Posted by: Greg Ness | November 27, 2013

The Power of Cloud Transformation

Let’s face it, over the years I’ve been pretty hard on the public cloud dream and the vision of running production apps exclusively in the cloud. I’ve been critical of Amazon “over marketing” the public cloud and promoting the idea of the enterprise w/o data centers.

Events in the last few months have started bringing me around much closer to Amazon’s vision, albeit I still think that hybrid cloud will win over the next 5-10 years. I think the cloud battle could come down to Amazon, Google and Microsoft with VMware and perhaps a dozen service providers competing based on specialized services and geographic/regulatory footprints. Then there is the rise of OpenStack as a more agile upgrade to virtualized private clouds, not to mention CloudStack for service providers.

What has changed my mind, after years of data center-centric thinking? A company called QL2 Software has shown me the light when it comes to public cloud for the enterprise.  Disclosure: Yes, I came across QL2 because they are a CloudVelocity customer. 

QL2 was running 5+ racks of server in colocation, which they had calculated was costing them about 20% more than AWS, because the apps and databases running in the environment were spikey.  QL2 wasn’t looking to AWS for cost savings, even though they were notable. They were looking to enhance agility and shift their IT team from being rack maintenance/upkeep-centric to focusing on new product and service development.

Earlier this week I spoke to QL2’s Operations Director Samir Bhakta and he mentioned how his team was now more strategic and developing new products versus simply keeping IT running. Reducing costs was simply the gravy.  I’ll let him tell the story soon in an upcoming webinar we’re planning. Stay tuned. It is a pretty impressive testimonial about the transformative power of the cloud. AWS… you’ve come a long way.  I’m still a hybrid cloud believer but what QL2 has demonstrated in a matter of weeks thanks to your cloud is mind-blowing. You can read more here at the CloudVelocity blog.

Posted by: Greg Ness | November 9, 2013

Microsoft: A Most Compelling Hybrid Cloud Vision

With Microsoft and VMware entering the hybrid cloud battlefield, and the Amazon AWS steam engine continuing to convert more static racks into dynamic services, enterprises are poised to shift massive investments in data center infrastructure purchases into cloud services in the coming years. At least that’s the prediction being made by several respected analysts, including Gartner’s Bittman (see Private Cloud Matures, Hybrid Cloud is Next, for example).

The shift to the hybrid cloud should drive a massive consolidation of data center and infrastructure buying power into a few dozen service providers and set the stage for the resurgence of software as a strategic IT asset.  At the core of the shift are at least three key hybrid cloud benefits, including enhanced agility and operating efficiency. (Here is a hybrid cloud operating model courtesy of the CloudVelocity blog.)

The combination of massive investments in cloud (IaaS) and the inevitable shift to service and software-driven IT takes me back to Microsoft and the third in a series of hybrid cloud blogs based on interviews with key executives, including  Microsoft’s Azure and the Hybrid Cloud Race and Microsoft and the 2014 Hybrid Cloud Showdown.)  Microsoft is in perhaps its most pivotal position since the 1980s, this time with giant footprints in device and server operating systems, yet playing catch-up with the amazing strides made by Amazon in establishing the multi-billion public cloud market.

Microsoft no doubt takes great comfort in the hybrid cloud predictions.  It is in the hybrid cloud that it has a strategic disruption opportunity that will likely play itself out over the next 3-5 years.  When I recently met with Microsoft GM Mike Neil I asked him about the evolution of hybrid cloud and the critical role Microsoft could play in hybrid cloud adoption.

Neil sees several key hybrid cloud catalysts, all related to the levels of confidence, control and predictability that enterprises of all sizes will require before they put mission critical apps in the cloud.  Despite the public cloud’s success in DevTest and with new apps built for the cloud, improvements in service agreements and security and compliance capabilities will be crucial for widespread enterprise adoption, according to Mike.

A recent survey by Osterman Research (of 126 companies with a mean company size of 12,203 employees and median of 1,500) generally agrees with Neil.  It found that while 61% of enterprises had deployed apps in private clouds, only 14% were “running as many apps as possible in the Public Cloud.” In terms of use cases 18% of those surveyed were running development and test systems in the public cloud, and 17% were running “disaster failover services” in the public cloud.  That suggests that even some of the public cloud devotees may possibly be running hybrid clouds, versus the all or nothing cloud strategy.

