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Red Hat Hybrid Cloud Management Gets Financial with Cloud Cost Management

Key Stakeholders: CIO, CFO, Accounting Directors and Managers, Procurement Directors and Managers, Telecom Expense Personnel, IT Asset Management Personnel, Cloud Service Managers, Enterprise Architects

Why It Matters: As enterprise cloud infrastructure continues to grown 30-40% per year and containerization becomes a top enterprise concern, IT must have tools and a strategy for managing the cost of storage and compute associated with both hybrid cloud and container spend. With Cloud Cost Management, Red Hat provides an option for its considerable customer base.

Key Takeaways: Red Hat OpenShift customers seeking to managing the computing costs associated with hybrid cloud and containers should starting trialing Cloud Cost Management when it becomes available in 2019. Effective cost management strategies and tools should be considered table stakes for all enterprise-grade technologies.

Amalgam Insights is a top analyst firm in the analysis of IT subscription cost management, as can be seen in our:

In this context, Red Hat’s intended development of multi-cloud cost management integrated with CloudForms is an exciting announcement for the cloud market. This product, scheduled to come out in early 2019, will allow enterprises supporting multiple cloud vendors to support workload-specific cost management, which Amalgam Insights considers to be a significant advancement in the cloud cost management market.

And this product comes at a time when cloud infrastructure cost management has seen significant investment including VMware’s $500 million purchase of Boston-based CloudHealth Technologies, the 2017 $50 million “Series A” investment in CloudCheckr, investments in this area by leading Telecom and Technology Expense Management vendors such as Tangoe and Calero, and recent acquisitions and launches in this area from the likes of Apptio, BMC, Microsoft, HPE, and Nutanix.

However, the vast majority of these tools are currently lacking in the granular management of cloud workloads that can be tracked at a service level and then appropriately cross-charged to a project, department, or location. This capability will be increasingly important as application workloads become increasingly nuanced and revenue-driven accounting of IT becomes increasingly important. Amalgam Insights believes that, despite the significant activity in cloud cost management, that this market is just starting to reach a basic level of maturity as enterprises continue to increase their cloud infrastructure spend by 40% per year or more and start using multiple cloud vendors to deal with a variety of storage, computing, machine learning, application, service, integration, and hybrid infrastructure needs.

Red Hat Screenshot of Hybrid Cloud Cost Management

As can be seen from the screenshot, Red Hat’s intended Hybrid Cloud Cost Management offering reflects both modern design and support for both cloud spend and container spend. Given the enterprise demand for third-party and hybrid cloud cost management solutions, it makes sense to have an OpenShift-focused cost management solution.

Amalgam Insights has constantly promoted the importance of formalized technology cost management initiatives and their ability in reducing IT cost categories by 30% or more. We believe that Red Hat’s foray into Hybrid Cloud Cost Management has an opportunity to compete with a crowded field of competitors in managing multi-cloud and hybrid cloud spend. Despite the competitive landscape already in play, Red Hat’s focus on the OpenShift platform as a starting point for cost management will be valuable for understanding cloud spend at container, workload, and microservices levels that are currently poorly understood by IT executives.

My colleague Tom Petrocelli has noted that “I would expect to see more and more development shift to open source until it is the dominant way to develop large scale infrastructure software.” As this shift takes place, the need to manage the financial and operational accounting of these large-scale projects will become a significant IT challenge. Red Hat is demonstrating its awareness of this challenge and has created a solution that should be considered by enterprises that are embracing both Open Source and the cloud as the foundations for their future IT development.

Recommendations

Companies already using OpenShift should look forward to trialling Cloud Cost Management when it comes out in early 2019. This product provides an opportunity to effectively track the storage and compute costs of OpenShift workloads across all relevant infrastructure. As hybrid and multi-cloud management becomes increasingly common, IT organizations will need a centralized capability to track their increasingly complex usage associated with the OpenShift Container Platform.

Cloud Service Management and Technology Expense Management solutions focused on tracking Infrastructure as a Service spend should consider integration with Red Hat’s Cloud Cost Management solution. Rather than rebuild the wheel, these vendors can take advantage of the work already done by RedHat to track container spend.

And for Red Hat, Amalgam Insights provides the suggestion that Cloud Cost Management become more integrated with CloudForms over time. The most effective expense management practices for complex IT spend categories always include a combination of contracts, inventory, invoices, usage, service orders, service commitments, vendor comparisons, and technology category comparisons. To gain this holistic view that optmizes infrastructure expenses, cloud procurement and expense specialists will increasingly demand this complete view across the entire lifecycle of services.

