Digital Transformation Digest, 6/28/17: Salesforce Courts Developers, Cisco Revs Up IoT, Google and Nutanix Tie Up on Hybrid Cloud

Chris Kanaracus

Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Welcome to Digital Transformation Digest, Constellation's daily compendium of news and analysis covering forward-thinking enterprises, mega-vendors, startups and developers.

Salesforce adds AI platform services for developers, opens up DX in beta: The CRM giant has made a steady stream of announcements in recent months around its AI technology, Einstein, which is the product of a string of acquisitions and organic development. In the latest, Salesforce has unveiled new Einstein platform services for its developer base.

The services include Einstein Sentiment, for analyzing the tone of text generated by social media, web reviews and other mediums; Einstein Intent, which provides machine learning models that can classify the intent of inbound customer messages and route them appropriately; and Einstein Object Detection, for analyzing the content of images. Salesforce sees the last as ideal for retail, service and inventory management scenarios.

Go here for a deeper dive into the new services, with analysis from Constellation Research VP and principal analyst Doug Henschen.

Salesforce has also announced an open beta for DX, its new developer environment, which was first announced at last year's Dreamforce.

POV: Salesforce is betting big on expanding its already large developer base in a bid for growth. It has rolled out an extensive online training program called Trailhead, which is aimed at both those aspiring to be full-time Salesforce professionals, as well as "citizen" developers. The latter could be just as important for Salesforce's prospects given the potential for adding stickiness to its products within companies large and small.

The news is all happening in conjunction with TrailheaDX, Salesforce's second annual developer conference. Constellation Research VP and principal analyst Holger Mueller will be in attendance, so look for his coverage on his Twitter feed, Constellation's website and his blog this week.

Cisco ups its IoT ante post-Jasper acquisition: Last year's $1.4 billion purchase of IoT connectivity platform Jasper seemed like a shrewd move for Cisco, as it picked up one of the most mature and widely-used products of its kind.

Jasper was founded in 2004 and at the time of the acquisition, it already had 3,500 enterprise customers. (It now has 11,000, in a testament to Cisco's much larger channel and sales capability.) And on paper, the technical fit was sterling, with the combination of Cisco's networking gear and Jasper's software.

While there have been some incremental announcements since the deal, the big news arrived this week in the form of Control Center 7.0, which ties an array of Cisco technologies into Jasper's platform. You can go here for all the details, courtesy of Cisco.

POV: "It took some time from the acquisition of Jasper, but now we see the benefits in Cisco Control Center 7.0," says Constellation Research VP and principal analyst Andy Mulholland. "It's a combination of network topology types combined with the management experience of both Cisco and Jasper. As an example of the art of the possible in IoT connectivity spanning network types, it's well worth taking a close look."

Google teams with Nutanix for hybrid cloud: Google—technically, its parent company Alphabet—has inked a pact with hyperconvergence vendor Nutanix for hybrid cloud scenarios. Nutanix offers hardware and software for running mission-critical applications on private clouds, while providing connectivity to public cloud services for other workloads.

The integration is set to be complete in the first quarter of 2018. It will enable applications to be wrapped in Kubernetes-based containers and moved back and forth between Nutanix hardware and Google's cloud.

POV: This is certainly a big deal for Nutanix but also an acknowledgment by Google that hybrid cloud is what many enterprises want or require. Nutanix has strong credibility in its own right, with an enviable customer list using its products to build hybrid cloud datacenters.

Legacy Watch: Looming deadline for Office 2007 support: Companies and individuals still using Office 2007 have just three more months of support before Microsoft pulls the plug, as Computerworld reports. While they have the option of upgrading to a newer version of Office, such as 2013 or even 2016, Microsoft is pushing hard on the idea of jumping straight to the cloud-based Office365 or Office365 Plus, the fat-client version.

POV: It's not clear how many copies of Office 2007 are still chugging away out there, but we can be sure it's far more than one. Office365 has developed a rich feature set and is certainly worth a close look. For its part, Microsoft has a detailed end-of-life guide for Office 2007 at this link. (It also doubles as a passive but persistent product pitch for Office365).

