Posted by: Greg Ness | May 30, 2012

The Decline of the Public Cloud (and the Rise of the Private Cloud)

Last week I moderated a panel at Future In Review X on “What Every CIO Should Know About Cloud Computing.”  I’ve been on several cloud panels over the years, but I think this one was by far the best.  I’m hoping to post the video from the 30 minute Thursday May 24 FIRE session in coming weeks.  In the meantime a few cloud-related highlights (from the panel, conversations at FIRE and during the weeks before when we met with top editors and analysts):

The Decline of the (Enterprise) Public Cloud

There was consensus from the panel on the rise of the private cloud and the eventual decline of the public cloud (IaaS).  According to one panelist, “the private cloud is cheaper than the public cloud (for many enterprise environments).”  While the public cloud will thrive for SMBs (because it reduces the expense threshold for technology services); private clouds will thrive for IT infrastructures above 500 kW.

This sentiment was also consistent with findings shared by a top editor over dinner at Interop (Lazard’s annual “emerging tech trends dinner” and by another high profile editor we briefed on our recent May 2012 Vantage data center tour.  It appears that the public cloud peaked last year and is today receiving less interest from enterprises.  More about this in coming weeks.

Archimedius has discussed the issue of public cloud overmarketing, as well as the rise of a new generation of data centers driven in part by the spread of virtualization, the rise of mobile computing and new cost and demand-centric It operating models.  One FIRE X attendee told me after the cloud panel: “most enterprises today have no business building their own data centers.”

He was no doubt referring to rising design and construction complexity, increasing regulatory scrutiny and the growing importance of energy efficiency at ever higher scales of power consumption.  If enterprises do shift out of their older data centers and into new facilities, driven mostly by emerging power demands (more powerful servers, more services, more endpoint devices) that could be a bullish development for wholesale data centers and retail colocation, two distinct industries that have yet to be slowed by the global recession.

The wholesale data center industry is where the puck is heading, developing build-to-suit data centers that will be housing private clouds.

The Emergence of PaaS

Another interesting point raised by the panel was the ultimate resurgence of the public cloud, in about ten years, enabled by the development of vertical platforms as a service (PaaS) that could enable specialized IT applications and services for specific industries.  In short, IaaS gives way to PaaS.  Oracle’s Mark Hurd alluded to this during his “The New Frontier: Simplify IT” conversation with Mark Anderson, one of the world’s leading technology strategists, also during FIRE.  Perhaps Oracle would have some advantages in customizing integrated services dedicated to specific industries, and emerge as a PaaS leader.  Offline I spoke to one of the FIRE attendees in the audience about the possibility and the response was less than enthusiastic.

Check back here in upcoming weeks as I’m hoping to post the FIRE panel video in total, hopefully by the end of June.

A special thanks to the FIRE cloud panel participants:

“What Every CIO Should Know About Cloud Computing”: A Discussion with James Barrese, CTO, PayPal; Winston Damarillo, Co-Founder and CEO, Morphlabs; David Nelson, Chief Strategist, Cloud Computing, Boeing; Paul Strong, CTO, Global Field Ops, VMware; and Don Pickering, CEO, OneOcean; hosted by Greg Ness, Chief Marketing Officer, Vantage Data Centers

For more background read SDN May Drive a New Data Center Development Cycle, Cisco and the Networking Industry: Golden Age or Golden Fleece?, and The Cloud and the Great Data Center Race.


Responses

  1. By “decline of the public cloud” I do NOT mean that IaaS will shrink or has started shrinking, but rather that it will see declining enterprise share relative to private clouds and newly constructed enterprise data centers as well as PaaS.
    G

  2. […] The Decline of the Public Cloud (and the Rise of the Private Cloud) By Greg Ness | Archimedius There was consensus from the panel on the rise of the private cloud and the eventual decline of the public cloud (IaaS).  According to one panelist, “the private cloud is cheaper than the public cloud (for many enterprise environments).”  While the public cloud will thrive for SMBs (because it reduces the expense threshold for technology services); private clouds will thrive for IT infrastructures above 500 kW. […]


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