Although this Cloud Cost Management capability has room to grow, Amalgam Insights expects this tool to quickly become a mainstay, either as a standalone tool or as integrated inputs within an enterprise’s technology expense or cloud service management solution. As with all things Red Hat, Amalgam Insights expects rapid initial adoption within the Red Hat community in 2019-2020 which will drive down enterprise infrastructure total cost of ownership and increase visibility for enterprise architects, financial controllers, and accounting managers responsible for responsible IT cost management.

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Observations on the Future of Red Hat from Red Hat Analyst Day

On November 8th, 2018, Amalgam Insights analysts Tom Petrocelli and Hyoun Park attended the Red Hat Analyst Day in Boston, MA. We had the opportunity to visit Red Hat’s Boston office in the rapidly-growing Innovation District, which has become a key tech center for enterprise technology companies. In attending this event, my goal was to learn more about the Red Hat culture that is being acquired as well as to see how Red Hat was taking on the challenges of multi-cloud management.

Throughout Red Hat’s presentations throughout the day, there was a constant theme of effective cross-selling, growing deal sizes including a record 73 deals of over $1 million in the last quarter, over 600 accounts with over $1 million in business in the last year, and increased wallet share year-over-year for top clients with 24 out of 25 of the largest clients increasing spend by an average of 15%. The current health of Red Hat is undeniable, regardless of the foibles of the public market. And the consistency of Red Hat’s focus on Open Source was undeniable across infrastructure, integration, application development, IT automation, IT optimization, and partner solutions, which demonstrated how synchronized and focused the entire Red Hat executive team presenters were, including Continue reading Observations on the Future of Red Hat from Red Hat Analyst Day

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Torchbearer Case Study: OceanX Delivers the Consumer Subscription Experience with Oracle Cloud Infrastructure

(Note: Torchbearer Case Studies provide enterprises with a strong example of the “Art of the Possible” in using technology to enhance their business environment. Amalgam Insights provides emerging best practices based on the experience of the Torchbearer to inspire and educate Early Adopter and Early Majority buyers seeking to develop a strategic advantage.)

At Oracle Open World, I was interested in learning more about the Oracle Cloud and its role in data and analytics. Although Oracle has admittedly been relatively late to the enterprise cloud, the Oracle Cloud was front and center throughout Oracle Open World and it was interesting to see how Oracle was able to bring up enterprise technology deployments across its portfolio. One example of enterprise success in working with the Oracle Cloud that stood out was from OceanX.

At Oracle Open World, OceanX won the 2018 Oracle Innovation Award for Data Management. OceanX is a spinoff of Guthy-Renker started in 2016 to provide an integrated subscription commerce platform which brings together e-commerce, fulfilment, customer service, and business analytics associated with direct-to-consumer subscription programs. This allows consumer brands to provide personalized and bespoke products in their subscription offerings and to build consumer relationships based on a holistic view of the customer’s preferences, purchases, and interactions.
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Containers Continue on Track for 2019: 3 Key Trends For the Maturing Container Ecosystem

Tom Petrocelli, Amalgam Insights Research Fellow

The past few years have been exciting ones for containers. All types of tools are available and a defined deployment pipeline has begun to emerge. Kubernetes and Docker have come to dominate the core technology. That, in turn, has brought the type of stability that allows for wide-scale deployments. The container ecosystem has exploded with lots of new software components that help maintain, manage, and operate container networks. Capabilities such as logging, load balancing, networking, and security that were previously the domain of system-wide software and appliances are now being brought into the individual application as components in the container cluster.

Open Source has played a big part in this process. The Cloud Native Computing Foundation, or CNCF, has projects for all things container. More are added every day. That is in addition to the many other open source projects that support container architectures. The ecosystem just keeps growing.

Where do we go from here, at least through 2019? Continue reading Containers Continue on Track for 2019: 3 Key Trends For the Maturing Container Ecosystem

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Allego’s Point-in-Time Video Feedback Trains People Skills in the Sales Brain: A Market Milestone

 In a recently published Market Milestone, Todd Maddox, Ph.D., Learning Scientist and Research Fellow for Amalgam Insights, evaluated Allego’s Point-in-Time Video Feedback offering from a learning science perspective—the marriage of psychology and brain science. This involves evaluating the offering to determine whether it engages psychological processes and learning systems in the brain effectively. Amalgam’s overall evaluation is that Allego’s Point-in-Time Video Feedback offering is highly effective.

Allego’s Point-in-Time Video Feedback offering allows feedback to be inserted and embedded throughout the sales professionals’ videotaped pitch. This feedback can be targeted and specific to some aspect of the pitch at that point-in-time. From a learning science perspective, the sales professional can visualize themselves and “relive” the experience giving the pitch and can receive corrective feedback on the fly. This simulates real-time, interactive feedback and is much more effective at engaging the appropriate people skills brain regions than receiving feedback at the end of the pitch. It is also scalable, which is a serious challenge for truly interactive offerings.

