The hybrid cloud might be coming into its own. For over a year, it’s been clear that enterprises are finally getting their acts together on hybrid cloud, and cloud providers were starting to position more for enterprise adoption. This quarter, we’ve seen two players with the credentials to further expand the hybrid-cloud universe show signs that they intend to do just that. We’re even seeing signs that it’s paying off for them.
Just as a quick stage-setting, let’s look at hybrid cloud. Since the dawn of cloud computing, we’ve been fighting a misperception of how enterprises would use the cloud. The initial focus of “migration” of legacy apps to the cloud was never realistic because it doesn’t allow for full exploitation of cloud benefits. You need to write cloud-native apps, but even the recognition that was essential has been difficult to secure in the market. Developers need a framework in which to write and deploy stuff, and enterprises as late as last December weren’t seeing one. With two players pushing frameworks, that’s going to change.
IBM closed on its Red Hat deal, and in addition announced its Kabanero cloud-native model of development, based on a whole series of existing and new open-source projects. The Street is a bit preoccupied with Red Hat as simply a revenue stream rather than a provider of new addressable market opportunity, so we don’t have objective measures of IBM’s potential with Red Hat included, and of course Kabanero is only a week old. The important point is that IBM’s WebSphere is an established enterprise development framework, and you need cloud-native development to build the new model of the hybrid cloud. I think the Kabanero model will eventually unite with Red Hat’s offerings, and give IBM both a broader opportunity base and a direct pathway to hybrid exploitation.
Microsoft is, according to my rough survey, the leader in enterprise hybrid cloud today, and it beat Street estimates of cloud growth in the most recent quarter. There are a lot of reasons for Microsoft’s success, but the big top-level one is that Microsoft has positioned Azure for hybrid cloud from the first. They have an application-and-server presence in the market, a strong developer community, and a set of tools that were designed to create a seamless hosting framework across both Azure and Microsoft’s Windows Server platforms.
When Microsoft CEO Satya Nadella was introduced on their earnings call last week, his very first comments on technology were directed at Microsoft’s development credentials: “In a world where every company is a software company, developers will play an increasingly vital role in value creation across every organization….” If anyone doesn’t see that the future of the cloud is in cloud-native development after reading that transcript, they’re delusional.
Microsoft’s big AT&T deal is another important point in their favor. For a telco, a relationship with a cloud provider is most likely to mean a desire to build a business in public cloud services to enterprises, something symbiotic with their networking business with the same customer base. Microsoft can bring a lot to the table in that space, and Microsoft is also viewed as less of a threat to longer-term telco business goals than either Amazon or Google.
IBM had some interesting comments on their call too. “It is clear that the next chapter of cloud will be about shifting mission critical work to the cloud and optimizing everything from supply chains to core banking systems. This requires a hybrid multi-cloud open approach to provide portability, management consistency and security for these enterprise workloads. We’ve been building hybrid cloud capabilities across our business to address this opportunity and to prepare for this moment….” Then there’s this: “We continue to see good hybrid cloud growth this quarter as clients leverage our reliable and scalable IBM Cloud Private solution, built on open source frameworks like Containers and Kubernetes.”
Telcos like IBM too: “GBS is working with another leading telco provider to advise on their digital transformation journey to the cloud. As part of this, IBM will develop and manage a center of excellence that will power and enterprise-wide Red Hat Ansible implementation for hybrid and multi-cloud platforms. This will enable them to transform their product and technology organization support an agile DevOps culture for its developer teams, while moving its application portfolio to the cloud to reduce complexity and accelerate delivery in time to value.”
There’s surely some positive news for both IBM and Microsoft, but also some questions. For IBM, it’s hard not to wonder whether the company really has a broad hybrid cloud strategy. Their comments on their earnings call, unlike Microsoft’s, didn’t show the commitment to cloud-native development that I’d have hoped IBM would articulate, given Red Hat and Kabanero. For Microsoft, the risk of a player like IBM or Google defining a cloud-native deployment model is considerable, but they don’t seem to be pushing a cohesive model of their own.
The impact of all of this on networking also raises some questions. I’ve noted in past blogs that the telcos were on the fence with respect to “carrier cloud”. There is no question that were all the drivers of carrier cloud exploited, it could be the largest incremental investment in cloud data centers in the global market. However, there’s also no question that the telco community is among the least-prepared of all markets for cloud and cloud-native. They’d love to dip some toes in before they commit to a leap, and working with a public cloud provider they don’t see as a long-term threat could be a smart move.
Google has its own hybrid cloud aspirations, as its Anthos platform announcement has demonstrated. Anthos is explicitly a hybrid cloud story, one also based on containers and Kubernetes and leveraging other Google technologies like the Istio service mesh. In many respects it’s similar to IBM’s Kabanero, and that’s important because it might be an indication that the framework for building cloud-native applications is going to emerge in a way not specific to public cloud at all, much less to a single cloud provider.
Like Amazon. They’re a big wild card in all of this, and at present Amazon emphasizes the web services that can be used to support hybrid cloud more than a single platform/architecture to frame hybrid and cloud-native development. Amazon’s challenges in the hybrid space are formidable, despite what the media and Wall Street tend to say. Yes, Amazon is the cloud leader, but the majority of their revenue is not from enterprise hybrid cloud, it’s from content and social-media startups. Amazon has no real presence in the data center or engagement with IT organizations. Further, the last thing they’d want is an industry pushing a universal, portable, cloud-native middleware and toolkit model. Market leaders don’t like the idea of facilitating open migration among cloud providers.
“Don’t like” isn’t the same thing as “will never support”, of course. Microsoft’s Azure is growing faster than AWS, and if I’m right and the big public cloud opportunity for the next decade is enterprise hybrid cloud, then Amazon can’t surrender it. Amazon is no slouch in technology, and the need for a strong architecture and development model for hybrid cloud is so critical to the cloud, and to software evolution overall, that there will be plenty of benefits to drive competitive efforts.
We’ve been seduced by terminology, in a sense. “Migration” to the cloud implies that all that needs to be done is to relocate stuff. That’s never been true. The cloud is a different hosting model, a different networking model, and it needs a different development model. We’ve ignored that truth and by doing so we’ve slowed the adoption of cloud technology by limiting the benefits available to justify its use. What’s happening now—finally—is that we’re framing that new cloud-native model. It doesn’t change the business rules of technology transformation, so benefits are still necessary to drive change. It does provide a path to those benefits that more and more developers will be able to follow.
A final point here is in order. Microsoft’s statement “In a world where every company is a software company….” joins in my view the “The network is the computer” quote of Sun’s John Gage as the most profound and predictive comments of our age. Gage’s comment in 1984 should have been the starting point for the cloud era, but somehow it caught on as a slogan and not as a transformational mission. And as Nadella said, today every company is a software company because software is the glue that binds technology to human experience.