VMware CEO Pat Gelsinger

Both execs, Javier Soltero and Kevin Henrikson, joined VC company Redpoint Ventures as entrepreneurs in residence.

Soltero joined VMware by virtue of its acquisition of SpringSource in 2009 — after having joined SpringSource by virtue of that company’s acquisition of Hyperic. At VMware he was the CTO of SaaS and application services.

Henrickson was senior director of R&D for Zimbra, the open-source email product VMware acquired from Yahoo also in 2009. The dual departures were first reported by TechCrunch.

It was clear last year that VMware was scaling back on applications — which had been a key part of former CEO Paul Maritz’s strategy. It subsequently spun off the Java-based Spring framework along with Cloud Foundry and other assets to Pivotal where they will be part of that company’s universal PaaS push.

Selling off the non-essentials

It’s fairly clear that VMware would like to divest itself of Zimbra, which doesn’t fit into its new IaaS worldview, just as it sold off SlideRocket to Clearslide and Wavemaker Java technology to Pramati, both in March. (Pramati just announced Cloudjee a new company pushing a cloud development platform incorporating Wavemaker technology.)

Early this month, Patrick Chanezon, who led developer relationships for both Spring and Cloud Foundry efforts at VMware, joined Microsoft as director of enterprise evangelism.

We can’t say that VMware didn’t warn us. In January, CEO Pat Gelsinger clearly stated the company’s need to focus and eliminate distractions. At about that same time CTO Stephen Herrod left the company for General Catalyst. Oh, and by the way, Gelsinger will be on hand at Structure 2013 to discuss VMware’s IaaS plans.

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Here’s why: As Amazon Web Services keeps churning out services, support offerings and certifications to appeal to corporate and government users (the latest being FedRAMP accreditation), other cloud vendors need to show that they offer value above and beyond AWS. Hybrid cloud, which pairs local processing power with outside cloud resources as needed, is one area that they see as a weakness for Amazon.

AWS versus everyone else

While none of these rivals refer to themselves as AWS killers (smart move), they all see Amazon as the #1 cloud player and the top threat to their own cloud ambitions. When pressed, VMwarez senior vice president Matthew Lodge acknowledged that “everyone is competing for the same IaaS dollars.” Everyone meaning Amazon and the rest of the cloud contenders.

VMware, which saw, um, limited uptake of the vCloud Director that it pushed service providers to use as the basis for their own clouds, said its new vCloud Hybrid Cloud Services will compete with AWS on price, at least in some cases, but offer other enterprise-worthy goodies.

Said Lodge: when you factor in “hidden costs” in Amazon’s dedicated instances, the playing field levels out. “They charge for I/O and we don’t. They charge for VPN endpoints, load balancers and firewalls and we don’t,” he said.

Rackspace president Lew Moorman has a similar message. “Now that public cloud is 3 to 4 years old in reality, applications are bigger and more complex and people are starting to see tradeoffs to using public cloud only,” Moorman told me Thursday.

Structure 2012: Lew Moorman – Rackspace

“When public cloud came out and you could suddenly provision a server in a minute when it used to take 3 months, those were intoxicating advances … you get drunk on them but when things settle in there are tradeoffs,” he said.

For examle, what’s great for test-and-dev environments is not always optimal for production workloads, where public cloud costs quickly add up.

Once someone hits the $25,000-a-month milestone, “it’s time to rethink all-public-cloud deployment,” he said.

Joyent trumpeted a similar message this week when it announced a raft of new compute instances it says will be  competitive with AWS.  Joyent, like Rackspace, offers public, private and hybrid cloud options.

Corporate cloud purchases are about more than price and technology

Having said all that, almost every cloud vendor alive will also add that price isn’t the compelling reason to move to cloud. Face it: when it comes to IT-sanctioned technology purchases, it’s not just about the price or the technology. IT departments have established procedures and guidelines for deployment and cloud providers will have to accommodate them.

