Alcatel-Lucent is working to improve its position in the enterprise with an OmniSwitch story that links to its carrier cloud story, a combination it calls “Mesh”. The step is a smart one because the cloud is the largest driver of data center change, but it’s just a bit late in the market timing because enterprises rated this sort of thing more important six months ago than they do today. It’s not that cloud isn’t important, but that enterprises have reported having to do a lot more to go from a cloud hope to a cloud realization. In our fall survey we found that cloud futures were slightly less likely to influence buyers of data center switching than in the spring survey.
The issue with enterprises and the cloud in data center switching procurement isn’t the only cloud issue. Enterprises are rethinking just what they’d do with cloud computing and how much of it would likely happen. The leading edge of this position is taken by companies who are deciding that if they use cloud technology to create application mash-ups, they can personalize stuff for workers, add new cloud-hosted productivity elements, and preserve much of their current IT infrastructure—software and hardware. In fact, the average enterprise no longer believes that “private clouds” mean buying something new or changing their data center architecture. The consistent broadening of cloud positioning has something to do with this, I’m sure; you can’t say that everything is a cloud (in effect) without enveloping the present as well as the future. But…it’s also true that early hybrid cloud projects have demonstrated that it’s hard to create applications that really elastically move from data center to cloud unless you use componentized software and SOA, in which case you can likely do it without changing your current IT if you are SOA-ized already.
In the carrier space, Verizon has announced that it’s upgrading FiOS infrastructure to be 100G capable in about a half-dozen cities. This doesn’t necessarily mean that FiOS to the customer will be any faster, and interestingly the same day this news came out another story on the fact that UK users aren’t adopting the highest broadband service speeds available. For services over 25 Mbps, only 4% have subscribed even though the services are offered to nearly 60% of the market. This is fairly consistent with US experience where there’s evidence that offering fast broadband may be a competitive advantage but despite that few will actually take it. Operators in our survey tell us that customers are now and have always been clustered at the low end of the broadband service range. The lowest price is the best answer. I think that also argues against the view that offering premium handling for broadband traffic like video has much of a future; people will simply take best-efforts unless it’s truly awful, in which case they’ll change providers.
Consumerization is hitting the tech space overall, and the impact is drifting down the food chain toward the semi-and-silicon space. Lam Research is buying Novellus, both makers of technology used in chip production. The goal is to provide a framework for creating faster, better, but predominately cheaper chips as technology focuses more on inexpensive consumer devices that can’t sustain high semi prices. So is this consolidation? Sure, though it’s also likely that in the near term it’s a competitive push-back against Applied Materials, who has been a strong player in the space.