For more information, read the full Market Milestone at https://www.allego.com/resources/amalgam-insights-market-milestone-video-feedback/.

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Artificial Intelligence/Machine Learning (AI/ML) and Learning Systems in the Brain

Simulating Learning Processes in the Brain With AI/ML

Key Stakeholders: Chief Learning Officers, Chief Human Resource Officers, Learning and Development Directors and Managers, Corporate Trainers, Content and Learning Product Managers.

Why It Matters: The skills necessary for success in the corporate world are varied and include hard skills, people skills and situational awareness. While L&D is embracing the use of AI/ML to analyze learners’ data and to personalize learning paths, curate effective content, and attempt to better engage learners, what L&D has failed to embrace is the application of AI/ML to model each of these distinct learning systems, and their interactions.

Top Takeaway: Corporate learning vendors would be well served to develop AI/ML models that capture the processing characteristics of the three learning systems in the brain known to mediate hard skills, soft skills, and situational awareness learning. A comprehensive AI/ML model that captured the processing characteristics of each of these three distinct learning systems could be used to develop and test products and tools that optimize content curation, learning paths, engagement, and delivery processes that will differ substantially across systems and tasks to be learned.

Vendors with the Skillset and Expertise to Build this AI/ML Tool: Cornerstone, CrossKnowledge, IBM, Infor, LTG, Oracle, Saba, Salesforce, SAP, Workday, and likely many others.

Artificial Intelligence/Machine Learning and L&D

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The Scientific Case for Augmenting Learning Management Systems with Percipio Experience Services

Leveraging Brain Science to Build a Modern Learning Ecosystem

Key Stakeholders: Chief Learning Officers, Chief Human Resource Officers, Learning and Development Directors and Managers, Corporate Trainers, Content and Learning Product Managers.

Why It Matters: Many companies today aim to deliver a more modern learning experience to their employees, but they’ve already invested heavily in a Learning Management System (LMS) or other tools that may lack some of the learner engagement and content curation features that can be found in emerging Learning Experience Platforms. They need a hybrid solution that provides services associated with a modern Learning Experience Platform that can be integrated with their existing LMS. Continue reading The Scientific Case for Augmenting Learning Management Systems with Percipio Experience Services

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Autumnal Tech Advice from Amalgam Insights

Amalgam Insights has been busy the past month in exploring a variety of trends across IT subscriptions, DevOps, Brain Science, and Data Science. In case you’ve missed it, check out our seasonal newsletter and get educated on the key trends that are augmenting our use of technology including:

  • For IT budget and spend management, traditional asset and spend management approaches are falling short
  • Artificial Intelligence (AI) is being treated as a ubiquitous technology
  • Open Source is now a foundation for enterprise IT
  • Learning and Development suffers from the challenge of taking on cognitive bias.

Catch up with Amalgam Insights’ analysts at work this Fall and find out how to:

And to subscribe to our newsletter, please sign up here.

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Data Science and Machine Learning News, October 2018

On a monthly basis, I will be rounding up key news associated with the Data Science Platforms space for Amalgam Insights. Companies covered will include: Alteryx, Anaconda, Cambridge Semantics, Cloudera, Databricks, Dataiku, DataRobot, Datawatch, DominoElastic, H2O.ai, IBM, Immuta, Informatica, KNIME, MathWorks, Microsoft, Oracle, Paxata, RapidMiner, SAP, SAS, Tableau, Talend, Teradata, TIBCO, Trifacta, TROVE.

Continue reading Data Science and Machine Learning News, October 2018

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Is IBM’s Acquisition of Red Hat the Biggest Acquihire of All Time?

Estimated Reading Time: 11 minutes

Internally, Amalgam Insights has been discussing why IBM chose to acquire Red Hat for $34 billion dollars fairly intensely. Our key questions included:

  • Why would IBM purchase Red Hat when they’re already partners?
  • Why purchase Red Hat when the code is Open Source?
  • Why did IBM offer a whopping $34 billion, $20 billion more than IBM currently has on hand?

As a starting point, we posit that IBM’s biggest challenge is not an inability to understand its business challenges, but a fundamental consulting mindset that starts with the top on down. By this, we mean that IBM is great at identifying and finding solutions on a project-specific basis. For instance, SoftLayer, Weather Company, Bluewolf, and Promontory Financial are all relatively recent acquisitions that made sense and were mostly applauded at the time. But even as IBM makes smart investments, IBM has either forgotten or not learned the modern rules for how to launch, develop, and maintain software businesses. At a time when software is eating everything, this is a fundamental problem that IBM needs to solve.

The real question for IBM is whether IBM can manage itself as a modern software company.

Continue reading Is IBM’s Acquisition of Red Hat the Biggest Acquihire of All Time?