SugarCRM Unveils Hint, for 'Relationship Intelligence'

Chris Kanaracus

Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Cindy Zhou

CMO
Level Access

Cindy Zhou is a practicing CMO.  Prviously, she was Vice President and Principal Analyst at Constellation Research covering Digital Marketing Transformation and Sales Effectiveness. With over 18 years of practitioner experience in corporate marketing, product marketing, product management, and sales operations, Zhou has spearheaded marketing transformation at multiple technology companies. She advised Constellation’s clients on strategies to light-up demand generation, prove revenue contribution, and maximize sales productivity. Prior to joining Constellation, Zhou was Global Senior Vice President of Marketing and Sales Operations at BackOffice Associates, a global provider of data quality and information governance solutions to the Fortune 1000 and SAP SolEx partner. Before…...

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SugarCRM has firmed up its AI story with the launch of Hint, the first service from its new Relationship Intelligence product family. Hint is all about automating the task of collecting and organizing information about individual customers, as SugarCRM explains in a press release:

SugarCRM Hint reinvents enterprise applications by enabling end users to provide only a few contact details (e.g. email, name, company) for an individual and then automatically searches, tunes, and inputs the rest of the personal and corporate profile details for that contact. Hint does the work for Sugar users by gathering and analyzing customer intelligence from a broad range of social data sources so users can quickly and efficiently learn more about their prospects to establish a productive relationship.

Hint builds upon last year's acquisition of Contastic, a natural-language processing startup. It is compatible with Sugar versions 7.8 or higher and priced at $15 per user per month.

Hint represents a first step in a longer journey for SugarCRM, as the company notes in the release:

Future SugarCRM Relationship Intelligence products will rely on predictive analytics and machine learning techniques. These analysis techniques evaluate large data sets to reveal insightful patterns, prioritize opportunities, identify issues and make intelligent recommendations for next best actions in customer interactions and processes.

For what it is, Hint serves an increasingly important need, says Constellation Research VP and principal analyst Cindy Zhou. "Companies have been turning to third-party data solutions to append the missing information for both companies and their related contacts," he says. Having more complete information on the company, the decision-makers and contacts will help sellers improve their engagement with customers and prospects."

But Zhou advises clients to assess the fit and understand the depth and breadth of contacts Hint can provide. "Is there specialization in their particular target markets, industries or contact roles?"

POV: SugarCRM has chugged along over the years, despite remaining in the shadow of high-profile CRM vendors such as Salesforce and Oracle. It has differentiated itself with aggressive pricing-to-feature ratios, and the ability to run both in the cloud and on-premises.

With Hint and the upcoming Relationship Intelligence products, SugarCRM has made an initial entry into AI. While it doesn't have pockets as deep as larger competitors, SugarCRM is smartly focusing its initial AI efforts on core sales CRM capabilities—its sweet spot—compared to Salesforce's aggressive push to drive AI across every module.

DNS Up-and-Comer Cloudflare Launches App Platform

Chris Kanaracus

Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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DNS service provider Cloudflare is getting serious about apps. The company has announced the Cloudfare Apps Platform as well as a $100 million fund that will distribute venture capital to startups that build apps on the platform. 

Founded in 2011, Cloudfare has now built out a network that spans 115 cities around the world, serving six million websites. Prominent customers include Uber and Fitbit. Cloudfare also offers CDN (content delivery network) services, firewalls and DDoS (distributed denial of service) protection. 

Cloudflare App Platform is a natural evolution of the business, CEO Matthew Prince wrote in a blog post:

Prior to today, if you wanted to write code that took full advantage of Cloudflare's global network you needed to be a Cloudflare employee. Our team is able to run code on thousands of servers in hundreds of locations around the world and modify our customers' packets as they flow through our network in order to make their web site, application, or API faster and more secure. Today, we open that access to the rest of the world.

The Apps Platform allows third parties to develop applications that can be delivered across Cloudflare's edge to any of our millions of customers. 

Cloudflare sits in a unique place. Our customers' packets flow through our network before reaching origin servers and in the way back to clients. That enables us to filter out bad actors, introduce new compression, change protocols, and modify and inject content. The Cloudflare Apps Platform enables developers to do the same, and produce applications that help build a better Internet.

Meanwhile, the developer fund is being backed by Venrock, Pelion and NEA, which were early investors in Cloudfare:

Building Cloudflare was a community effort. We can't wait to see what developers build now that we've opened Cloudflare's infrastructure and access to investors to a greater audience.

