IBM i Cloud Watch

March 25, 2013 Dan Burger

Who’s to say that small to midsize companies are ready to move their IT infrastructure off premise to the cloud where it will be managed by people on someone else’s payroll? I can name one person who would. His name is Jay Johnson and he’s vice president of managed services for Sirius Computer Solutions, IBM‘s largest business partner. His managed services program is built around Power Systems and is primarily focused on the IBM i user base.

Last fall, Sirius rolled out a cloud computing program (part of, but separate from, managed services) because it thought the time was right. Small to midsize companies, which comprise almost 90 percent of the IBM i installed base, are growing increasingly weary of dealing with hardware, software, and skilled personnel. For years, Sirius has had a growing managed services business that developed for the reasons noted above. With managed services, the companies continued to purchase hardware and software, but they contracted with Sirius to manage and administer those resources. Now Sirius is convinced the market is ready to take another step, this time into the cloud, where hardware, software, capacity, and services are acquired on a subscription basis.

IT Jungle wrote about this program getting under way in an article published September 17 of last year. Now, six months later, we were curious whether this program, Sirius calls it the Power Cloud, was building momentum and what lessons were being learned.

Coming out of the gate, Johnson was naturally optimistic.

“We were hoping to be wildly successful and see a lot of new business and opportunity,” he admitted. “We have seen some of that, but we also had to make some adjustments.”

As it was originally planned, the Sirius cloud was designed to accommodate a production environment that included development, quality assurance, disaster recovery, and high availability aspects. Sirius contracted for cloud space in Minnesota and Arizona, within huge 500,000 square foot data centers. Early demand for co-location space, primarily X86 servers that required close proximity to the IBM i environment, exceeded expectations and caused Sirius to reorganize its data center space to allow systems to be linked.

A JD Edwards environment was an example Johnson provided. In this case existing front-end X86 servers were moved to the co-lo, which was customer owned and customer managed, but connected to the Sirius owned and managed cloud. As Sirius recognized the importance of the co-lo aspect, it moved in some X86 environments of its own, which gives customers the flexibility to not own the X86 servers, if that is a better option. Customers have also moved their servers into the co-lo space and asked Sirius to manage them, Johnson said.

Co-location capabilities are important to an approximately two-thirds of the companies that have come to Sirius for its cloud, Johnson estimates. Some of those are transitioning their X86 environments from co-lo to cloud so they don’t have to own them anymore.

Because Sirius has a growing managed services business (buoyed by the acquisition of MSI Systems Integrators in 2010), some of its early Power Cloud success can be attributed to the transition of customers from that segment.

“Some of those customers make the move from managed to cloud for cost reasons,” Johnson said. “They are customers who no longer want to own the environment that Sirius is managing.”

Hardware asset decisions are part of a business discussion about owning and depreciating assets. For companies that want a different service delivery model, the cloud adds asset flexibility that managed services, as a combination of operational and administrational aspects that depend on hardware delivery, cannot.

One of the reasons Sirius’ managed services clients are transitioning to the cloud relates to acquisitions or divestures of business units, according to Johnson. In either case, a company sets up an environment, uses it for a period of time, and then shuts it down. That’s one example of cloud flexibility.

Johnson estimates that roughly one-third of the cloud customers are coming from its managed services customers. The remainder are companies that are new to any type of managed services, although as high as 85 percent are companies that have done business with Sirius in the past.

“Our growth in managed service is in Power Cloud,” Johnson said. “It is a cost effective delivery mechanism, but it’s new. We are still working on marketing and getting companies educated about the cloud, but we are seeing a lot of traction without having marketing and sales fully completed.”

Another change from the original all-IBM i plan was to add AIX to the Power Cloud. Johnson said that expansion of the program has been up and running for more than two months. So far the customers are not companies that have both i and AIX environments. They either run one or the other.

“I may have a different story in the future, but right now I see the IBM i customers as the growth market and the mainstay of the Power Cloud,” Johnson said.

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