Services, Reliability Key As Cloud Gold Rush Accelerates

The cloud is front and center in the IT – and business – world, and big and small, new and old vendors are scrambling to stake out their share of the explosively expanding private, public and hybrid cloud markets. The cloud market has reached an inflection point between vendor solutions and customer demand, according to Technology Business Research, who states the market is set to grow well beyond the $83 billion in opportunity in public cloud services. More than 30% of customers have adopted private cloud solutions and 15% have made the transition to hybrid environments, and the addition of professional services to public, private and hybrid offerings will result in more than $100 billion in opportunity for vendors by 2015, stated the research company.

There are a lot of companies competing in this space, with new ones emerging every day, but the consolidation is already starting, said TBR’s Lindy Hanson, Director of the Professional Services Practice. She said it will be a repetition of what we’ve seen before in the industry, “a shift of outsourcing to best of breed, then back to one throat to choke,” as customers look for vendors who can provide the critical management level. “Going back in time, that’s something the IBM, HP/EDS are very good at.”

It seems like everybody wants a chunk of the cloud market. Last week IBM rolled out SmartCloud Entry 3.1, a ‘full-blown, full-featured, highly scalable’ private cloud solution that takes the ‘sting out of cloud adoption both in complexity and in affordability’.

A few days earlier HP addressed DevOps, one of cloud’s pain points, with what it called the next generation of data center automation, orchestration and cloud management software. Customers have been struggling with agility and scale when it comes to the cloud, said Manoj Raisinghani, Senior Director, WW Product Marketing, Cloud Automation Software and SaaS, HP Software. They’re asking for faster application development and the ability to respond more quickly, but they also want to minimize the amount of new expertise required, and keep costs the same, he said.

Cloud is apparently behind Microsoft’s revival as the desktop/server software giant ‘has turned to the Web, especially for businesses, as the way to leverage its $70 billion software franchise into the so-called cloud-computing era.’ By shifting core business utilities like Exchange and Office to the cloud, along with enterprise software such as Dynamics CRM for managing sales and marketing, Microsoft could “unlock an incremental $13 billion to $24 billion in annual revenue and 31 cents to 82 cents” in per-share earnings over three years, said Mark Moerdler of Bernstein Research.

Best known for its [a la carte] approach to providing cloud services, Amazon Web Services (AWS) is turning to partners to woo big-spending corporate customers who shell out more than $300 billion annually just on data centers. “Businesses want a full dish to eat, while Amazon serves up ingredients and asks users to get cooking,” said Matt McIlwain, a partner at Madrona Venture Group. “Enterprises are willing to pay to get the completed dish. Amazon recognizes this. That’s why they have created a network of partners.”

At its I/O developer’s conference last week, Google opened its Cloud Platform Compute Engine to all comers. To better compete with the kingpin of that space, AWS, Google has bolstered its platform with new features, updated its App Engine hosting service, and launched Google Cloud Datastore to go up against AWS’ cloud storage services.

Then there’s the do-it-yourself model companies like Wal-Mart are using. Last week its Silicon Valley innovation lab @WalmartLabs, snapped up two startups: cloud computing newcomer OneOps and the software development shop Tasty Labs. OneOps developed a Platform-as-a-Service (PaaS) capability that Wal-Mart explains will enable it to “significantly accelerate” its PaaS and Private Cloud Infrastructure-as-a-Service (IaaS) strategies. Tasty Labs staff will join Wal-Mart’s Product and Mobile teams in an effort to build out the company’s e-commerce platform. It’s best known for, a “marketplace for needs” — meaning users would post “I need…” and others would respond to help them, and, a way to “build tiny little microapps and distribute them to a mobile client.”

Whichever approach/es – or vendor/s – you select, the “secret sauce is how do you do more of this without people,” said Hanson. It’s about automation, cloud orchestration, and tying all the pieces together.

Another challenge is shadow IT, she said, end-users purchasing cloud-based IT services for things like file storage and sharing. How do you ensure you get it back together, that you’re getting the right prices via economy of scale, that vendors have the right profile in terms of reliability?

She said they’re seeing some organizations where IT and business are working together. It’s all about how to they towards helping their organizations reach business outcomes, said Hanson.


Author: Steve Wexler

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