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Bull, FastConnect and Big Data in the Cloud



Source: Enterprise CIO Forum
Source: Enterprise CIO Forum
Over the last few years, Bull has progressively reinvented itself as a medium sized ICT player, focused on a limited number of market niches where it has the expertise and resources to be successful.

The company is now recognized as the European leader in High Performance Computing (HPC) super-computers, an “innovation intensive” niche market, and has leveraged this expertise to develop X86 “scale up” Bullion servers for mainstream business applications requiring extremely high levels of performance.

In systems integration, the company has achieved strong results in some selected segments, especially where it has gone to market with “cross business line” offerings, leveraging skills in “critical” systems, security, technology integration and of course Cloud computing.

“Le Cloud by Bull” is a key element of this services-led, cross business line approach.

While “Le Cloud by Bull” has been mostly focused on private Cloud infrastructure, the recent acquisition by Bull of FastConnect has added some new, higher level capabilities – including in particular "Cloud Enablement" and Big Data application skills – to Bull’s value proposition.

The Facts

On September 30, 2013, Bull announced the finalization of its acquisition of FastConnect, a 120 person French integrator specialising in SOA-based distributed architectures, Cloud migrations, Big Data and analytics.

FastConnect will become part of Bull's Business Integration Solutions Business Line and will be the focal point for the creation of a center of expertise for Cloud applications and Big Data projects.

According to Thierry Siouffi, Executive Vice-President of Bull's Business Integration Solutions Business Line. "The acquisition of FastConnect will mean we are one of the few players able to offer a fully integrated Cloud offering, from infrastructures to applications."

Financial conditions were not disclosed.

Analysis

As a preliminary, one could wonder about the reason for the sale of an innovative company like FastConnect, which has been doing well in several “hot” technology markets and has achieved a healthy annual overall growth rate of around 20%. While some financial indicators such as the income/sales ratio and sales/headcount declined in 2012, this is not surprising given the economic context and the company’s rapid revenue growth.

It may well be that FastConnect needed a stronger financial backup than its previous shareholder, for whatever reason, was unable to provide. In tough economic times, well-positioned young companies with a clever, market-relevant offering can find it difficult to sustain their growth, making market success a threat in itself as their financing needs exceed their capability to mobilize funds. Being acquired can be a sound way to address the issue and continue their business development, provided the acquiring party handles the transition correctly.

Bull HPC and Big Data in the Cloud

Taking a more strategic perspective, despite the modest size of the operation, the acquisition does shed interesting light on how a medium sized, multi-niche ICT player like Bull may be able to achieve some degree of real differentiation in Big Data and the Cloud as well as scaling up its delivery capabilities for customer projects.

Bull is widely recognized as a leader in High Performance Computing (HPC), with solid skills that have relatively direct applicability for Big Data (e.g., scale up and out architectures, advanced file systems (Lustre, etc…).

Being by nature on the edge of technological innovations, the relatively small HPC segment has often fostered solutions that later found their way into larger, more conventional ICT markets (e.g. server clusters or fast internetworking such as InfiniBand, to just name a few). The recent evolution of HPC towards standardised components (e.g. Intel processors, grid computing on standard PCs, or innovative, standard-component based storage architectures) only enables a faster transfer of such innovations to mainstream ICT markets.

Bull’s mastery of these innovative technologies is an important asset that can be leveraged into broader segments with greater potential, including in particular Big Data, due to its relatively close “technological proximity” with HPC.

An example on the Enterprise Server side is Bull’s recent announcement, in collaboration with Pivotal, of Bullion Fast Data Analytics. As noted earlier, the design of the Bullion range for the business market leveraged the company’s know how in HPC supercomputers.

The demonstrated experience of the FastConnect teams in Big Data application projects fits perfectly into this “segment hop” strategy, especially in the context of a “cross business line” approach to the market.

Cloud Enablement

For a medium sized ICT player like Bull, achieving differentiation in the Cloud is no small challenge. “Le Cloud by Bull” is a services-led, cross business line approach that has been mostly focused on private Cloud IaaS (Infrastructure as a Service). In the public cloud market, where scale effects are critical, Bull has positioned itself as a value-added reseller for Numergy (in which it is also a shareholder) with the announcement of a well structured set of IaaS Management Services.

The FastConnect acquisition – despite its modest size - could bring some additional, synergistic capabilities in terms of “Cloud Enablement” to Bull’s value proposition. Understood broadly, Cloud Enablement covers services for both application and organizational enablement.