The App Platform stems from Cloudflare's purchase of Eager last year. Despite its name, the platform doesn't offer a full set of developer tools. Rather, it provides a way for third-party developers to wrap their JavaScript and CSS-based applications in an install.JSON file. Cloudflare's platform abstracts away complexity for website customers, allowing non-technical users to use a simple interface to configure and install apps on their sites. 

Eager's technology replaces an earlier app platform Cloudflare had built on its own. The company's app marketplace has about 50 applications so far but clearly the goal is to have many, many more. Like other stores, Cloudflare will take a piece of developers' revenue, in this case 30 percent.

POV: Surprisingly rich applications can be built with JavaScript and CSS, but you can expect the variety of applications that populate Cloudflare's store to include a fair amount of widgets, too, albeit useful ones, particularly for small and medium-sized businesses or department-level websites who want to add features quickly without engaging IT. Like any, the marketplace and platform's success will depend on developer and customer awareness, but Cloudflare's overall momentum, along with the $100 million fund, should ensure a fair amount of both.

Cisco Live 2017: Key Takeaways from CEO Chuck Robbins' Keynote

Chris Kanaracus

Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Cisco kicked off this year's Live conference with a keynote from its CEO Chuck Robbins, who walked attendees through recent and upcoming news announcements while laying out the company's vision for next-generation networks. Here's a look at the key takeaways from Robbins' talk.

The new networking realities: In 2016, the world hit an inflection point as the number of machine-to-machine network activations exceeded those of phones and tablets, Robbins said. Enterprises are already using billions of connected devices for new business models, preventive maintenance and other pursuits, and the pace by which more and more devices will be connected to the Internet is set to increase dramatically, he added.

Three things will define networks going forward: Scale, simplification and security, Robbins said. Of the last, he noted: "We all know what's in the press and as we add more and more things the threat surface expands. Once a month, something major happens. We have to ensure we're building security into everything we do."

Last week, announced major updates across its Digital Network Architecture product family. These include DNA Center, a management dashboard for all network functions; Software-Defined Access, which automatically segments network traffic through policy enforcement; and a machine learning platform for predictive analytics and business intelligence.

There's also new traffic analytics that can accurately detect threats in encrypted traffic more than 99 percent of the time, without needing to decrypt the data.

Robbins also discussed a new family of switches, the Catalyst 9000 line, which he called a "beautiful box." The switches include new custom-built ASICs and are fully programmable, allowing, for example, a hospital bringing on IoT devices carrying patient data to separate that traffic from desktop networks. It's also possible to run applications in containers or VMs directly on the boxes.

To that end, "what we believe is the network has to provide you the ability not only to connect but to deal with the data at the edge," Robbins said. 

Seventy-five large companies are already conducting field trials with the new software and hardware, according to Robbins. The various aspects of the portfolio will become available over the next several months, Cisco said.

POV: Robbins kept the product pitches fairly short and free of bombast, which is always welcome. He also did a good job of speaking directly to the thousands of Cisco administrators and architects present at Mandalay Bay, highlighting the importance of their roles and responsibilites in the IoT age. 

The multi-cloud reality: Cisco, like others, tried but failed to make inroads in the public cloud market and ultimately shuttered its Intercloud service in March. Thus it was not surprising that the cloud portion of Robbins' talk discussed Cisco's new strategy, where it will support multi-cloud management. 

Cloud computing began as a quest for simplicity in enterprise IT but with companies buying into a proliferation of SaaS, PaaS and IaaS offerings now has become a problem of data control and security.

"This is a major challenge we have to solve," he said. "It's not going to the cloud, it's going to many, many clouds. And the network has a unique ability to help you navigate that by preserving your policy and your security."

POV: Constellation believes multi-cloud is the right direction for most customers. Cisco, however, is far from the only vendor trying to pivot into multi-cloud management and will have to find the right place in the market. 

Apple, Cisco cozy up a bit more: Robbins invited a surprise guest onstage in the form of Apple CEO Tim Cook. Their conversation consisted mostly of generalites about the companies' partnership, which big boost two years ago with the announcement of an enterprise-oriented "fast lane" service for validating iOS devices on Cisco networking gear. 