“Most public clouds — AWS etc. — don’t offer enterprise-class security, compliance or performance SLAs to users,” said Rodney Rogers, CEO of Virtustream, which positions itself as an enterprise cloud provider. ”Some public clouds offer supplemental services that dedicate equipment to enterprises/government, but they are generally not multi-tenant  and so deliver less efficiency.”

That means they remain suited for test and dev, for backup, SaaS apps and apps with no performance criteria, Rogers said via email.

Is Amazon’s head start insurmountable?

Granted all of this is self serving talk, but having sat through a raft of CIO panels this week, it is clear to me that some of these points ring true with this constituency.  But, if we’ve learned anything from the past 6 years of its existence, AWS won’t stand still. It now offers several services of its own and through an alliance with Eucalyptus that break down some barriers between a customer data center and its cloud. But until you can run AWS instances on your own infrastructure, AWS will remain a public cloud provider in a world where more workloads could flow to a hybrid model.

Structure 2010: Werner Vogels – CTO and Vice President, Amazon

AWS has a huge head start and lots of customers. But we’re early in the cloud era. IDC says less than 5 percent of the world’s total IT budget is now devoted to public or private cloud. That leaves a lot of upside for Amazon and its competitors.

There’s time for Amazon to offer more hybrid options and for rivals to catch up. It’ll nothing if not an interesting market over the next few years.

Who wants to bet that this topic of hybrid vs. public cloud deployment will come up at Structure 2013 next month where both Moorman and Amazon CTO Werner Vogels will take the stage?

Pretty safe money, I’d say.

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Here are my highly subjective highlights:

1: David Ortiz.

A (very fuzzy) David Ortiz at TechStars Demo Day.

There was a bona fide Big Papi moment on stage as the Red Sox superstar and overall Boston-superhero David Ortiz strode on stage to greet Fancred CEO Kash Razzaghi. This startup is building a “social platform” to connect sports aficionados with like-minded fans. Ortiz demanded that Rassaghi “get the Yankees off my cell phone.” (I dropped my phone but recovered in time to get one sub-par shot at left.)

Is there really room for a sports fan platform? Doubtful. But, hey, I’ve been wrong before. And did I mention DAVID ORTIZ???

2: A platform for sustainable, local food

I love the idea behind Freight Farms, which takes shipping crates and retrofits them with water, electricity,  internet access and LED lighting to convert them into compact hydroponic gardens.

The elegant idea is to “take the very structure that makes the global food supply chain possible and make it into a platform for producing local food,” said Brad McNamara, Freight Farms CEO.

Freight Farms CEO Brad McNamara.

They are remotely controlled and stackable which means they take up less real estate. Freight Farms has signed several customers including Katsiroubas Brothers,  a 100-year old Boston produce wholesaler, which is looking for ways to cut transport costs and offer more local product.

“There is nothing better than fresh local food, but the reality is food distribution is a long complicated supply chain — most goods travel 1,500 miles on average to get to your table,” said McNamara.

Freight Farm-grown crops require less water, no pesticides or herbicides. My question: Will their tomatoes taste like other hot-house tomatoes (i.e., like cardboard) or like an actual tomato? If it’s the latter, I’m totally sold.

3: DIY clothing design

In a nod to the burgeoning “maker movement” or do-it-yourself crowd, Mary Huang was to hand to talk up Constrvct, her startup that’s building service that lets you design 3-D clothing onscreen, tweak the size and styling with easy slidebar controls, preview your design on an onscreen mannequin and then make your clothes to order.

“Makers are underserved in the do-it-yourself market — they’re stuck at the same starting point as their grandmothers,” Huang said. Interest in home-designed clothes is rising thanks to Pinterest and Project Runway, she said, quoting a surprising stat: 3 million sewing machines sold last year, double the number from ten years ago.

4: Fixing manufacturing

LinkCycle says it can use its own data science — and existing data — to help manufacturing plants drastically cut their energy costs.

These facilities — many of them rust belt relics — are notorious for wasting energy and to remedy that many spend millions installing meters and hiring auditors to help. Most of that spending is also a waste, according to LinkCycle CEO Sahil Sahni.

“Why spend so much time gathering data when companies are already sitting on heaps of it?” he asked.

