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Rackspace: Cloud cost optimization an IT pain point

New research by Rackspace Technology revealed organizations are grappling with cloud cost governance and optimization; other channel news from the week.

Cloud cost optimization continues to befuddle corporate IT buyers, a situation the COVID-19 economy only exacerbates.

Half of IT decision-makers "lack a basic understanding" of cloud cost governance and cloud cost optimization, according to a Rackspace Technology report, based on a survey of more than 1,500 IT department directors. Published this week, the report also found that about 80% of respondents expressed new concerns regarding budgets or costs in the last three months -- anxiety attributable to the pandemic.

"Many IT stakeholders, we found, don't actually understand the opportunities available for cost management within the cloud," said Jeff DeVerter, CTO of products and services at Rackspace.

Confusion points to wasted money

The inability of many IT directors to distinguish between cloud cost governance and optimization points to an issue that goes beyond semantics.

"This confusion signals that organizations aren't properly governing and optimizing costs and could be wasting an incredible amount of money," DeVerter said.

Cost governance is a strategy that guides an organization's cost management approaches, while cost optimization is an ongoing method for meeting cost governance goals, he added.

Partners in 2016 pointed to a dearth of cloud governance and financial management as a problem with the cloud. The cloud cost struggle emerged as a top technology trend in 2019. A survey at that time revealed that most IT leaders overshot their cloud budgets.

Addressing cloud cost optimization

Scott Strickland, executive vice president and CIO at Wyndham Hotels & Resorts, recommended assessing antiquated network setups such as multiprotocol label switching, (MPLS) as one route to cost savings. Wyndham Hotels worked with Rackspace to modernize and optimize its legacy IT infrastructure, realizing first-year cost savings of 45%.

Strickland, who spoke during a Rackspace-hosted virtual panel discussion, also suggested keeping the number of IT platforms to a minimum via standardization. Wyndham Hotels, for example, operates one platform to run central reservations and another for handling its brand websites, using a single interface between the two.

"But as soon as you have two platforms in any of those areas, suddenly you have more than doubled your costs," Strickland said. "And that isn't just a cost play. That's a maintenance play, and that's a speed or time-to-market [play], and that's an innovation play."

Partner companies have developed tools and services for tackling the cloud cost optimization issue. Rackspace Technology, for its part, has rolled out its Cloud Optimization Solution, which the company said offers guidance to help clients address cloud cost and performance optimization.

Getting a handle on cloud spending could help organizations faced with reallocating funds amid COVID-19-related IT priorities.

Businesses polled in the Rackspace report also noted a 59% increase in spending on remote work technologies such as virtual desktop infrastructure, productivity and video conferencing/collaboration. That spending pattern called for organizations to shift budget away from planned initiatives, Rackspace noted.

Menlo Security taps cloud partners with vertical skills

Menlo Security is building a channel program around a set of regional and national partners focusing on cloud security and vertical markets such as healthcare, financial services and the federal government.

The Mountain View, Calif., company, which offers cloud proxy and isolation technologies, launched its Boost! Channel Program in November 2019. The program is geared toward VARs, distributors, managed security services providers and systems integrators. The company has added 25 partners in the Americas region in less than a year but aims to keep its partner population in check.

"We want to keep a finite set of partners," said Danielle Wilson, director of U.S. channels at Menlo Security. "One benefit of having such a limited group of partners is we are truly able to build out go-to-market plans for our partners and execute on those."

That focus, Wilson suggested, has helped the partner program achieve quarterly growth in registered deals of more than 117% and 45% channel revenue growth in the U.S. during the first half of 2020.

As the second half of 2020 unfolds, Menlo Security is developing "certification processes to better enable our partner community to perform services around Menlo Security," Wilson said.

In general, the cloud security company depends on partners to integrate its technology into customers' firewalls, security information and event management systems and other security platforms, she noted.

"We rely on partners to understand their customers' networks and understand how Menlo Security is going to fit into that security stack," she said.

Education -- for channel partners and customers -- is another area of emphasis for Menlo Security. The company's approach to isolation will be a key theme. "Isolation has been around for a while, but we do it a bit differently," Wilson said. She cited the company's cloud proxy platform, which is built on its Isolation Core technology.

Organizations now recognize the need for isolation, Wilson added, given the increase in malware and ransomware attacks.

Menlo Security is also expanding it channel team in the federal government market, a fairly new area for the company's channel efforts. Wilson said the company is in conversation with federal integrators and is working with cloud-focused resellers in that vertical.

Axcient enhances partner program

Axcient, a business availability software vendor that targets MSPs, has expanded its partner program.

The updated program more clearly defines its four partner tiers -- Registered, Silver, Gold and Platinum -- and the incremental resources and benefits that each tier offers. Partners can advance up the tier structure by investing in technical training, joint business plans, go-to-market campaigns and product adoption, Axcient said.

Angus Robertson, chief revenue officer at Axcient, said the partner program "was fairly loosely defined" prior to these latest updates. The enhancements were based on feedback Axcient had received from partners, including its partner advisory council, he said.

