AECCloud Slump Test | Broad Access & Marketing Websites

Before I start to benchmark specific applications against the full NIST Cloud Definition, let me give a feel for how this will work using the Essential Characteristic of Broad Access and the marketing websites of a range of vendors.  I picked marketing websites because they are anonymously accessible and there are no complicated debates over offline access or other intensive use cases. Visit any of the following sites (including our own) on a PC, Mac, Surface Tablet, iPad, Android or iPhone and you will see it determines the device you are on and appropriately displays the information in a digestible format.  You do not need an App, you can use any of the major operating systems or OS based browsers, and it just works.   No distracting downloads or need to think of what device you are using, you simply get work done.  That's Broad Access.






Visit these sites and you will get an array of results depending on your device.  You may have to download an app, get a plugin that may or may not work on your device, or be required to zoom and pinch around, all of which is inefficient to use and/or for them to build.






This should clearly illustrate what Broad Access means.  From here you can start to think about what the pros/cons might be if this was your daily operational software.  In the future I will use a broader spectrum of the NIST Cloud definition and also roll out a basic ranking indicator.  Stay tuned.

AEC Industry Cloud Transition Cost Management: Part 2/7, Definitions

If you missed part 1, I provided an intro and outline about this series on managing the Cost of Cloud Transition for the Architecture, Engineering and Construction Industry.  As a reminder, whether you plan to stay with your current IT solution, go 100% cloud, or somewhere in between, this series will provide you with a modular approach that will be of value either way. To do this, Finance, Operations, and IT professionals may need to learn a bit about each others worlds.   The most common problems I see in  evaluating costs are caused by this lack of cross functional understanding and communication.  With a little time spent exploring each others perspectives; cost, quality and requirements considerations can be more clearly baselined and carried forward into an evaluation.  This series is focused on costs, so to get all stakeholders headed down the same road, here's a few definitions you will need for reference:

On the IT side, the only one you need for this is the NIST Cloud Definition [Link].  This contains a number of definitions in itself, which we will primarily use for categorization vs. talking pros and cons of Cloud.  I use it throughout this site and for daily business.  So far it has passed all the tests in helping communicate cloud transition concepts between IT and non IT professionals.

On the Accounting side, it's a good idea to have a basic understanding and if possible some practical exposure to Generally Accepted Accounting Principles (GAAP) [Link] and key financial statements such as Income Statement/Profit & Loss (P&L) [Link], Balance Sheet [Link], Cash Flow Statement [Link].  I am also throwing in Chart of Accounts [Link] because if nothing else, this will be helpful to make the tie between Operations and Finance disciplines.  Beyond typical accounting, a few acronyms you may here thrown around like magic are Capital Expenditure (CAPEX) [Link] and Operating Expense (OPEX) [Link].

Traditional do it your self advocates will usually lean toward CAPEX.  Proponents of hiring vendors or Cloud providers will usually lean toward OPEX.  From a cost perspective, neither opinion is a magic bullet.  You have to find the bottom line cost to the company to make a good decision.   If your interested in a thorough run down of the CAPEX/OPEX debate related to cloud computing, here's a great article from CIO Magazine [Link] back in 2009.  Don't let the date fool you, not much has changed.

On the Cost Modeling side, Amortization [Link] is a key concept.  Most people know this term from taking out a loan to buy a house or car.  It's important to understand this concept as it applies to business and converting CAPEX to OPEX or Lump Sum to Periodic Payments on an annual, monthly or smaller incremental period.  I like to refer to these as Annualized, Monthilized, etc...  ultimately you will end up with a Total Cost of Ownership (TCO) or Cost of Solution [Link] over a period of time.  The difference between the options will be your Return on Investment (ROI) [Link].

On the Evaluation side, once we have worked out our cost model we can create any number of units for comparison and parity check across the options.  Some of my favorites that focus on the Software Application Layer are Average Cost Per User (ACPU), Average Cost Per License (ACPL), Average Cost Per Application (ACPA), Average Cost Per Application - Desktop (ACPA-D), Average Cost Per Application - Web (ACPA-W).  These averages that tend to be useful in comparison to multi-application solutions like an existing server farm.

I also like using Cost Per Application (CPA), Cost Per Application User (CPAU), Cost Per Application License (CPAL), Cost Per Project (CPP), Cost Per Project Application (CPPA), Cost Per Project User (CPPU), Cost Per Project License (CPPL).  These tend to be more useful in comparison to single application solutions like a SaaS offering.  Feel free to make up your own, as these are not listed in any wikipedia article but you will need some basis for comparison.