LinkCycle instead takes two existing data streams from the ERP systems already running these companies — electricity consumption and total production output. “We developed our own algorithms to take that data and use math — not meters — to save money without having to set foot in the plant,” he said.

Wow, that sounds so easy it makes you wonder why someone else hasn’t done it. Well except for that algorithm part anyway.

So, the new venue was fab but it suffered the same woe as past Techstars events — a lack of reliable connectivity. We soldiered through with personal hotspots and (finally) some intermittent Wifi connections but can’t one of these deep-pocketed sponsors finally figure out how to get reliable broadband into these events? (I’m  looking at you  Microsoft, Rackspace, Verizon and Softlayer.)

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A week after Google announced its Cloud Datastore, a managed NoSQL database, it’s cutting its price.

That means a 25 percent lower prices in some cases for both Cloud Datastore per se and Google App Engine’s High Replication Datastore (HRD), according to a Google blog post.

So that’s the latest cloud price cut, but it won’t be the last. Next up: Amazon? Microsoft?

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Joyent CEO Henry Wasik

San Francisco-based Joyent has made noises about going up against Amazon before  but now it’s more than tripled the number of instance types it will offer, including 7 different “standard” instance types with RAM allocations ranging from 0.5 to 128 GB; 5 high-memory instances; 6 high-CPU instances; 3 high-storage instances; and 3 high I/O instances (see chart.) But that’s just the beginning, said Joyent CEO Henry Wasik, who joined the company in November.

“We’ve completely reformatted what we do and dramatically expanded the number of instances — originally we had 10 and now 27, but once the portal is turned we’ll have 71,” said he said.

Depending on the workload, Joyent services may well be cheaper than AWS, he said. (Stay tuned for Amazon’s response.) But as many have pointed out, for cloud providers, competing on price alone is a fool’s errand.

Joyent seeks to differentiate itself on how well it runs high-performance applications on its own SmartOS (or on Linux or Windows);  the tooling it provides; its service and support; and its ability to offer the hybrid cloud option that many companies prefer.

Earlier this week Dell said it would offer Joyent as one of three public cloud options it will sell to customers. Dell had promised to deliver an OpenStack-based public cloud this year, but thought better of it.

Face it, in the cloud computing world, it’s Amazon first and then everyone else. In one of my favorite posts of the year comparing cloud providers to hamburger franchises, GigaOM’s Derrick Harris posited that AWS is McDonalds, Rackspace is Wendy’s but a handful of providers — Joyent, Virtustream, CloudSigma — represent the In-N-Out Burger (yum!) or Five Guys of cloud.  He wrote:

These cloud providers, like their analogous restaurant chains, are damn good at what they do and their patrons are loyal. They’re typically designed for maximum performance, maybe security, too, and will play around with new infrastructural or programming components in order to maintain their edge. They might even be the best at certain things and have some major customers (I’ve seen Maseratis leaving the In-N-Out drive-thru), but cost, geography or the desire to get a chicken sandwich, too, limit the number of users they can attract.

I know that we’re early on in cloud adoption and that the potential workloads moving to cloud is high. But to me it’s clear there will be a shakeout as enterprise players like VMware — which announced its public cloud option this week — along with Dell, IBM, HP and Red Hat try to preserve their traditional IT strengths in a cloud venue while newer look players  built for the cloud — Joyent, Virtustream, and others — gear up.

There may be a ton of work out there but i would bet that some of these players will not be standing in two years’ time.

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“Being the CIO of a tech company is easy, you support 60,000 users and 59,999 think they have your job,” EMC executive vice president and COO  (and former CIO) Sanjay Mirchandani told attendees of the MIT CIO Symposium on Wednesday.

Here are the key takeaways from the conference.

1:  Learn to work well with others

Erik Brynjolfsson, director for Digital Business at MIT Sloan School of Management .

It’s a lesson we were all supposed to learn in grade school but too often IT staff and the business units beyond are not fully in concert. That’s got to stop.

CIOs are tired of being “the department of naysayers” and the best ones embed themselves in the business cases of the company. And they have to be active participants in business talks, not order takers for technology.