The biggest drivers for the cloud according to Osterman Research were a reduction in the labor spent maintaining servers, enhanced application failover and disaster recovery and improved application availability and accessibility.

Key points of public cloud resistance (again according to the study): 4% of those surveyed fully trust the public clouds while 12% trust them overall; yet 62% have at least some concerns and 22% have significant trust issues.

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Enterprise Trust in Public Cloud, per Osterman Research, Nov 2013

The top barriers to public cloud adoption, per Osterman, were related to data migration challenges and hidden costs as well as security service integration, including LDAP and Active Directory.  More than 50% were also concerned with how the data in the cloud would sync with the data center.  48% were concerned about lock-in.

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Top Enterprise Public Cloud Inhibitors, per Osterman Research, Nov 2013

It should be noted that while Microsoft’s Azure is behind Amazon’s AWS in multiple areas, it is catching up quickly.  Some even argue that Azure has better performance when it comes to cloud storage.  Yet many of the inhibitors to cloud are regarding the difficulties inherent with migration, hidden costs and the integration of security and authentication services.  This gets to the control, confidence and predictability that Neil mentioned.

Neil then discussed how Microsoft would address today’s public cloud reservations, by articulating a more enterprise-centric vision based on: tighter service level agreements; delivering Active Directory services between the data center and the cloud; “battle testing” Azure at a very rapid rate; and enabling agility across multiple clouds.  He also made it clear that Microsoft understands the stakes, stating simply as he summarized that “Azure is our next OS.”

We spoke briefly about VMware’s emergence into the hybrid cloud and how this battle might shape up differently than the preceding virtualization battle kicked off when Microsoft launched Hyper-V.  He mentioned Microsoft’s “full stack experience” with Azure’s “homogenous landscape”, versus VMware’s more hands off role in some areas, including the prospects of channel conflicts with partners.

He also predicted that “Cloud will grow to the point of becoming strategic national infrastructure,” as he contrasted the Microsoft vision to the execution and vision of various cloud competitors, some of whom may be forced to grapple with a more challenging mix of local issues in many countries as they build out data centers or choose to partner.

“Cloud is the next logical step for Microsoft,” Neil advised.  Clearly recent research on cloud perceptions is in line with Microsoft’s perspective on how the hybrid cloud will evolve.  The question then comes down to how well Microsoft can continue to execute on its quite compelling vision.  If the last twelve months of Azure developments are any indication, they are well on their way.

Posted by: Greg Ness | November 5, 2013

Answering the Cloud Risk Question

As predicted in 2012, hybrid cloud has now entered the hype cycle, with highly respected analysts and vendors making bold predictions that last year might have been considered provocative.  As enterprise IT shifts from hardware-centric to software-centric infrastructure, billions if not trillions of enterprise tech investments will likely shift from specialized hardware (and the resulting support infrastructure and skill sets required for its operation) to ever more powerful software-enabled models.

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Looking back to some of the early days of cloud migration.

Just as the evolution of virtualization within the data center planted the seeds for more elastic networking, the rise of IaaS cloud is setting the stage for more elastic delivery of apps and services into and between data centers and emerging clouds.  Many of the most powerful benefits of custom, dedicated hardware infrastructure pale when compared to the power unleashed by apps that can achieve unprecedented levels of agility, protection and efficiency by simply leveraging –as needed- the massive clouds being built globally in some of the world’s most advanced data centers.

A few weeks ago I was speaking to a small group of tech executives at a CIO Summit event in Napa.  I was asked what I thought about the risks of the cloud, especially from a security and control standpoint.  I answered that with more than $50B now being spent annually on cloud infrastructure, one may be asking the same question about their colocation provider in 3-5 years.  The real question to ask is: who will be able to keep up with the innovations being unleashed by that level of spend?

