Bob Laskey, vice president, global markets, software industry for CenturyLink, says the transformation of the software marketplace – and the industry overall – toward being cloud– and SaaS-enabled is accelerating as we move into 2016 and beyond. What does that mean for CenturyLink and its partners?

For one thing, a broadening definition of who, exactly, is a software vendor. Partners able to deal with everyone from established SaaS providers down to ad-hoc IoT developers will have an edge in providing customers complete solutions. Laskey recommends segmenting the market into a trio of scenarios.

“When we think about this ongoing transformation, you sort of have three different buckets,” he says. “The first is established SaaS providers that are in the market today providing capabilities primarily and predominately via cloud companies like Salesforce, LinkedIn, NetSuite.” These players are mature in terms of business models, technical architectures, channel strategies and how they deliver cloud-based services to their end customers.

“But you have a much broader swath of players in the industry who are very much mixed in terms of heterogeneous infrastructures and architectures, different business models,” he says. These companies typically have broad portfolios of applications, some of them cloud-ready, others that will never make that leap and are strictly an on-premises delivery play, and plenty in between.

“Fundamentally, that swath of software firms are grappling with, how do they shift as much of their portfolio to the cloud to deliver different types of benefits and more agility to their end customers?” asks Laskey. “That transformation, we think, is important for them as well as important for us.”

Then there’s that vast untapped opportunity around big data and Internet of Things.

“The third bucket is outside of the core software industry, and essentially any firm on the planet — from a pizza retailer to industrial equipment manufacturer,” he says. “These shops are actively seeking to take advantage of software to transform the way they interact with their customers, transform the capabilities they deliver through their products, whether it’s big data to get closer to their customers or [the] Internet of Things to provide different services through the products that they sell.”

For CenturyLink and its partners, Laskey cites an opportunity to help these organizations understand how IT systems can enable their business transformations.

“Our portfolio is uniquely broad and deep, from network connectivity solutions to data centers and co-location to managed hosting and managed services, all the way to public and private cloud capabilities,” he says. “That really gives us the opportunity to be …

… a tight technology partner to these firms, to help them with this transformation, to take advantage of software assets and get to cloud in a higher-quality, lower-cost, and more efficient and quick fashion.”

Essentially, provide a hybrid IT capability to these firms and watch them transform to become SaaS providers and deliver more agility and faster time to market to their end customers. What’s not to like?

Laskey also weighed in on CenturyLink’s Cloud Blueprints, why solutions providers need DevOps and APIs, and moving licensing to a consumption model. Yes, it’s difficult because it’s both business and software transformation. But a combination of customer demand and upstart competition will make it less of a choice, and more of a mandate.

Here’s more of our conversation, edited for length and clarity.

Channel Partners: What does your typical partner look like today?

Bob Laskey: Our typical ISV partner spans that entire spectrum, so some of the largest SaaS companies literally on the planet today are consumers of our network infrastructure and our data-center infrastructure. Many of the SaaS providers that have been around for several years have built their own internally developed and operated cloud infrastructures. Those infrastructures sit in our data centers. We have 60 of them across the planet. Many of those companies operate – some exclusively and some partially – inside of our data centers. We have legacy enterprise ISVs to take advantage of our cloud capabilities, all the way down to some of the smallest three- to five-person startup ISVs who are looking at CenturyLink cloud to differentiate a way for them to get access to new markets and new customers. So we really do cover the entire spectrum of small ISVs to large global Fortune 500 ISVs that deliver their services worldwide.

CP: You have quite a mix. So talking about those small ISVs who are using services, what do you see as their opportunity with customers? Where are they making inroads? What’s the popular thing? Is it IoT, mobility apps?

BL: Yes. I think within the small and midmarket ISV segment, there [are] a couple categories that are more actively engaged with us. There’s certainly a swath of players that are interested in trying to help them take advantage of the Internet of Things trend, if you will, finding ways to more effectively enable the instrumentation and collection of data from various centers and capabilities and applications across the Internet. You’ve got classes of companies who are interested in helping firms monetize big data. And you have a large number of companies [that] are in the space of cloud management: How do I help virtualize environments? How do I migrate from physical assets to virtual assets? How do I enable firms to take advantage of more agile software development capabilities, whether it’s different ways to …

… manage your data, different ways to do lease management, different ways to project and program management, different ways to manage my APIs?

