The cloud has been a kind of cultural influence on the IT space for years, but the influence is now becoming more direct, and the pace of that shift is picking up very quickly. Each of the factors that seem to be driving this shift are important, and in combination they might be transformative.
The biggest factor in the shift is the growing influence of enterprise buyers on cloud provider revenues. While many have seen the public cloud as the natural destination for every corporate application, the truth is that most corporate applications are staying where they started—in the data center. As a result, early cloud revenues have been dominated by startups, particularly those involved in some way in ad-sponsored services, like social networking. Amazon’s supremacy in the public cloud space owes much to its dominance of that particular niche. However, selling cloud services to startups is clearly not a growth space; most of the big winners end up going to their own infrastructure eventually, too. Enterprises are now working their way into the market.
Microsoft has a natural advantage in enterprise cloud, because nearly all enterprise cloud aspirations aim at supplementing data center or in-house-hosted applications with specialized front-ends. Microsoft has server and desktop dominance, and so can create the kind of symbiosis between the cloud and the premises that users want to see. As a result, my own surveys show Microsoft’s Azure leads Amazon’s AWS in enterprise cloud sales, and there’s some indication that lead is growing.
Amazon’s initial reaction to this was to attempt to extend its own cloud outside its boundaries using Greengrass, a server technology capable of running AWS code. This approach hasn’t proved to be sufficient, and most recently, Amazon has extended its alliance with VMware to create a stronger alliance to counter Microsoft and Azure. I think even this step is too tentative because it’s not backed by any strident new positioning, the thing likely needed to get enterprises to pay attention to the moves.
Both Amazon and Microsoft are facing a common enemy in the form of IoT-and-event platforms designed for hosting functions/lambdas outside the public cloud. Serverless or functional computing has been available from all the major cloud providers, but users have reported that the delays associated with loading functions in demand makes many event-driven applications less than impressive.
VMware has its own challenges, of course. The champion of virtualization lost momentum to both OpenStack and containers, and has been struggling to get it back. They’ve now recognized that SDN management of hybrid and multi-cloud address spaces could be the secret sauce, and so they’ve been promoting NSX as the premier SDN strategy—something that in terms of total users and total connected applications seems to be true.
SDN and networking have confounded the cloud providers too, at least so far. VMware has been promoting its ability to connect AWS applications, but most of the major SD-WAN players can do that as well, so the differentiation value of VMware’s positioning has been limited. Amazon hasn’t jumped on VMware, it’s said, because VMware also wants to connect Azure clouds for the good reason that would serve VMware’s own cloud interests better.
The network side of the cloud seems destined (eventually) to be what I’ve called “logical networking” or “network-as-a-service” (NaaS). The elasticity and agility of the cloud make traditional location-based networking obsolete, but very few vendors have the features needed to promote an alternative, and none seems willing to position it aggressively. The question, in my view, is whether public cloud providers or network operators will step in and take up the NaaS mantle. Certainly the cloud providers are more agile and traditionally more aggressive early market movers, but the operators probably know they need a strong SD-WAN and NaaS approach badly to avoid complete cannibalization of their business services, and to support their own cloud computing initiatives (both internal use of carrier cloud and enterprise cloud computing offerings).
Google, so far, has been a laggard in all the missions I’ve talked about here, despite the fact that they have arguably the best technology for their cloud and also the best SDN/NaaS model. It seems often that Google wants the market to come to them, recognizing the error of the “old ways” and embracing Google’s model even if they’re not totally sure what that model is. They may be right in the long run, but they stand to lose a lot of positioning value near-term, and also risk having customers get entrenched in alternative models.
Microsoft seems to have the best position in the ongoing enterprise cloud services war. They are leading at the moment, they have an established enterprise data center and desktop position, and they have a strong public cloud offering. All this gives them the enormous advantage of a broad and simple message, one nobody else controls. Amazon and Google, their rivals, have the disadvantage of relying on things that are really not in their control at all. Amazon doesn’t control any credible premises strategy, and even an alliance with VMware won’t give them one. Google’s best known for Kubernetes, which is the centerpiece of so many strategies that it’s hard for enterprises to really understand what it is and where it’s going.
VMware has a little of Microsoft’s benefits in the “singleness” sense. OpenStack and Docker, like Kubernetes, are pulled in a million different directions, and even though VMware is behind the collective movements they’re probably ahead of any of the individual players in either space. Add that to the fact that their whole future strategy can speak with one voice because they own it, and you could see them developing into something useful, even commanding. Add to that VMware’s recent purchase of a multi-cloud management company, its reducing AWS pricing, and its aggressive courting of both Microsoft and Amazon, and you see a player who thinks they have an opportunity.
Do they? It’s the application models that will likely set the course for the cloud. There’s a lot of good work being done, but much of it focuses on developers and is (by management/executive reckoning) incredibly geeky in terms of documentation. As a former software architect I can understand the idea that tools will reshape development, which will reshape applications, which will reshape business practices. It just takes a long time, much longer than having executive mandates for change created by jumping right to the business practices and benefits side. Every player who’s looking for cloud supremacy has to deal with the evolution of the application model, not only in a technical/software sense but in a positioning and education sense. The latter has been a tough nut for today’s market to crack, and it’s not going to get easier.