Cisco and Apple didn't have anything nearly as big to announce during Robbins' talk, but Cisco did unveil Security Connector, which takes functionality from its Umbrella and Clarity security products and combines it in one app. It provides features for incident investigation, blocking malicious sites and encrypting DNS requests, and can be used to manage iOS devices in conjunction with an mobile device management platform.

POV: While the fireworks weren't really there this year news-announcement-wise, Cook's appearance is some evidence the Cisco-Apple partnership has been a success. (Cook said as much, but neither he or Robbins talked numbers.) In any case, the deal always made sense for both companies on paper, with Apple gaining an inroad to enterprises through Cisco's channel and Cisco able to pitch its networking products as superior for iOS devices. 

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IBM Launches Microservice Builder for Next-Gen Application Development

Chris Kanaracus

Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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IBM has brought together a number of developer tools into a platform for building, deploying and managing microservices in both on-premises and cloud environments. 

In a microservices architecture, an application is represented as a suite of smaller services, usually running in containers, which can be swapped in and out or ugraded as warranted. The microservices approach favors continuous delivery, easier testing, and incremental new features created as business needs arise. IBM is hoping its new Builder service will have appeal for enterprise IT shops looking for more of a turnkey way to create microservices:

Microservice Builder helps developers with each step of the development process from writing and testing code, to deploying and updating new features. It helps create and standardize common functions, such as runtimes, resiliency testing, configuration and security, so developers do not have to handle these tasks separately. Teams can also build with specific policies and protocols to ensure all services work together as a complete solution.

For example, a retailer developing a new inventory management app could use Microservice Builder to create a microservice that connects into inventory data to monitor availability of products. A second microservice could be built for a user interface to access inventory information from mobile devices, and a third could be built to analyze shopping trends based on inventory movement. Microservice Builder could help ensure all microservices work together when deployed, regardless of which developer on the team created them.

Microservice Builder uses Kubernetes for container orchestration, as well as Istio, an open source project for microservices management developed by IBM, Lyft and Google. (It's worth noting that IBM says it "plans to deepen the integration" between Istio and Microservices Builder over time, meaning this piece of the pie isn't fully baked yet.)

Other aspects of Microservice Builder includes support for MicroProfile, a programming model which optimizes Java EE for microservices, and security via OpenID Connect and JSON Web Token. IBM is offering a developer edition at no charge. Pricing for test and production versions wasn't available.

In any case, IBM is tapping into an important area at the right time, says Constellation Research VP and principal analyst Holger Mueller. 

"Despite all the hype around microservice and their inherent advantages to build next-generation applications, their uptake isn't on the fast lane," he says. "Custom software gets rebuilt at an average clip of 10 years, assuming it worked successfully. From those projects, almost all enterprises take a look at microservices, but only one third take really advantage of them." 

That's because of uncertainty, unfamiliarity and risk-aversion on the part of enterprises, he adds. "Making it easier to create, maintain and implement microservices is the right strategy to increase that adoption, and that's what IBM is doing," Mueller says. 

Big Blue is not the only option for microservices development platforms, as a cottage industry of startups has sprung up around the trend. These include Macaw, Vamp and Nanoscale. However, IBM's resources and vast account penetration in enterprises globally will certainly give Microservice Builder a foot in the door.

Unpacking Oracle's Q4 Results: Turning the Cloud Revenue Corner

Chris Kanaracus

Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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There are few better ways to take the measure of enterprise software buyers' moods than by examining Oracle's fourth-quarter results, which were released this week. Q4 is always Oracle's biggest quarter of the year, and all eyes were on what numbers it would post for cloud revenue.

Put simply, it was a blowout, with cloud revenue up 58 percent year-over-year to $1.4 billion. Within that total, SaaS was up 67 percent to $964 million while PaaS and IaaS revenues, which Oracle is now counting together, were $397 million. For the full year, cloud revenue rose 60 percent to $4.6 billion. 

The results shot Oracle's stock up dramatically, lifted its market capitalization to north of $200 billion, and had executives in a even more positive mood than usual during the earnings conference call. Here are some of the key takeaways from the call and quarter. 

In the margins: Oracle's gross margin for SaaS in the quarter was 65 percent, up from 54 percent last year. The company hopes to reach gross margins of 80 percent on SaaS over time. Meanwhile, the gross margin for PaaS and IaaS fell to 47 percent from 54 percent, an outcome Oracle attributes to investments in data center buildouts. 

