The use of the cloud is not governed by technology so much as it is governed by cost: the cost of on-premises management, support, expertise, and environment vs. the cost of cloud services and outsourced expertise, management, etc. The cost differential must be high enough in the short term to allow it to become valid in the long term. There are lots of cloud calculators out there. Since Apple, Dropbox, and others have changed clouds or moved to their own data centers, what does this tell us about the future of cloud?
Oracle has entered into an agreement to purchase Ravello Systems, which will be part of Oracle Cloud’s IaaS mission. This is an interesting purchase in many ways, one that boosts Oracle’s IaaS environment. However, Ravello Systems offers a bridge between multiple clouds, and that does not jive with Oracle’s historical approach to business. This opens up many questions, and really makes the purchase look like Oracle has bought a hybrid cloud. But is that all it bought?
There seems to be a trend of providers abandoning the commodity public cloud market. We saw HP exit its Helion Public Cloud, and more recently, Verizon shut down one of its Infrastructure as a Service (IaaS) products. At the same time, we see Amazon and Microsoft heavily committed to public cloud and making a lot of money. I think there is a fundamental difference between what the successful cloud providers and the commodity VM providers offer. The big difference is that successful cloud providers sell mostly non-commodity services. They sell services that are not available elsewhere. The value proposition for AWS and Azure is not really in running your VMs. It is in offering services that your applications, or users, can consume. These cloud services are consumed by application developers: information systems people rather than information technology. They lock in customers by delivering unique and valuable services. They have a low cost of entry to entice customers and a high cost of exit to retain customers.
We often talk about utility computing in the cloud, but it can be on-premises too. I like to think of utility from the point of view of the consumer. By concentrating on what the customer experience looks like, we get to avoid pedantic discussions of what is a commodity and what is a cloud. Electricity supply is the usual utility example. Can we get that same experience for computing?
I recently read Steve Beaver’s thoughts on 2016 here on TVP. Naturally, Steve had plenty of great things to say, but it was what he had to say about the end of managed services that got me thinking. Does the rise of cloud services really mean that managed service providers (MSPs) are the new walking dead of IT? (My words, not Steve’s.) Personally, I don’t see that. I still think that many customers will need help to make cloud services work for their business. I suspect that there is a corollary to the Jevons paradox: as (cloud) services get easier to consume, customers will require more help to consume more of them.
The end of 2014 is here, and it’s time to look forward to 2015. It is that time of year when we make predictions about what the future may hold. Here are are my thoughts on what we should be watching for in the coming year.