Cloud is Disrupting Everything…And That’s Okay

There was quite a bit of cloud news last week centered on an established IT company jumping into the cloud and continued pricing wars for cloud services, including infrastructure. Pundits weighed in on what this means to the competitive balance and economics of the cloud with widely disparate opinions. The reason for this, I believe, is the naturally disruptive nature of cloud for enterprises and the IT companies that have traditionally supported them.

We are really starting to see the impact of cloud on these companies, particularly the hardware vendors – blade servers, storage, switching equipment, etc. They are slowly coming to terms with the fact that the game is changing. Enterprises are realizing that they really care about the outcomes and the services, and not so much about the infrastructure required to get there. The cloud allows enterprises to focus on the applications and their services versus spending money and time on non-differentiated work.

The other disruptive aspect of cloud is that it lowers the barriers for new technologies and small companies to deliver capabilities to large enterprises – where once IT had supreme control of the gateway to a company, and by extension the established players could thwart any entrant by denying access to floor space, power, and network connections. With cloud, those barriers are much harder to enforce and the power and access into the enterprise can extend beyond just IT. Cloud services are purchased and used by folks in marketing, finance, etc. This is a very positive outcome for the enterprise and for innovation, but has a significant impact on the IT incumbents.

If you look closely, every traditional IT company is turning into a cloud provider: Microsoft, IBM, and now Cisco. These companies are responding to direct request from their enterprise clients but they are also recognize they cannot support the needed growth with hardware sales in the face of lower priced competitive hardware and the tidal wave of cloud.

What often gets overlooked, I suspect even by these companies as they make the decision to move into the cloud, is that becoming an IT service provider is hard. Running cloud services is difficult, often unglamorous work – operating data centers, providing 24/7 service and support, managing SLAs, etc. These are not easy tasks and often a huge part of the cost in providing the end service. This is why we have opened our next generation cloud platform to a variety of IT providers. Our idea is to provide the cloud infrastructure upon which these traditional technologies, converted to cloud services, can run. A cloud technology ecosystem for enterprises that gives them the ability to select and use the IT services they need.

Our vision is one where the customer is in control and is able to use the IT services they need – from different providers, cloud/hybrid/on premise, etc. – to support their business. We want to be the foundation for that future but there are opportunities for a number of services and service providers. We’re working with several and will be discussing the future of enterprise cloud technologies with some of these companies this week at Interop. I will be moderating a panel titled “The Enterprise Cloud Ecosystem” and will be joined on stage by Phil Brotherton, vice president, cloud solutions group at NetApp, Amr Awadallah, chief technology officer for Cloudera and Joseph Rayman, vice president, engineered systems with Oracle. The panel will take place at 4pm on Wednesday, April 2 in Mandalay Bay Meeting Room I. If you’re planning to be at Interop, please stop by and share in the discussion. If you can’t make it to the event, you can read what NetApp and Oracle have to say about enterprise IT and cloud via posts on our Enterprise Cloud blog. Additionally, we will be filing daily reports from the conference on our News Center.