Weekly Update

What Public Clouds and Walmart Have in Common

Within the last 30 years we saw a change in retail within suburban and rural areas.    Where once we had hundreds of “Mom and Pop” stores where households purchased the necessities of the week, we now have one stop and cheaper shopping at Target, Costco, Walmart, and a few other discount department stores.   Walmart remains king.

The fall of the smaller retailers was big news a few years ago.   However, today it’s accepted that Walmart is the common destination for the weekly shopping trips.   While there are small battles around Walmart moving into some neighborhoods that still occur, it’s clear that they have won the war.

The idea behind the rise of Walmart is sound.    People have needs, and they are likely to go to the entity that can meet those needs quickly, and charging the least amount of money.

In 2012 we saw the rapid growth of public cloud computing.   This year will certainly be another growth year for the public cloud, and the migration will continue for years-to-come.

This growth is largely fueled by the desire to get systems up and running quickly, and thus better meet the needs of the business.    While we like to think that the movement to public cloud-based platforms is largely driven by enterprise IT, it’s more likely a result of an urgent need from within a business unit that drives the use of a public cloud.   In some cases working around IT altogether, which is causing the rise of “shadow IT.”  This means business units taking matters into their own hands, and building new systems using public cloud resources and a credit card.

Enterprise IT has responded by creating their own cloud computing strategies, which are typically based on the use of private clouds.     Indeed, the first major cloud computing projects within the Global 2000 are typically based on the use of internal IaaS cloud platforms.   While public clouds are a part of the strategy, they are not to be found at all initially.

Enterprise IT sites security and regulatory concerns as the drivers behind the use of private clouds.    More often it’s about control.    Of course, there are those innovative IT shops that leverage and promote the use of public clouds.    They are still in the minority.

Public clouds are indeed taking on the role of Walmart.   They provide a cheap alternative to internal system development and hosting, and have much of what the business needs today in inventory, on-demand.    It’s quick, easy, and available right now.

Thus, public clouds are taking business away from enterprise IT who are moving quickly to build smaller local resources (private clouds) in response.   However, they won’t be able to build fast enough to remove the demand for public cloud services, nor can they compete with the low price.   Business will drive towards success using any resources that will make them successful.

Of course enterprise IT can push back on public clouds, much like local businesses push back on Walmart when they are moving into town.   In both cases, using local politics.  For instance, organizing to deny Walmart the necessary permits.   Or, in the case of enterprise IT, they establish internal governance and security policies that deny the use of most public cloud computing services unless authorized by IT.

The end result is much the same for both local businesses fighting Walmart and local enterprise IT fighting the public clouds.     If there is clearly a need, and the resources are available, those that will benefit from solving the problem will find and leverage the resources they need to solve the problem.      If that’s a database service from Amazon Web Services, or a power drill from Walmart, it’s all pretty much the same.

I suspect that much like Walmart has become a fixture in most of America these days, public clouds will become a common resource for large enterprises over the next few years.    Many enterprise IT shops will fight the use of public clouds, with many by attempting to build their own private clouds.   However, they will ultimately have to coexist.