Robertson added that the expanded program also features new partner enablement resources, as well as marketing tools such as prebuilt campaigns.

Among the opportunities that Axcient has identified for its partners is to offer business availability around Microsoft Office 365. "There is a real opportunity there for a lot to managed service providers, and it is an easier path for a lot of VARs to start adding managed services to their portfolios," he said.

Axcient works with more 3,000 partners. Robertson said the company's partner base consists of mostly MSPs but also includes VARs and managed print companies that have a managed services department.

Other news

  • Most enterprise IT executives are pushing on with their digital transformation initiatives as the COVID-19 pandemic continues. A cloud trends survey from 2nd Watch, professional services and managed cloud company based in Seattle, found 60% of the respondents are prioritizing projects, such as enterprise-wide digital transformation, with potentially large payoffs. The company surveyed more than 100 cloud-focused IT directors in companies with annual IT budgets of at least $50 million. Nearly half of the IT executives polled said "now is the time to position their company for the long haul," according to 2nd Watch. Other partner companies and industry watchers have cited the acceleration of digital transformation
  • Accenture is working with Equinor, an energy company based in Norway, to migrate its SAP systems to Microsoft Azure. Accenture said it will use MyWizard, the company's proprietary intelligent automation platform, to "automate processes across the enterprise." In other company news, Accenture has acquired CreativeDrive, a content production firm.
  • Cognizant is partnering with Tricentis to offer an integrated testing offering for companies making the jump from SAP Enterprise Core Components to SAP S/4HANA. The offering uses automated, AI-based tools for continuous testing, according to the companies.
  • Information capture vendor Kodak Alaris entered a global alliance with UiPath, a robotic process automation software company. Under the alliance, both companies' channel partners and companies will gain access to Kodak Alaris' information capture products and UiPath software, Kodak Alaris said.
  • MSP software vendor ConnectWise set the date for its virtual IT Nation Secure conference. The cybersecurity-focused event will be held from Oct. 14 to 15. ConnectWise also expanded its Certify cybersecurity training series with a Certify Advanced playbook and set of associated courses. The company said Certify Advanced supplements its existing Certify Fundamentals training. Certify Advanced will be conducted virtually over the next 12 months with a typical time commitment of three to four hours per month. Students can participate in three separate educational tracks: Secure Operations, Virtual Chief Information Security Officer and Advanced Sales.
  • The University of South Carolina tapped PIER Group LLC, a higher education IT consultancy based in Jasper, Ind., and Aruba, a Hewlett Packard Enterprise company, to upgrade the school's main campus wireless network.
  • Distributor Ingram Micro made Veritas' SaaS backup offerings available to channel partners through its Cloud Marketplace. The as-a-service distribution approach is a first for Veritas, according to the companies. Additionally, Ingram Micro will provide direct-to-cloud backup and disaster recovery services from Arcserve, a data and ransomware protection vendor, to U.S. partners through the online marketplace.
  • Lifesize, a provider of cloud-based video conferencing services and integrated equipment, based in Austin, Texas, acquired Kaptivo, a digital collaboration solutions company. A spokeswoman for Lifesize said the companies are now integrating their partner programs.
  • Remote monitoring and management platform vendor NinjaRMM released Ninja Data Protection, a file and folder and image backup product. Ninja Data Protection integrates with NinjaRMM's core platform, the vendor said.
  • Intact, a Microsoft Cloud Solution Provider based in Tallahassee, Fla., partnered with CenturyLink to secure a General Services Administration Schedule 70 contract. Under the schedule contract, Intact will offer its ReAccess and PowerLine cloud services offerings to federal, state and local government agencies.
  • Contentstack, a content experience platform provider, launched a channel program. The company's Catalysts partner program, which targets technology and service providers, offers a portal with product information and access to a credentialing program. Partners can register for and collaborate on deals, according to the San Francisco company.
  • Datadobi, a Belgian company that provides unstructured data migration software, is collaborating with Melillo Consulting, a technology solutions integrator. The companies are focusing on the healthcare data management market.
  • Dell Technologies named Rola Dagher as its global channel chief. Dagher will begin her new role on Sept. 7, replacing Joyce Mullen, who announced her exit from Dell in July, Dell said. Dagher previously held sales and leadership roles in Dell's Enterprise segment and Infrastructure Solutions Group. She rejoins Dell from Cisco Systems Canada, where she served as president for three years.
  • Hewlett Packard Enterprise is currently seeking a new global channel chief, following its current chief, Paul Hunter, being appointed as HPE North America managing director.
  • Lemongrass, an MSP based in Atlanta, appointed Vince Lubsey as CTO. Lubsey was previously co-founder and executive vice president for product management and solution architecture at Virtustream.
  • Tibco Software Inc., an enterprise data company based in Palo Alto, Calif., appointed Tony Beller as senior vice president of worldwide partner ecosystems and OEM sales. Beller's purview will include service providers, resellers, systems integrators, independent software vendors, OEM partners and technology partners.

Market Share is a news roundup published every Friday.

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