cloud Cruiser 4 is essentially a $50,000-and-up ‘land and expand’ offering.

With strategic OEMs and partners such as Microsoft, Accenture, Rackspace, VMware, OpenStack, Hewlett Packard Enter-prise and Cisco InterCloud, it’s not surprising most of the firm’s revenue is from the channel. However, the direct business is growing and Cloud Cruiser 16 will accelerate this. Cloud Cruiser will continue to develop and support Cloud Cruiser 4, but the Cloud Cruiser 16 SaaS offering is now its strategic direction. It’s likely the two will come together in time.

451 R ES E A R C H R E P R I N T

Page 3: Cloud Cruiser’s smart meter for the cloud targets midmarket · Cloud Cruiser’s smart meter for the cloud targets midmarket WILLIAM FELLOWS ... Optus, Accenture and AXA. ... SWOT

451 R ES E A R C H R E P R I N T

Cloud Cruiser has raised $20.7m funding. It exceeded $8m revenue in 2013 and claims to have grown by substan-tially since then. We estimate revenue to be around $20m. It’s been seeking additional investment for some time now to help it pull away from the pack – although it’s hard to see why its marquee customer list wouldn’t have paved the way to additional funding by now.

Overall, Cloud Cruiser’s business is 70% enterprise and 30% service providers. Paying customer count is in the hun-dreds. Its US business is growing faster than EMEA – the latter accounts for around 40% of revenue. It has around 50 employees – a handful outside of the US. Customers include TD Bank (its Green Cloud is based on OpenStack), Microsoft IT, KPN, BMC Software, Hospital Corporation of America, Optus, Accenture and AXA.

C O M P E T I T I O NThe competitors are numerous although Cloud Cruiser is often used as a benchmark by other firms in this space when drawing comparison or differentiation. Cloudyn, Cloudhealth, Cloudability and Orbitera are closest com-petitors. Key capabilities for firms we track here, which could be used to evaluate offerings, are – at a high level – monitoring and proactive governance. Most competitors offer both of these.

Next is optimization (pricing, sizing, resource relocation, cloud migration). Some firms can take actions, most tend to offer insights which can be ingested by provisioning tools. Most of the vendors offer enterprise features such as cost allocation, reserved instance allocation, price books and showback and chargeback. All firms support AWS, many support Google however a much smaller set also support Azure or private clouds. Those which have chan-nel businesses will likely also offer a reseller and client view for managed service provider partners, profit margin optimization and cross-client resource relocation. Those that have channel businesses will likely also offer a re-seller and client view for managed service provider partners, profit margin optimization and cross-client resource relocation.

Other firms include Talligent, CloudCheckr, Cloudamize, 6fusion, CloudScreener.com, Copper.io, Newvem (Data-pipe), ParkMyCloud, RightScale and Xervmon. Cloud Cruiser claims its biggest competitor is internal spreadsheet management and says it is most often compared to Apptio. Cloud Cruiser sees Apptio’s focus to be on determin-ing costs, whereas it seeks to recover them.

SWOT ANALYSIS

STRENGTHSCloud Cruiser 16 shifts the firm into a new gear as it begins to target a new opportunity in the midmarket where it believes compa-nies are now starting to spend significantly on public cloud computing.

WEAKNESSESFirms in this sector are moving beyond fo-rensic billing and tariff management as they seek the escape velocity to deliver or sup-port full-service orchestration. While Cloud Cruiser is one of the anchors and founding firms in this sector there are now many chal-lengers. Can it keep up with the pace?

OPPORTUNITIESIf Cloud Cruiser has been regarded as the firm with the more complex offering in this sector, the aaS Cloud Cruiser 16 release de-livers a focus on the user experience and service model that will enable it to address midsized firms and engagements that don’t require professional services to get going with the product.

THREATSArguably most revenue among the ‘cloud transformation’ sector firms comes from the cloud consumption management and optimi-zation space where benefit is immediately realizable to the user. The question is what kind of value Cloud Cruiser can achieve on this basis as an acquisition target or as an independent supplier (its stated aim).