One of the ways that we’re working with ISVs in these spaces and others is through a mechanism or an offering that we call CenturyLink Cloud Blueprints. Blueprints are a way for an ISV to templatize the deployment of their solution onto our cloud in a way that allows them to package up and capture best practices for configuration, best practices for deployment — essentially take what could be an hours- or month-long process for configuring and deploying a solution into a cloud literally into a push-button deployment. So for our end customers, that provides us a great way to put ecosystem partners essentially on our shelf to enable our customers who come in who want to take advantage of our cloud capability to go use an ISV solution and quickly get to market, quickly receive value from that solution.

And for our ISV partners, it provides a way to make sure that when that happens, it’s deployed correctly, it’s configured correctly, and very importantly that it provides those ISVs with access to our sales organization, to our distribution channels, and to our CenturyLink Cloud Marketplace, which means access to our customers. So sort of a win-win in terms of ease of deployment for the ISV, access to our customers for the ISV, and a great way for us to expand the capabilities that we offer to our customers, to our ecosystem.

CP: Would you classify Blueprint as a platform-as-a-service offering?

BL: No, I would differentiate. The best way to think about a Blueprint is a way to very effectively take advantage of our infrastructure-as-a-service capabilities. I’ll just give you a quick example, and then I’ll flip over to platform-as-a-service. We participated as a platinum sponsor at CA World a couple of weeks ago and launched a partnership between CenturyLink and CA that allows CA’s end customers to essentially consume some of CA’s flagship products in an on-demand fashion, soon to be SaaS fashion, on our cloud. So CA transformed, as I spoke about a few minutes ago, from a legacy, on-premises deliverer of software to more of a cloud-delivery model. They selected CenturyLink as the core platform enabler and partner for that technology. So they’ve essentially used our Blueprint capability to take a number of their tools that enable organizations be more effective with software delivery, more effective at Agile development practices and processes, and they’ve used those Blueprints to facilitate quick and easy deployment of some of their products onto our cloud.

So as CA goes out and sells, as we go out and work with customers, if they come across an opportunity where a customer wants quicker time to value, lower cost, to get some of these capabilities up and running faster or to have a monthly model for consuming services, they can go to market with that capability using our Blueprint on our cloud. The way that works from an implementation standpoint, it deploys their assets into out IaaS environment.

If you move sort of up the stack, if you will, there [are] two different ways that we engage or think about platform-as-a-service.

The first is through a partnership with one of our ISV Alliance partners, Pivotal. We’re pretty deeply aligned with the Pivotal-CloudFoundry team in terms of working together to facilitate P-CF running on CenturyLink infrastructure.

We also have …

… a public cloud capability, CenturyLink AppFog. It’s our CloudFoundry-based infrastructure. So there are two different ways, two vehicles to access platform-as-a-service on top of the CloudFoundry capability set on our infrastructure.

We expect this to be a place where there’s significant growth as we get into 2016, 2017. As firms get more comfortable and develop stronger conviction around the move to cloud, PaaS is a very obvious and clear way to go. They jump to cloud native much more quickly and get faster time to productivity, better agility, lower operational cost, lower infrastructure cost, and it really allows software developers to think a lot more about working on the code and a lot less about managing the infrastructure and the overhead associated with it. We think CloudFoundry-based platform-as-a-service, both with Pivotal and with our own AppFog offering, will be quite impactful in the marketplace.

CP: So if a partner is looking to add an ISV practice, what languages do you think are going to be most useful going into 2016?

BL: I’m not sure that the selection of a development language is as important as it was a handful of years ago. I think that the openness in software development really allows development teams to select the best tools and the best language and the best environment for the job at hand, whether somebody wants to develop in PHP or in Node.js or in Ruby, C# — the options there are certainly many and varied, and I think it will continue to be the case.

We don’t take a position on what the best runtime is and what the best language is. Our goal is to enable companies to take advantage of the best technology for the job at hand.

CP:What would you say about application security and the possibility of vulnerabilities in runtime libraries?

BL: Security’s absolutely a critical piece of any decision-making relative to software development, deployment, infrastructure decision-making, and that’s certainly not going to change, particularly when you think about some of the regulatory and policy changes that are happening internationally. Firms have to take a holistic approach to security all the way from the edge of the network to the core of how they develop applications. We at CenturyLink have a variety of services that we offer, from intrusion prevention and detection to DDoS mitigation to subject-matter expertise assessments and various other services to help firms assess and build practices and programs around defense as they build new architectures. I think of our software as core pieces of business transformation.