While the above points may seem void of AEC Industry specifics, once we get into the other parts of the series I will start to fill in the examples using Construction specific Software Applications from Autodesk, eBuilder, Oracle Primavera, ProCore, Sage, Trimble Buildings, Viewpoint and more.  I will also use some of the more general Software, Platform, and Infrastructure layer products from Citrix, EMC, Microsoft, nVidia, Okta, RSSBus, Salesforce, The Cram Group (My Company), VMWare and more.

That's it for definitions, stay tuned for AEC Industry Cloud Transition Cost Management: Part 3/7, Baselining Traditional IT Costs.


Wesley Smith CEO

A Cloud of Hosting Providers: Know Their Role

I frequently come across several common misconceptions around types of hosting services. The main one is that cloud = off premise hosting. This is incorrect and if you refer to the NIST cloud definition you will see that cloud may include but does not require off premise hosting. Next most common is that self hosted means on premise. This is incorrect as a company could self host in a datacenter that is not on premise. With that clarification, this post will break down the 5 major categories of companies that provide off premise hosting services. I will not get into technical issues or comparing all the quality of one or another, rather the business side which should help readers distinguish what they need and make good strategic decisions. I've listed them in order of completeness in offering a comprehensive business driven IT solution.

1) Traditional Data Centers. Examples are NTT/Verio, Exodus and Qwest. This is good for companies seeking to buy and manage all equipment and software in a better location than their own facility. The data center will provide the physical building, environment controls, redundant Internet, and power systems. They may provide racks, but it's likely you will need to buy your own. Some of them have evolved I to the next category, but generally not much beyond that.

2) Traditional Managed Hosting Providers. Examples are Rackspace, Terremark, NTT/Verio, Amazon EC2, and Microsoft. This is good for companies seeking a general infrastructure provider that will focus on keeping the servers and maybe operating system running. Quite often these providers rent rather than own the datacenter. The cost is generally low because they are not managing your business applications. If you have your own application management team, this can be a good option.

3) Business Software Vendors. Usually a vendor that host their own products or has partnered with one of the above. Examples are Viewpoint, Meridian Systems, CGC, e-Builder, Skire, etc...This is good for companies seeking a single application from one vendor with no other vision. It's also good for companies that like the comfort of getting everything from one entity. The hosting cost (not to be confused with the software cost) will generally be highest since their core focus is selling software and market rates for hosting services generally dilute that margin for shareholders. While their product knowledge may give some cost advantage, it's likely eaten up by inefficiencies in engineering as a second focus to building and selling software. Unless you plan to have 10 of these in different locations from each vendor you work with, this is generally a short term solution. Other limitations will be working with other vendors, especially competing ones, and general innovation around technical management since this is not their core business.

4) Business Software Resellers. This includes any value added reseller (VAR) or general product reseller of a Business Software Vendor. I'm not convinced where this model makes sense because they likely have less knowledge of the product than the vendor and restrictions of other vendors and focus due to being primarily a reseller. Cost will likely be similar to the Business Software Vendor as they tend to follow the vendor for business guidance. Alternatively they may subsidize the hosting services by selling you software, their main focus. These providers will likely have more breadth of offering than Business Software Vendors, however they are usually legally bound to not working with competing products, so this will likely become an issue of you are seeking neutrality in application choices. I am seeing more resellers partner with other provider types in order to offer this valuable service and benefit from the recurring revenue without taking on the risk or burden of changing focus from selling software.

5) Application Hosting Providers. Some examples are The Cram Group's AECCloud service (My own Company), Loadspring, and Assist Global. This is good for a company seeking a partner to manage some or all of their applications in a unified, turnkey environment. They generally work with a combination of types 1 & 2 in order to stay focused on their core business of application management. Cost is usually optimal if they are managing more than one application because you are not paying double for the platform. Similar to type 4, a disadvantage may be access to products, similar to the struggle a typical IT department has. Check into the companies in house skill sets for AEC domain knowledge, AEC Tech knowledge, experience and partnerships. Some advantages (our company does these) will be service focus, Business+IT partner mindset, cost transparency, openness to work with business software vendors & consultants, open to new technologies, continuous R&D around application management.

On Licensing: Types 3, 4, and 5 could offer SaaS (bundled subscription licensing) or Managed Host (you own your own licenses). This has nothing to do with the provider type, and more to do with licensing options from the software vendors. If interested in this, see my 4 part article on Software Licensing.

On Support: Types 3, 4, and 5 may have varying levels of support. Support should not be confused with hosting and should be evaluated separately as it is a different team of people, even if at the same provider, and has little to do with quality in other areas.