If you want a cogent — and hilarious — assessment of the state of cloud, take a look at Charles Fitzgerald’s latest blog post “A dispatch from cloud city — 2014 retrospective.”
Fitzgerald, managing director of Platformonomics, a strategy consulting firm, has an incisive take on how legacy IT powers — Cisco, [company]HP[/company] (HP Enterprise?), IBM, Microsoft and others are performing in what HP CEO Meg Whitman would probably call a “multi-year transformation.” Fitzgerald, formerly an exec at [company]Microsoft[/company] and [company]VMware[/company], assigns each legacy vendor a “delusion factor” to indicate how its stated view of its position in cloud contrasts with reality.
The whole post is worth reading, but here’s what I found most interesting
(Sorta) kind words for IBM:
Fitzgerald is not a known lover of Big Blue, so his acknowledgment that [company]IBM[/company] woke up last year and no longer attributed its current situation to “simply poor execution of ye olde business model” constitutes high praise.
He is also “amused that IBM’s leadership has expressed far more public concern about their prospects than the normally curmudgeonly IT industry analysts and pundits who evidently are telling IBM’s customers not to worry about generational transition risk.”
Given these more realistic assertions by management, IBM gets a “low” delusion factor. Overall, however, Fitzgerald doesn’t see a way for IBM to dig itself out. Even if all things go the best possible way, IBM will still be “a dramatically smaller company (in terms of revenue, workforce and stock price) due to the deflation of cloud computing,” he wrote, adding:
IBM’s fundamental problem is it is their traditional customers who are being disrupted by technology wielding upstarts and they are going to have to show customers can actually use IBM technology and ‘business consulting’ to be successful against competitors who don’t have that burden.
Cisco’s world of hurt
Cisco is the company with the biggest gap between reality and their own cloud blather. While they are one of the few growing server vendors, their reckoning approacheth on multiple fronts. Delusion factor: highest
I agree here, too, although I would love to see what the Metacloud folks bring to the table for Cisco. One big problem — the world really doesn’t need umpteen different OpenStack-labeled clouds, and in terms of mind share, Cisco isn’t at the top of the list.
Google is not cloud-serious
[company]Google[/company], with Google Cloud Platform, isn’t a serious contender in Fitzgerald’s view because cloud remains a lark to the internet search kingpin. Per the blog post:
In technology terms, they are in many respects the leader, but they’re just not serious about the non-technology investments they need to make to really compete for that broad enterprise transition to the cloud (they too need to embark on an ‘enterprise journey’ as opposed to hoping those enterprises beat a path to their door).
Here, I disagree — although I get that upper Google management (meaning the two top guys) does seem more interested in futuristic endeavors like self-driving cars. But Google appears to be very serious about its cloud efforts, bringing on high-profile hires like former Red Hat CTO Brian Stevens — and nothing says enterprise like an enterprise Linux guy. It’s also offering big incentives to use GCP (as opposed to AWS). Google’s cloud also now supports the Windows server applications that are widely used by large businesses. And analysts tell me that enterprise accounts are indeed very interested in GCP.
Two legacy IT giants are conspicuous by their absence in this post. I would very much like to hear Fitzgerald’s take on Oracle and VMware — although he mentions the latter in passing as a possible acquisition target for HP. I’ve reached out to him on this and will update with his thoughts.
Update: And here it is. Fitzgerald’s take is that many Oracle customers would like to move on to someone else in cloud. His language is far stronger than mine but the gist is he doesn’t see Oracle winning new converts with its cloud offerings and its existing customers aren’t so thrilled either. (To be fair, there’s countervailing evidence in a new CIO survey that shows Oracle’s cloud sales pitch may be having an impact.)
But more to the point, he said despite Oracle Co-founder and CTO Larry Ellison’s assertions to the contrary “the cloud isn’t being built with Oracle software. The question is how long before that begins to bite.”
As for VMware, where, as noted Fitzgerald spent time, the question is trickier. “They have a pervasive enterprise infrastructure footprint and an opportunity to build on that as a broad private IaaS looks increasingly far fetched. But they haven’t seized on that the way they could,” he said via email.
On both counts I also agree. Oracle customers — admittedly not CIOs but IT pros — tell me they would very much like to lessen, not increase their reliance on Oracle. The reason? Oracle’s hardball licensing and pricing policies.
And anecdotally speaking I just see little traction for vCloud Air.
AWS goes corporate
Market leader Amazon Web Services gets kudos for “incredible execution” as it pushes up the stack and emulates Microsoft’s similar “enterprise journey” 20 years ago. But Fitzgerald also sees clouds on the horizon as corporate parent [company]Amazon[/company] chases hardware “misfires” and TV programming. And all those efforts contribute to the company’s swooning share price, which, I would agree, cannot be ignored forever.
If Amazon’s stock price doesn’t recover, expect their employee retention problems to grow and discussions of spinning out AWS to get more serious. But they’re not going to yield their leadership in 2015.
Note: This story was updated at 7:19 a.m. PST January 7 to add Fitzgerald’s take on Oracle and VMware in cloud.