Posted by: Greg Ness | October 15, 2013

Why 2014 will be the Year of the Hybrid Cloud

I have written several hybrid cloud articles over the last 30 days, based on interviews with a variety of tech analysts and executives. See, for example Microsoft and the 2014 Hybrid Cloud Showdown, Microsoft, VMware and the Year of the Hybrid Cloud and The Top Three Benefits of Hybrid Cloud Deployment.

One of the common themes across these articles is that with Microsoft and VMware entering the cloud IaaS market, we are about to see a massive battle for enterprise cloud deployments; and the most likely winner will be enterprises who are able to leverage the cloud for unprecedented agility, protection and efficiency.

Enterprises won’t be able to get those benefits by treating the cloud as just another rack or data center in an empire of racks or data centers, but rather by treating the cloud as an integrated extension of the data center.  I talked about this important hybrid cloud distinction in The Hybrid Cloud is an Integrated Cloud.

For the winners the cloud will exceed the power of server virtualization and allow enterprises to leverage clouds on an “on demand” basis.  The much over-hyped concept of cloud bursting, for example, isn’t even close to the power of leveraging the cloud for disaster recovery for production apps. The 2013 barrier is essentially automation and standardization.  That will likely change in 2014, as cloud migration solutions and platforms mature.

Posted by: Greg Ness | October 10, 2013

Will Azure be the Hybrid Cloud Tipping Point?

Recent Microsoft (MSFT) and Gartner announcements have put hybrid cloud front and center for the next 3-5 years, and for perhaps a much, much longer period.  Market caps for several players could be at stake: during these 3-5 years you could see the hybrid cloud eclipse the public cloud, both in terms of growth and overall enterprise spend. You think I jest? Read on.

I talked about the multi-billion market potential of the hybrid cloud in March 2013’s Will VMware or Microsoft Cash in on the Hybrid Cloud (VMW).  It could be a $60B total addressable market, when one makes a few reasonable assumptions:

A leading analyst firm forecasts the shipment of about 10M servers per year over the next three years, with about 50% of them being x86. What if enterprises wanted the strategic scalability, agility and protection of the hybrid cloud model, instead of the tactical agility, efficiency and protection of server virtualization?

Hybrid cloud would give enterprises more complete control of their apps and services.

If VMware could get $2k/year for each server (traditional and x86), that would amount to an additional TAM of $60B based on a three year refresh rate. Yet that would represent a major business model shift and limit the amount of lock-in that VMware would have over its customers operating on its private cloud platform. It could face margin erosion for its core lines.

These estimates only appear shocking because public cloud has been the darling of the press and Amazon (AMZN) has done an amazing job promoting the cloud, especially for new apps and as an agile Dev/Test environment. Yet recent steps by Microsoft, VMware and a host of OpenStack cloud players are likely to make 2014 a tipping point for hybrid cloud momentum. And with powerful new competitors (all battling over hybrid cloud leadership), Amazon risks getting sidelined from the buzz it has so adeptly built over the last three-plus years.

For more recent hybrid cloud background see Rachel King’s Hybrid Cloud Refresh and Charles Babcock’s coverage of Gartner’s enterprise hybrid cloud adoption predictions.  See also Jon Collins’ perspectives at “Hybrid Cloud is dead; Long Live Hybrid.” These have all appeared in recent weeks in response to Gartner and Microsoft hybrid cloud publicity. Yes, the hybrid cloud battle begins.

The real driver to hybrid cloud won’t be price but agility according to almost a dozen key analysts I’ve spoken with since this summer’s VMworld.  That is consistent with enterprise cloud architects currently dabbling in various cloud services and platforms. Enterprises don’t want to be stuck in anyone’s cloud, however inexpensive, robust and powerful it is.

That suggests that the middle ground between the cloud and the data center may be where the hybrid cloud inflection point really is, versus the comparative attributes of say a dozen different walled gardens.  Note my comments in Hybrid Cloud will be won in the Middle Ground (from September 2013).