In the traditional model with CIOs, it was “‘come in and tell me what your requirements are’ — we need to get out of that we need to have the courage to participate in the process,” said Michael Loo, SVP of Global IT for Avaya.

2: Embrace big data but don’t be bedazzled.

Everyone is besotted by data. The more the better. But a common mistake is to confuse correlation with causation. Without the right background knowledge and statistical analysis tools you can still leap to the wrong conclusions about your data.

“There’s a shocking correlation between lung cancer and people who have ashtrays at home,” said Andrew Lo, professor of Finance at MIT’s Sloane School of Management, to illustrate that point.

Alex “Sandy” Pentland, professor at the MIT Media Lab concurred. “Big data is good for interpolation, when you know the field you’re working in but can be bad for extrapolation where you’re entering new areas,” Pentland said.

3: Stop managing by gut

Having  said that, there is still no substitute for data and metrics, properly applied and analyzed. Early in the war on cancer, medical research was too often hobbled by researchers’  tendency to let intuition drive their trials, said Dmitri Bertsimas, professor of operations research and statistics at MIT’s Sloan School. “We didn’t make a lot of progress,” he said.

“We need to change from opinions and hunches and go with facts and data,” agreed Erik Rynjolfsson, director of the MIT for Digital Business at the Sloan School.

4: Beware the HIPPO

Too often key business and tech strategic decisions are made by the HIPPO, aka the ”Highest-paid Person with an Opinion.” That person may big-foot a process where discussion and pushback are a better way to go.

This is a term I first heard a few weeks ago at another industry event where Phil Swisher, chief innovation officer at Brown Brothers Harriman bemoaned this tendency of HIPPOs to dominate discussion. As The Boston Globe’s Scott Hirsner wrote:

Running experiments is much better than simply taking direction from a HIPPO, as politically difficult as that may be. “Hypothesis testing is better than hunches,” Swisher said.

5: Balance innovation with stability.

Remember, bleeding edge is bleeding for a reason.  Sometimes you do have to simply make sure the trains run on time, while hopefully also making those trains better, faster, cheaper over time.

Kazuhiro Gomi, president and CEO of NTT America, knows from experience. “Many of our customers rely on us to run their systems for them and running things smoothly is sometimes more important than being innovative,” he said.

6: Beware the CMO

There’s been a lot of talk that chief marketing officers will control more of the IT spend than CIOs going forward. Michael Relich, EVP and CIO of Guess Inc., said he was well aware of the study which also said “CMOs and CIOs should be best friends.” That makes sense, he added, because CMOs need data and to get data they need things like point-of-sale systems and e-commerce sites which are, by the way, all about IT.

So, will CMOs get more IT spend then CIOs? According to Relich: “Over my dead body.”

Note: This story was updated at 6:04 a.m. PDT May 24, 2013 to correct an attribution about CMOs getting more IT spend. Michael Relich of Guess Inc,. made the statement, not Avaya’s Michael Loo. I apologize for the error.

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The company’s pitch:

HubSpot loves developers. Like, heart-pounding, chest-thumping, breathless love. Care to play matchmaker?

We’ll give you $30,000 if you refer us to a developer who makes us feel that way.

The company has openings in its Cambridge and Dublin locations and has cash to spend. It netted $35 million in a financing round last November, bringing total funding to about $100 million. One of the priorities for that money was staffing up, CEO Brian Halligan said at the time.

We know that great developers and engineers can write their own tickets, but $30,000 is a big number to give to a friend of a developer. It’s also a great way for any software developer to build a database of potential hires for down the road. I’ve heard of smaller incentives before – Hubspot itself once offered $10,000 — but this is a lotta scratch.

If you know of others please let me know in the comments section below.

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The San Francisco-based company targets new applications that run on its technology but can also run in Amazon and Google public clouds as needed. Juniper is already partnering with Cloudscaling which is using Juniper’s Virtual Network Control in a Virtual Private Cloud (VPC) feature that maps to virtual private clouds in Amazon Web Services.

