So far this month, Amazon Web Services, Google and Microsoft’s Azure cut the prices on their cloud storage offerings. These three companies are part of a big change that is sweeping the business world — instead of buying their infrastructure by spending millions of dollars upfront, the companies are now getting comfortable with the idea of paying for their needs as they go along.
The CEO of StorSimple Ursheet Parikh gets it. Forgive me for quoting someone who is quoting me, but it’s a point that should be shouted from the rooftops, and right now, there aren’t a lot of people shouting.
“At the Ignition Partners event in Seattle yesterday, I asked Om Malik what he thought happens to the storage business in this cloud transition. Om’s response was that the $50 billion of gross margin in enterprise storage is ripe for disruption with the transition to Amazon and (Microsoft) Azure. He added that storage will move from the capex towards the opex model and predicted that the major incumbent storage vendors will need to enter the market with their own storage services soon (the next 12 months). What Om has summarized so succinctly will have a profound impact on the storage business.
“It is also interesting to see the independent verification of the trend that we’ve seen in the last 3 months with a range Fortune 1000 enterprises across verticals like retail, oil & gas, manufacturing, services, consumer goods, healthcare and banking as well as government customers who have done their first deployments on public clouds using StorSimple.” (Ursheet Parikh, CEO, StorSimple)
We are going through ‘service-ifcation’ of everything, and as a result we will see companies’ IT capital expenditure becoming ‘operational expenses.’ This capex to opex trend will redefine the servers and storage markets. No, that doesn’t mean that Dropbox or Box.net will rule the planet – far from it. However, the traditional storage companies will have to come up with product offering to match their “opex” models.