On-premises stability: While on-premises software revenue was flat at $7.5 billion, new software license sales fell 4 percent to $2.6 billion. Oracle made up the difference with a 3 percent rise in maintenance revenue, which was $4.9 billion. That result reflects "high attach and renewal rates" on support contracts, Oracle said—but it could also partly reflect revenue gained through license audit activities. Maintenance remains a highly profitable venture for Oracle—and all software vendors, for that matter—and the company is keen to preserve it as much as possible, even as more customers buy into cloud.

Chasing Salesforce: Oracle is going to surpass Salesforce as the number one SaaS vendor, CTO and executive chairman Larry Ellison said on the call. That's because it has a more diverse SaaS portolio, Ellison added:

The reason we are confident that we will pass Salesforce is because we have a three-fold SaaS application suites for ERP, for HCM and for CRM including financials, procurement, supply chain, manufacturing, human resources, payroll, marketing, sales and service. Salesforce in contrast only competes in three of these nine market areas.

It's not always clear how customers benefit from this sort of chest-thumping, but if the competition continues to heat up between Salesforce and Oracle, they could win out through better pricing and bundling options, as well as heightened innovation. Time will tell.

Cloud ERP crushing it: Oracle's cloud ERP revenue was up 156 percent in the quarter, a figure that does not include sales from NetSuite, CEO Mark Hurd said. (Netsuite is being positioned as Oracle's SMB option for cloud ERP, while its Fusion suite is aimed at large enterprises.)

Oracle picked up 868 cloud ERP customers in the quarter. Among others, Oracle struck cloud ERP deals with Allianz, BNP Paribas, GE, the Kraft Heinz Corporation, Juniper, MetLife, Minerals Technology, Motorola, NCR, Netflix, Newell Rubbermaid, Orange, Pearson, Sinclair Broadcast Group, Textron, the University of Maryland, Vanderbilt University and Volkswagen, he added.

More tellingly, two-thirds of cloud ERP customers in the quarter had never purchased an Oracle ERP system before, Hurd said. That suggests Oracle has assembled a strong sales organization, is successfully raising awareness outside its installed base, and most importantly is able to put viable cloud ERP solutions in front of a diverse set of companies and organizations.

Sales switchup: Hurd responded to recent reports that Oracle was planning significant layoffs in its sales force once the quarter closed. (See the Register's report here.) He denied the idea of layoffs, while acknowledging Oracle has been making some changes:

This is all just not true. So, is our sales force shrinking? No. Do we change things in our sales force? Sure. Is there any major reorg going on? No. But remember, our competitors change. We have some very simple principles how we run the sales force. We lineup our sales force by product. We line them up by buyer and by competitor. And that market tends – those dynamics can change or competitors change we have noted over the past several years. .. Second, we are building out, as we have told you over the past couple of years, big hubs that are doing a lot of our selling. And so we have the byproduct of that is that our sales force is actually increasing in numbers, but our cost per salesperson is actually declining. 

Cranking up the Cloud Machine: In May, Oracle announced an agreement with longtime customer AT&T that will, among other things, see the telco migrate thousands of its internal databases to Oracle's IaaS and PaaS. While the press release issued at the time suggested AT&T would use Oracle's public cloud, on the call Hurd revealed that the agreement will involve Oracle's Cloud Machine appliance, which replicates its PaaS and IaaS inside a customer's own data center:

[T]hey have several hundred large databases that have 70%, 75% of all of their company’s data. They have badly wanted to get the benefits of cloud, provisioning, a lot of provisioning and all the new features that come with product modernization, consolidation of that infrastructure, yet in many cases they have got regulatory pressures on what they can put in the public cloud and what they can’t. ... we take our Oracle cloud machine and we are able now to do all of that with them on their premise and give them all the benefits of the cloud, we manage, we patch, we basically run the cloud for them.

Oracle sold more 100 Cloud Machines in the quarter, and wants to ultimately deliver them to tens of thousands of customers. Hurd didn't provide any context for the quarter's results on Cloud Machine, which was launched in March 2016, such as the percentage increase or decrease in unit sales. Constellation believes that while data sovereignty and regulatory guidelines remain strong drivers for private cloud, Cloud Machine may remain of interest mostly to all-in Red Stack shops for some time to come.

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