The hybrid cloud pressures are building: 

1) The case for data center construction is rapidly eroding for growing ranks of companies, except for a small handful of cloud-enabled power players with the in-house expertise and hundreds of millions in capital at their ready disposal;

 2) Data centers are also becoming more expensive to manage as complexity increases with the evolution of IT and the powerful benefits of virtualization run their full course within legacy environments;

3) The handful of power players mentioned in #1 are investing more than $50B per year in some of the most advanced data centers that have ever been built, often utilizing methods and clout (advanced designs, energy efficiency, tax advantages, etc.) that most companies cannot comparatively exploit; and

4) As Amazon continues to promote the public cloud as the enterprise endgame, new, credible cloud service provider competitors will emerge with “close enough APIs, services and options” and deep pocket investment capabilities while giving enterprises hybrid cloud control over their apps and infrastructure.  In other words, hybrid cloud automation enabled by integration.

That makes the hybrid cloud migration and integration process, strategic to the evolution of hybrid cloud operating models.  When those processes are fully automated we will see a hybrid cloud adoption hockey stick, a rapid rise in enterprise cloud adoption far exceeding today’s hybrid cloud growth rate. Cloud migration needs to be fast and inexpensive, in order to support enterprise agility requirements. 

In September I interviewed CloudVelocity customer QL2 Software, a Seattle-based data and analytics firm focused on a handful of vertical markets including travel and energy. They were able to reduce their cloud migration costs for a 50+ server infrastructure by as much as 75%.  As cloud migration and integration solutions continue to mature (and support production environments) hybrid clouds could become the norm.  In short, the middle ground of tools, services and experts required today for hybrid cloud deployment could be automated, with major impacts on adoption.

That then sets the stage for the emergence of Microsoft and VMware in the hybrid cloud wheelhouse.

Windows Azure: Crossing the Hybrid Cloud Chasm

Last month I spoke with Microsoft Corporate Vice President Brad Anderson, as he shared Microsoft’s vision of a hybrid cloud platform, including recent announcements of Windows Azure Pack shipping in Windows Server 2012 R2.  The Azure code will enable high scale hosting and management of web and virtual machines.

Within minutes it became obvious that Microsoft understood the critical importance of hybrid cloud integration versus simply offering a competitive IaaS to AWS.

Microsoft also has significant service provider expertise and massive footprint for Azure development as it distributes Azure into data centers on Windows servers. Microsoft has what Amazon is hoping to build out: access to most if not all of the world’s data centers.  Microsoft could deliver a powerful blow to Amazon in the enterprise space by having a more advanced, more enterprise-friendly approach to hybrid cloud integration.  In short, they make it easier to build hybrid clouds.

If Microsoft can expand the Azure footprint faster than Amazon can convince enterprises into an “all or nothing” leap into their impressive clouds, Microsoft could easily be in a commending position.  So could VMware, thanks to their core expertise and footprint in virtualized data centers and “private clouds,” whatever you think that means.  So in 2014 the cloud momentum could shift from the perhaps tired “public cloud purity” momentum driven forcefully by Amazon to a pitched battle between two very powerful titans who have been in the ring before, when Microsoft launched Hyper-V against VMware’s hypervisor beachhead.

That is why I think that in 2014 we are likely to see a direct battle: x86 servers with VMware versus Windows servers preloaded with Azure. Note that Azure has been gradually gaining share since 2011 due to very aggressive pricing.  Amazon risks watching this battle from the sidelines; especially if they continue to advocate the “all or nothing” public cloud.

Posted by: Greg Ness | October 3, 2013

The Hybrid Cloud is the Integrated Cloud

As the public cloud evolves to address more enterprise IT operating requirements it will have to evolve into being a strategic part of a hybrid cloud operating model.  Enterprises will demand agility and control for the vast majority of their critical apps, and that is where the cloud opportunity is greatest.

The ability to leverage the cloud when and where needed with minimal constraints and maximum control is perhaps the most disruptive IT capability to be unleashed since the dawn of the PC era.

Treating the cloud as another fixed environment in an increasingly complex collection of stovepipe environments is the natural extension of “data center think”, but that perspective will become obsolete as clouds become integrated with data centers.

ð  Hence recent Gartner predictions about the key cloud driver shifting from cost to agility.