Application cloud enablement addresses the question of creating or moving applications to cloud environments, as well as managing them in these environments. This is a critical market for many players because these capabilities are key to selling private cloud solutions or public cloud IaaS, notably via application development or application workload migration. Enablement for operation, monitoring, and management of cloud workloads is another crucial element with a big impact on the total cost of the solution– even though it is often neglected at the initial stages of a project.

Organisational cloud enablement deals with the adaptations needed to achieve the full benefits of the cloud model. This category of services goes beyond application enablement by addressing organisational issues, first at the IT level (not just new tools but also innovative methodological models such as DevOps), and even across the business, as cloud computing opens opportunities to evolve business models and customer engagement.

Assuming proper execution, the blending of the capabilities that Bull and FastConnect bring to the table can allow the combined teams to better address both domains of cloud enablement. According to Bull, the two companies (who know each other well) share a common vision that moving to the cloud involves both a bottom-up (infrastructure-led) approach as well as a top-down (application-led) approach.

In particular, FastConnect has strong integration skills around Cloudify (from GigaSpaces), a PaaS technology stack providing for both cloud enablement of existing applications and for new, cloud-native application development. Cloudify also fits well into DevOps environments, notably integrating with leading solutions such as Opscode Chef. In addition, FastConnect has solid skills in “scale out” distributed architectures that are fundamental in cloud environments as well as a “cloud native” mindset.


Scaling up delivery capabilities

However, to exploit its technology know-how, Bull probably lacked enough expert personnel to implement Big Data application projects and needed to integrate them relatively quickly. The issue with “Cloud enablement” and migration services for core business applications is similar.

Generally speaking, medium sized ICT players often lack these sorts of skills, at least in sufficient numbers. The FastConnect acquisition has the clear merit of being an immediate, albeit partial, answer to Bull’s potential Cloud and Big Data HR resources problem.

Bull’s M&A move can be compared to Tata Consultancy Services (France) recently acquiring Alti to gain skilled personnel and capabilities on SAP and BI in France. In all IT services markets, the players need strong customer proximity and well qualified human resources. Fast-growing offshorers that traditionally had limited local resources but now want to organize a high performance delivery organisation are confronting this issue; more locally-based, established players that went through multiple personnel-reduction plans over the recent years have a similar problem.

Looking forward, in domains such as the Cloud, Big Data, mobility and social networks, one can reasonably expect that more new companies will continue to emerge, adapting faster than larger players to a fast changing market, and that M&A operations will be more and more frequent.

In the fast growing Cloud universe, however, all significant players are confronted with an HR skills issue, and the sole solution is to rely on an ecosystem of partners. Targeting a segment such as Big Data, which is considerably larger than the HPC niche market, only makes this “eco-system imperative” more compelling. There is fierce competition to build such ecosystems between the largest players such as IBM, Microsoft, Oracle or VMware and Amazon Web Services. Clearly, one of Bull’s next challenges, as a medium sized regional player, will be the constitution of its ecosystem (interestingly, by acquiring FastConnect it has swallowed an IBM partner…).

Big Data, including Big Data in the Cloud, is seen as a promising growth market by a number of larger players. The same challenges will be presented to Bull in all Cloud markets. The company will need to choose and carve its own niche(s) in these markets, offer a differentiated value proposition and scale up its delivery capabilities. If the opportunities arrive, targeted M&A operations such as the FastConnect acquisition can help, but building the right partner ecosystem is vital.

Conclusion

With the acquisition of FastConnect, Bull confirms its well-justified intention to leverage its technological capabilities as well as its extensive experience in HPC into the much larger emerging markets of Cloud and Big Data applications. While this acquisition is a small operation, it can help the company build a differentiated value proposition and will clearly improve Bull’s “delivery capability” in these markets, especially in France. Bull’s strategy to “hop” from the HPC niche to the larger Big Data and analytics business, especially in the Cloud, is sound and well-thought, but still presents some substantial challenges.

Monday, October 21st 2013
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Duquesne Advisory is a European firm, dedicated to researching, understanding and advising clients worldwide on opportunities and trends in Information and Communications technology.

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Duquesne Advisory delivers in-depth analyses of Information and Communications Technologies, their implementations and their markets. Research is based on critical observation of the market by the analysts and their on-going contacts with the vendor community, together with hands-on, practical experience in consulting engagements.

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