The funding, “affirms that customers want more than OpenStack. They want an on-premise, OpenStack-based private or public cloud turnkey system solution that delivers architectural and behavioral fidelity with major public clouds like Amazon Web Services,” Cloudscaling CEO Michael Grant said in a statement.

It’s been a sort of rocky week for OpenStack. On Monday, Dell surprised the ecosystem by deep-sixing plans to roll out an OpenStack-based public cloud.

Cloudscaling closed a $4 million Series A round in September 2011. Company CTO Randy Bias, pictured above right, is an OpenStack Foundation board member, and will talk about issues and benefits of cloud adoption at GigaOM’s Structure Europe in September.

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Tools like CloudCheckr’s service can help in the government procurement process — a big deal given the U.S. government’s cloud-first mandate, which requires agencies not only to deploy a different sort of technology, but to readjust how they think about buying and paying for services.

“They have a hard time dealing with cloud costs because they’re so used to fixed-cost contracts,” said James Hirmas, COO of JHC Technology, an AWS consultancy specializing in government work and a prime contractor for the National Institute of Standards and Technology (NIST). JHC worked with CloudCheckr to integrate its service with GovCloud.

With that integration, a customer can see if it’s underutilizing compute instances for a certain task and, if so, advise that the work be moved to a smaller, cheaper instance, for example. CloudCheckr performs compliance checks and best practice analysis for GovCloud environments.

Aaron Klein, COO of Rochester, N.Y.-based CloudCheckr, said the GovCloud service does 90 percent of what it does on the commercial side. “GovCloud is architected differently from other AWS regions,” he said. “First you need access, then you need to delve in and adapt what you have to work best in that environment.” He also pointed out that not all of AWS’s own services are running on GovCloud so far.

Since GovCloud is compliant  with the International Traffic in Arms Regulations  (ITAR) – only U.S.-born personnel can work there or access it. Its help desk is U.S.-only. Background checks are also required.

Amazon itself is clearly gearing up for more government work, having received its FedRAMP certification early this week. That accreditation  should make it easier for more government entities to use GovCloud (or other U.S. regions depending on the workload) without having to go through a lot of redundant testing and paperwork.

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On Tuesday, the Boston-based company is launching a preview of AppGuru which aims to help IT  deal with the burgeoning bring-your-own-application (BYOA) craze which forces admins to deal with cloud-delivered personal applications that employees use at work but may not be officially sanctioned.

AppGuru promises a central console for managing multiple apps; an easy way to create, import or move users which works with Active Directory if it’s installed; and tools for managing licenses. It also vows to provide an easy way to set policy management and granular controls as needed. That’s a mighty tall order.

Michael Simon, CEO of LogMeI

Michael Simon, CEO of the Boston-based company, said LogMeIn gets invaluable perspective from both the consumer and the IT side of the BYOA divide.

“We don’t just have heavily used applications — with 55 million users — but we get visibility from consumer and IT perspectives,” Simon said.

AppGuru will manage LogMeIn’s web conferencing and collaboration application; Joinme screen sharing and Cubby, a Dropbox alternative for businesses, as well as Google Apps and Microsoft Office 365, he said.

Simon said small and medium sized businesses are the company’s sweet spot but it has some very large enterprise accounts as well. Last quarter, for example, it announced a seven-figure deal with Hewlett-Packard, for LogMeIn Rescue, the company’s’ remote support offering.

Simon did not disclose pricing but said AppGuru should be commercially available this fall.

LogMeIn may have the chops to attack both the consumer and admin side of the equation, but it also faces formidable competition on the file-sync-and-share side of its business. Dropbox, the consumer champ, is gearing up Dropbox for Business while Google and Microsoft are pushing their respective application and storage tandems; and other competitors include Accellion, Egnyte and OwnCloud. They all claim to combine Dropbox-like simplicity with enterprise management perks.

That’s probably why LogMeIn is adding enterprise perks that go beyond file storage and sync. The IT issues that arise from BYOD and BYOA will be a hot topic at GigaOM’s Structure Europe event in September.

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