Today, cloud migration and cloud integration are at the forefront of this new IT age, yet the tools and solutions are immature, offering varying degrees of the key steps (discovery, blueprinting, provisioning, synchronization and service initiation) required to deploy existing apps without modification into a hybrid cloud operating model. Some apps will no doubt have to be re-architected and other apps may reside in dedicated data centers for their operating life.  Some may be delivered by SaaS models into dedicated data centers or various clouds.

ð  The key is thinking beyond the cloud as a fenced environment as I said in Hybrid Cloud: Two Competing Models and Hybrid Cloud Market Will be Won in the Middle Ground.

Using the Cloud for Disaster Recovery Requires Integration

One of the most powerful use cases for the hybrid cloud will be leveraging the cloud for “pay as you go” cloud DRCloud-integrated disaster recovery has the potential to significantly enhance the business case for disaster recovery, especially for small and medium-sized enterprises (by reducing expenses and improving RPOs and RTOs) and for large enterprises (by allowing for an extra layer of protection over and beyond the duplicate infrastructures already under management).

The basic promise of cloud-integrated disaster recovery is the ability to use the massive investments by Amazon, Microsoft, VMware, Google and OpenStack sponsors instead of having to purchase duplicate hardware and infrastructure for rare or occasional use during planned downtime or unplanned outages.

Yet using the cloud for DR will require cloud migration and integration capabilities, versus treating the cloud like an additional stovepipe. With integration, testing, dry runs and aggressive RPOs and RTOs become economically viable for the vast majority of companies. The transition from the data center to the cloud becomes seamless.  That makes the cloud transformative versus simply additive. 

Posted by: Greg Ness | September 25, 2013

Moving Apps from Co-Location to AWS Just Became 75% Easier

One of the most powerful use cases for AWS over traditional co-location is increased agility, especially when it comes to production apps with unpredictable workloads.  Rather than racking up co-location capacity for occasional usage spikes, QL2 Software discovered Amazon AWS and their powerful “pay as you go” IaaS model.  It has made all the difference.

QL2 Software is an information age company that provides real-time and historical data and analytics for a variety of industries, including travel, energy and manufacturing.  The real time aspects of their business translate into surges in application traffic volume, which drove Operations Director Samir Bhakta into evaluating AWS as a new home for a set of applications and databases spanning about 50 servers.

While AWS was at parity with the direct costs based on provisioning hardware for peak usage, it was cheaper on a TCO basis.  Even more importantly, AWS allowed QL2 to focus their IT help on product differentiation by making it easier for the company to spin up capacity and develop new products in response to customer demands.

“AWS allowed us to shift our skill sets from hardware to software and from service delivery to product development,” according to Samir. “We develop products and deploy server capacity faster with AWS, than we did in traditional colocation.  We get to focus our efforts on differentiable skills and capabilities that will, in the long term, allow us to grow faster and smarter.”

The 10 year old company was launched in a co-location environment, but had evolved several apps into the public cloud over time as hardware needs evolved.  While Samir could save money by operating in the cloud, there was still the cost of getting his Linux apps and infrastructure into AWS.  Cloud migration costs and processes can often risk offsetting the AWS operating advantage, especially for larger environments with robust service and security requirements.

Since Samir had already moved some infrastructure onto Amazon AWS, he had a good idea of what to expect from a team of cloud migration vendors, contractors and tools for his custom 50+ server app (with 2 databases) cloud migration project.  Based on previous experience and bids, he was looking at a 6 month effort with direct costs under $150k (not including his own time which would have to be spent overseeing the project, contractors, timelines, etc.)  Even with existing tools and vendors, it would take months for the AWS payoff to have a net positive business impact.

Then he found CloudVelocity (as it had recently announced the general availability of its One Hybrid Cloud™ software in July 2013).  After two exhaustive proof of concept tests, QL2 discovered that it could migrate its environment from colocation to AWS in 1/3 of the time originally expected and at ¼ the budget set aside for older tools and processes.  The bonus: he also freed up months of time to work on more product innovations, versus simply managing the cloud migration project.

CloudVelocity Payoff for 50+ Server Migration to AWS

  • 75% reduction in cloud migration costs
  • 66% reduction in time required
  • Enhanced ability to focus team on strategic product development

Thanks Samir for buying CloudVelocity and for taking time from your schedule to talk to me about your business, your IT team and your newly discovered ability to enhance AWS TCO by reducing cloud migration costs.

