We didn’t have a major cloud show in the last month, so I’ve not been blogging much about the cloud compared to other technology revolutions like SDN or NFV. However, I did get some interesting cloud data from the fall survey, and if you combine the data with a bit of modeling and analysis, you can get a clearer picture of what’s happening in the senior partner among our tech revolutions.
First, it’s true that cloud computing is growing, though it’s a bit of a juggle to get exact numbers because they’re not broken out. Cloud growth, measured in revenue, is almost certainly hitting close to 40% per year, a nice number. And this is happening despite the fact that we’re not at this point really doing much more than scratching the surface of cloud opportunity. I’d estimate that we’ve penetrated only a bit more than 1% of what could be achieved. But don’t take the revenue numbers at face value, because a big slice of cloud spending comes from OTT startups and not businesses.
But the second point is equally interesting. What’s driving cloud usage in the enterprise is changing. The first wave of the cloud was driven by two primary factors—server consolidation and development/testing activities. The second wave was driven by the creation of application front-ends associated with business web presence. We’re now looking at a more complicated and more interesting “third wave”, and this is where the future of the cloud is likely to be determined.
You hear that the cloud’s big push will come by taking over the hosting of the core business or mission-critical apps. If that’s true then the push isn’t coming any time soon—if ever. Enterprises say that these applications would cost them between 15% and 25% more to run in the cloud, considering all cost factors. There are special situations where a transition from private data centers to the cloud for mission-critical apps makes sense, but they’re not common and won’t make much of a market. These applications won’t move to the cloud as much as evolve into the cloud.
The same companies who say that their core applications would be more costly to run in the cloud think that components of these applications will shift cloud-ward over the next five years. The drivers for this migration are a combination of two factors. First, companies are being forced to address mobile empowerment more, both because worker mobility is a fact of life for a key segment of their workforce and because point-of-activity empowerment offers potentially huge benefits. Second, companies are seeing more and highly useful platform services that offer them cloud-based capabilities that aren’t available on premises. Could they be? Sure, but with no current practices and technology to displace, these services give the cloud an edge.
The way enterprises expect this to go depends on how these two drivers impact planning, and also on whether the company is already looking to the cloud for cloudbursting or failover applications. An application is a bit like an onion; there’s a core element that’s already deployed in the data center and is highly integrated with critical databases, and a series of outer layers that are more directed at presentation of information than at the central storage and processing. It’s easy to move the outer layers of the application when something fails, or supplement them under load, and so these layers are what typically get cloudsourced when a company starts backing up or supplementing data center resources. Interestingly, though, these outer application layers are also the ones most likely impacted by things like mobility or platform services. Thus, where we do have cloudburst/failover migration of components, we ease the way toward justifying keeping these components in the cloud for mobility or platform service reasons.
According to enterprises, cloudbursting and failover are always a part of the business justification for migrating mission-critical applications to the cloud but they rarely are more than an insurance policy. The persistent commitment to the cloud is created by those other two drivers in some mix, and exploiting the combination of a kick-off based on availability and performance and a drive to the goal based on mobility and platform services would seem to be the optimum strategy for cloud providers.
They don’t follow it, though. According to enterprises, the biggest tech-side drivers for their mobility projects come from their IT vendors and they’re almost exclusively drivers for mobility-based changes. We’ve called this “point-of-activity empowerment”, and it’s something that almost three-quarters of large enterprises and over half of all enterprises say they’re exploring. With, as I’ve said, their IT vendors.
That is interesting because it means that the things most likely to advance the state of the cloud are things that are not being exploited by the cloud providers. IBM and HP and Microsoft may have cloud strategies but since the cloud is viewed as a means of reducing IT spending, they’re not likely to be pushing their users to the cloud as much as addressing the cloud if they have to. That’s why point-of-activity-empowerment changes are seen more often as IT evolution than as cloud evolution.
Platform services are essentially a cloud-specific strategy; Amazon has the most of them and is the strategic leader. But CIOs are not being pushed into platform services by cloud providers. Where they hear of them, the information is percolating up from cloud specialists on staff and it’s not necessarily connected to any specific project activity. That means that when a company launches a point-of-activity project that’s perfect for platform services (a double whammy, value-wise) they will see the connection because some tech guy recognizes it—and that’s not the best way to drive a cloud evolution. The CIO needs to be educated.
In fact, the CIOs themselves admit they are a major barrier to cloud adoption on a larger scale. In our survey, 82% of CIOs said they could “be doing more” to realize the full value of the cloud. The reason they don’t? Because they don’t have the information they need. Cloud evolution is a religion to sellers and the media, and to the CIO it’s a technology decision that first must be justified and second poses a significant career risk. If you’re a cloud seller of any sort, you need to be doing more to help your real buyer.