We also have some more tactical things that we do on a regular basis. One of the ISVs that we recently established a partnership with is Vormetric, which does essentially data encryption at rest, and they do it in a way that allows the end customer to keep the encryption keys. So it provides a great deal of empowerment for the end customer to know that their data is safe and only they have access. Vormetric also “Blueprinted” their capability on our cloud.

We’ve also found that customers are becoming more …

… selective and more thoughtful when deciding when and where to deploy workloads. Companies are making clear decisions about what makes sense to go onto the cloud. Where do I want to keep my data? How can I combine the best of both worlds?

We don’t see firms only trending from hybrid and heterogeneous to all-cloud. We actually see firms deliberately selecting hybrid environments to take advantage of the best-of-breed, having on-prem environment or a highly secure colocation environment for security, then having cloud for compute. I think you’ll continue to see that happen. In fact we’ve seen some ISVs decide to take advantage of cloud to shift what I’ll call “third-party compute” out into the cloud infrastructure to keep it away from their core production systems, to avoid the noisy-neighbor effects and other potential issues.

There’s obviously a wide array of problems you can solve when you’ve got the tools of public cloud and private cloud and colocation all at your fingertips.

CP: I want to quickly get your take on some buzzwords that partners are hearing about and how they apply to solution providers. What are you seeing for DevOps adoption?

BL: Collaboration between developers and IT pros, supported by automation in a way that leads to higher-quality software releases, more frequent software releases, is really the objective that I think anybody in this space would attribute to DevOps. That’s why you adopt a DevOps culture within your organization — to get to those more frequent release cycles, to drive higher quality and to reduce the overhead associated with developers building code and throwing it over the fence to operations. You’ll continue absolutely to see more and more organizations adopt DevOps as a core set of cultural and organizational attributes.

We certainly do that within our CenturyLink cloud development organization. That culture, that set of tools, that way of thinking, of leading project organization has taken hold across all of CenturyLink’s product organizations. You’ll see us continue to adopt that mindset, and that will be a theme across all organizations, industry-wide. Our role in that from an ecosystem point of view is to make sure that we’re bringing to bear the best-of-breed platform and the best-of-breed tool partners on our platform to facilitate that adoption of DevOps.

I mentioned CA few minutes ago. CA’s point of view on the industry is very much one of software is the predominate driver of the global economy going forward, and they’ve taken DevOps very seriously relative to the way they think about their entire toolset. We believe our partnership with CA and companies like it allows us to take to market a set of tools on our cloud platform and infrastructure to enable partners to more quickly and easily take advantage of DevOps.

Think about the Blueprints concept I mentioned a few minutes ago. CenturyLink Cloud Blueprints enables our own cloud development organization to be more agile in the way that we develop, configure and deploy our releases. So the engine underneath Blueprints is what …

… our own development organization uses to orchestrate, configure and deploy our releases, and we’ve essentially bottled that up and taken it to market to facilitate that same level of agility for our alliance partners in the ISV space.

CP:Always good when a company is drinking its own champagne. Another thing we hear a lot about is APIs. What are your suggestions for solution providers to take advantage of APIs now?

BL: There [are] a couple of points I think that are important on APIs. The first is the way that CenturyLink thinks about our portfolio of services and where we’re headed over time. The broad goal of CenturyLink across the network and data center and hosting and cloud is to bring as much of the benefits of cloud to our end customers across every single piece of product and capability that we offer. The attributes that are most interesting for cloud are programmability — so, the ability to access those capabilities through APIs; the ability to take advantage of those capabilities through self-service; the ability to essentially leverage consumption economics to buy only what you need when you need it; and then automation.

There’s certainly a broader set than that, but you think about programmability, you think about self-service, you think about automation, you think about consumption economics, other typically high-value attributes of cloud — we’re trying to bring them across our entire platform. So you’ll see programmability and API access at the core of everything we do, and we believe this is certainly a trend in the industry as well. So if you’re an ISV building applications, if you’re an industrial equipment manufacturer trying to transform your business and take advantage of software, the first thing you should be thinking about are: What do I expose externally through APIs to allow others to integrate with my assets in an effective and agile way?