Posted by: Greg Ness | September 8, 2013

Hybrid Cloud Battle Will be Won in the Middle Ground

Most of the biggest technology payoffs have been generated by companies that drove transformations in how data could be managed, distributed and protected. From the mainframe era with IBM (IBM) through the PC era with Microsoft (MSFT) and the networking era with Cisco (CSCO), disruptive technologies that set new standards for data analysis, access and management established built-to-last companies with massive market capitalizations. Yet eventually the disruptors became themselves disrupted.

The hybrid cloud is the next major opportunity for disruptive innovation, and companies like Amazon (AMZN), Google (GOOG), Microsoft (MSFT) and VMware (VMW) are well-poised to establish best of breed cloud services. Recent estimates peg investments in cloud infrastructure to now exceed $50B per year.

Yet the winner of the hybrid cloud war may not win by simply building the grandest cloud service, but rather by having a strategic cloud migration and integration capability; that is, the ability to onboard larger, production apps faster than a competitor.  That capability will be framed by critical APIs, services a robust hybrid cloud automation platform.  In a market where there are multiple clouds to choose from, cloud migration automation may have more to do with the success of a cloud offering than its sheer depth of services (storage, networking, apps, etc.).

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The Power of Software versus Hardware

When Sun Microsystems (ORCL) once dominated the server world, a much smaller company (with about 20 employees) based in Palo Alto developed software which allowed servers to be utilized more efficiently.  As it grew from its stealth launch in 1998 to its commanding presence today, VMware (VMW) set the stage for another computing disruption by proving that server hardware could be used much more efficiently with virtualization software: multiple applications and operating systems could run on the same server.

Server virtualization allowed IT pros to manage more app workloads. Sprawling, increasingly complex data centers could also be more efficiently utilized. VMware was not a server hardware company, but a company developing software to allow servers to be used more efficiently. Virtualization paved the way for a series of data center evolutions that made clouds operationally feasible on ever larger scales, which in turn drove new storage and networking demands.

See, for example, VMware’s acquisition of tiny Nicira for $1.2B+, where networking became increasingly strategic to the growth of server virtualization. And VMware stands today at the precipice of yet another disruption: hybrid cloud.

Middle Ground Software for the Cloud

As tech leaders like Google, Microsoft and VMware invest heavily in cloud infrastructure and public cloud leader Amazon continues to invest as a market leader, many enterprises will likely not be looking at any single public cloud as a permanent destination, but rather as a temporary location driven by changing business and operating advantages.  Servers, for example, have refresh rates that can involve replacement as often as every 3 years, sometimes even less.  Clouds might be even more temporary thanks to the rise of “on demand” operating models like “pay as you go” disaster recovery and (today over-hyped) cloud bursting.

For example, while the cloud may not be cost effective for many full time workloads, it can be very economical for occasional, unpredictable workloads. 

Think “pay as you go” for disaster recovery, for example. Today many enterprises invest heavily in buying and operating duplicate server and networking hardware (for rare use during outages).  Clouds could be significantly more cost effective for use during rare or even occasional bouts of planned or unplanned downtime.  Taxis, for example, are very cost effective for short term use, but for full-time use they are cost-prohibitive for most drivers.

The ability to easily deploy in a cloud based on certain conditions may be as strategic as the cloud choice itself.

That brings us to the importance of the middle ground, or agility and automation in between the data center and the cloud.  By reducing the time and expense required to migrate apps into and between clouds, the clouds become more economical and more feasible for powerfully disruptive use cases, like cloud-based disaster recovery.

Today there are a handful of startups in the cloud migration middle ground with varying degrees of automation and varying levels of support for production environments.  As the cloud migration category matures to support cloud migration and integration the cloud will ultimately become a seamless extension of the data center, something that Microsoft and VMware are already talking about.  When that happens, fortunes will be made in the middle ground between massive data center investments and equally massive investments in cloud infrastructure.  That middle ground will become strategic to enterprise cloud capabilities; perhaps more so than any single cloud.

