I recently read the IDC InfoBrief Don’t Get Left Behind – The Business Benefits of Achieving Greater Cloud Adoption.
It was an interesting read and it certainly contains some interesting statistics, but I think the authors have completely underestimated the role of public cloud offerings from large software based providers such as Microsoft Azure, Amazon AWS and Google Cloud Platform.
One of the conclusions drawn in the report jumped out at me – mainly because I didn’t agree with it.
Actually I don’t completely disagree. I agree organisations prefer to work with vendors they know and trust.
Indeed that’s why I called out the existing relationship many organisations have with Microsoft as a big plus for Azure in my previous blog post. The bit I’m not buying is that it will be the IT infrastructure vendors at the top of the list.
My reasoning is that the report is referring to IT hardware vendors, especially as it was sponsored by one of those vendors.
For years, hardware has been becoming less relevant and the journey to the cloud is only accelerating that trend. Virtualisation and IaaS are now so prevalent it is not at all unusual for entire projects to run their course without any in the delivery team ever sizing, purchasing or even seeing a physical server. Emerging trends such as software defined networking and containers are set to further marginalise hardware vendors. It’s just irrelevant which vendor’s kit sits under a workload.
So that begs the question ….
Who will emerge as the cloud providers of choice?
I see three main contenders in addition to the infrastructure vendors.
We’ve seen the likes of Fujitsu, Dimension Data and others bring significant cloud platforms to market. Ultimately I think some of these will carve out a niche, but I don’t think any of them are going to be the cloud providers of choice for the masses.
Telcos are already selling an enabler for cloud in that they deliver the network upon which the Cloud relies. They have the customer base to justify establishing private cloud offerings and many are delivering private connections to Public Cloud providers who provide Hybrid Cloud offerings to that base. I think the Telcos will also command a slice of the pie as they will be able to offer more bundled services within a commercial construct. This positions Telcos well to play a major role in an organisation’s Cloud transformation journey, more so than the outsourcers.
Cloud providers emerging from a software background such a Microsoft, Amazon, VMWare and Google are the ones I believe will emerge as IT providers of choice in the future. I think they can achieve something the outsourcers and telcos will struggle to attain. Hyper-scale.
Profitable cloud is a volume business. The first two groups are both basically engaging in vertical integration of the supply chain and as such their cloud offerings will be constrained by their regional customer bases.
Software vendors are engaging in horizontal integration. They provide cloud services on a global scale that provide email, calendaring, IaaS, PaaS and, significantly consumer services, and all of these can benefit for the economies of hyper-scale.
Only time will tell, but my money’s on the IT Software vendors in this race to be the Cloud provider of choice. It’s only these vendors with the scale to provide the services demanded by customers, at the prices they expect.