It’s critical from a core DevOps and software release agility standpoint. It’s also core for the ability to build and cultivate ecosystems of your own, and certainly important as a mechanism to drive more value to end customers.

CP:Would you call out your top two or three SaaS trends for 2016?

BL: If you’re a SaaS provider today – as a firm, you’ve adopted software-as-a-service, you’re relatively mature on your journey to cloud – there [are] a couple of things that are going to be prominent. The first is continued focus on efficiency, essentially cost control; the shift of infrastructure spend from the end customer to the ISV in the SaaS environment is material. It changes the economics of that software company’s business. You’ll continue to see ISVs who’ve adopted the cloud do everything they can to make sure they’re driving down that cost of infrastructure to be the most efficient organizations they possibly can be. We certainly intend to be a core enabler of that cost reduction.

I think the second thing that you’ll continue to see that is super-important to SaaS providers and customers is …

… the focus on reducing time to value. Anything that a SaaS provider can do to, upon initial acquisition, get that capability rolled out to as many users as possible within the customer’s environment, and then very importantly, shift to a model where releases are frequent. So certainly moving away from annual releases or releases every six months and getting into a model very similar to what we do with the CenturyLink Cloud. You have a release every 21, 28 days, and you get that capability and that value into the customer’s hands as quickly as possible. DevOps plays a role in that, as does platform.

I think the third thing that you’ll see for SaaS providers is the importance of continuing to build out and invest in their own ecosystems.

I met with an ISV yesterday in the content management space, focused on the management of contracts, so essentially selling to the general counsel and sales operations leaders within companies. One of their core go-to-markets is to enable Salesforce end customers to take advantage of their contract management capability. So great value if you’re a Salesforce customer, you have another capability that integrates directly with the toolset that you already use, good access to a broad customer base for this small company because Salesforce obviously has good momentum in the marketplace, and good value for Salesforce to round out their solutions. I think you’ll see that be pretty consistent.

If you’re not a SaaS provider, I think you’ll still see focus on time to value and lower cost of ownership, but what you’ll see over the course of the next one, two, and three years is I think a little bit faster pace of movement to the cloud — not necessarily because the software companies themselves decided, “Hey, now’s the time I have to do it,” but because their customers are demanding the agility, they’re demanding the flexibility, they’re demanding consumption economics.

If you’re a legacy software provider that has not yet moved to the cloud, there will be new upstarts born in the cloud, companies that are moving into your space aggressively, so to some degree it’s taking advantage of the cloud to deliver that value to customer or risk being disrupted or displaced. I think you’ll see the energy toward the journey to SaaS and SaaS maturity model really take an aggressive pace in 2016.

CP: I remember when virtualization was getting big, and that was a question we always asked if we were looking at software: Will it run on a virtual machine? And you had vendors saying, “Oh, no, no, we’re not going to do that.” It’s kind of amazing that any software provider today would feel like it could get away with not running in a cloud environment.

BL: What we hear frequently from ISVs is, “We know we have to get there. We’ve yet to figure out the most efficient path to make that move.”

And it’s a heavy lift. It’s not just, “How do I take advantage of cloud from a …

… technology platform standpoint? How do I redesign my architecture to make it multitenant?” It’s a fundamental business rearchitecture as well. “How do I change from a license and maintenance business model to the one that is it subscription-based, monthly per user, per hour, in some cases?” That has implications from the board down to the C-suite all the way to the go-to-market application development organization. The need to think about it as a company transformation as opposed to an application transformation is the key as we get into in 2016, to see the pace pick up at the level that it needs to.

CP:It does not seem that the licensing maintenance switchover has kept pace with the way companies have been changing their spend from capex to opex.

BL: Right. I think the technology leaders within many of these organizations get it. It’s always harder to change a business model than it is to change a technology model, and I think the forcing function of customer demand and then upstart competition will make that less of a choice and more of a mandate.

CP:Anything else I haven’t asked you about? Any success stories you wanted to share?

BL:As we look forward into 2016, CenturyLink is extremely committed to the entire platform that we’ve put in place and all the assets that we’ve assembled across it. We’re committed to access to cloud connectivity, and we feel that our hybrid offering differentiates us and differentiates our ability to help our IT partners be successful. You’ll see that commitment continue top down and throughout our product organizations and our channel teams over the coming years.

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