Further Reading

Hybrid (Cloud) is a Whole New Cloud – Seeking Alpha

Hybrid Cloud – Two Competing Models – VentureBeat

Hybrid Cloud is Ideal for Disaster Recovery – Anand Iyengar, CTO, CloudVelocity

VMware’s Second Act – VentureBeat

Can VMware Pull Off its Second Act? – GigaOm

A couple headlines recently grabbed my attention, both involving Rackspace:  1) Rackspace had announced that it is supporting hybrid cloud, because hybrid cloud had won (the cloud war); and  2) earlier this week Gartner released its estimates of cloud infrastructure spend, which I discussed in this blog at the CloudVelocity hybrid cloud resource center:

Google, Microsoft and Amazon are outspending everyone else by a wide margin.  Rackspace spending is in a distant fourth place, spending less than 10% of Google’s cumulative cloud spend, or about $1.4b per Gartner.

I have written several blogs over the years on the recent boom in data center co-location spending, including coverage of this forecast from 2011 predicting colocation shortages in the near future.  I was last year convinced that the Nemertes trend discovered through copious research was spot on; that is, until I saw the Gartner estimates showing how much was being spent on cloud infrastructure by the giant public and hybrid cloud players.  2012 spending was estimated at about $50b per the chart, the year after the Nemertes research was conducted.

I was certainly impressed by the steam building in the sky.

I’m naturally having second guesses about a shortage of data center co-location space, given the incredible spend increase by the likes of Microsoft, Google, Amazon and the rest.  This year VMware also announced its hybrid cloud strategy. Rackspace cloud spending, for example, was dwarfed by the investments being made by the big three.  Yes it could take several years for those investments to take hold in the enterprise market and Nemertes was only talking about a shortage through 2015.  Yet one cannot look at those numbers and not be blown away by their significance (if accurate).

Rackspace, as a leader in co-location, is among the first to signal the new hybrid cloud era.  As a result of its leadership and spending, it will likely be one of perhaps a handful of co-location “survivors” who are able to evolve into more dynamic and highly automated cloud offerings.  The rest will likely become cloud fodder as their contracts run out and enterprises increasingly invite Azure, AWS and VMware to the RFP process.

The data center enterprise hardware market starts looking like the service provider market, with fewer buyers and larger purchase orders. Enterprise IT becomes increasingly focused on software, services and IT strategy.

Posted by: Greg Ness | August 15, 2013

Has Hybrid Cloud Already Won?

Enterprises are still dabbling in the cloud, and actively observing emerging cloud offering battles as megawatts of low cost and energy efficient cloud capacity comes online.  Apps running in the cloud constitute perhaps 4% of all enterprise production apps, despite the obvious benefits.

Yet a Rackspace survey announced today suggests that hybrid has won the game.

If a very small portion of enterprises have deployed any apps in the cloud, how could hybrid cloud already be declared a winner?  It appears that hybrid cloud is not what enterprises have deployed but rather what they want (by Rachel King at ZDNet):

“The first major takeaway lesson was that the hybrid cloud turned out to be the preferred deployment choice for 60 percent of the enterprises surveyed.

On top of that, 60 percent of respondents also said that they are mulling whether or not to move certain applications or workloads partially or completely off the public cloud because of limitations or benefits of other platforms.”

The gap between what enterprises want to do with the cloud and what they are actually doing is likely a wide one.  In between are strategic considerations about which apps can be deployed and whether or not there is an economic advantage for the app to be deployed in a hybrid cloud.  Predictable workloads are often cheaper on premise, while unpredictable workloads are often cheaper in the cloud. That takes us to an extreme case of unpredictable workloads: disaster recovery.

One of the most powerful use cases for hybrid cloud will likely be “pay as you go” cloud disaster recovery.  It could reduce DR costs by more than 50% versus traditional approaches and offer improvements in RPOs and RTOs for many.  Indeed, it may be the most powerful operating model for hybrid cloud.

Further Reading

How Deep is Your Cloud (Strategy)?

Cloud Migration is Bigger than Image Portability

Hybrid Cloud Services: The Final Frontier

The Hybrid Cloud is Ideal for Disaster Recovery

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