Do you remember when Amazon was known mostly for selling books online, Google (News - Alert) was just a search engine, and Dell just built PCs? Dell recently acquired enterprise storage giant EMC, more evidence of a growing trend that companies, while still rooted in traditional IT infrastructure, are embracing the cloud.
Cloud computing has, without question, disrupted many established hardware and software businesses. Amazon, Google and Dell are only a few examples of companies that are building their businesses to capitalize on the trend and, in the case of traditional IT vendors like Dell, avoid fading into history. The prize is nothing less than the projected $52 billion in spending on cloud infrastructure by 2019. According to IDC (News - Alert), cloud infrastructure already accounts for about one-third of total IT infrastructure spend today.
There are clear examples of companies that failed to innovate and adapt as new technologies emerged: Digital, SGI, Cray and Sun among others. Even some of today’s tech giants like NetApp and the relatively young Riverbed come to mind. They’ve stayed too focused on their core business models and, now, the market has moved away from them so quickly that they haven’t been able to adjust and adapt. The rise of virtualization and the cloud have led to better alternatives and even eliminated the need for a specialized NAS or WAN optimization appliances altogether.
Other vendors, like EMC, IBM, Microsoft, Oracle (News - Alert) and VMware have been quicker to diversify and adapt their business models to the cloud. Even though some accuse these goliaths as being slow to evolve, each has all built a cloud business, either organically or through acquisition:
•Microsoft, which made its name in desktop and server software, has Azure, the second largest public cloud business after Amazon.
•IBM has a cloud portfolio that includes SoftLayer (News - Alert) and, now, Cleversafe. It’s also spun off much of its hardware business over the past few years.
•Oracle launched its own cloud initiative earlier this year and is beginning to move customers to its cloud as an alternative to deploying software on-premises.
•EMC is creating a cloud business by combining several technologies into the recently-acquired Virtustream, including VMware’s vCloud Air public cloud offering.
Which brings us to the recently announced Dell-EMC acquisition. As a combined company, the two have tremendous strength in the enterprise and will be able to offer public, private and hybrid cloud services. The Dell/EMC/VMware products are entrenched in almost every enterprise data center. They have access to the CIOs at many Fortune 1000 companies, and they have a potentially very strong set of technologies for the cloud age: VMware vSphere and vCloud, EMC’s cloud storage platforms, Virtustream’s cloud infrastructure, Pivotal’s software and of course, Dell’s expertise in servers.
Though Dell-EMC has a foot in the doorway to the CIO’s office, they’re facing a set of strong competitors, like Amazon, Microsoft, and Google, all of whom have a significant head start in public cloud. Amazon has massive scale with over 90 datacenters and millions of servers; it also has a huge customer base of departmental and developer deployments. Analyst firm Gartner places Amazon well out in front of the pack in its reports, but it’s far from alone.
Each provider approaches the market with specific strengths. Alibaba, for example, built a massive IT infrastructure for its retail infrastructure in China (much like Amazon), and is now expanding internationally. Microsoft and IBM (News - Alert) are competitive in enterprise accounts. More companies will enter the market, either through organic investments or acquisitions. Others will exit or re-focus their efforts, like HP did.
As the cloud continues to dictate the trends and infrastructure of enterprise IT, it’s clear that the changes in Google, Dell, Amazon and others are just the beginning. The EMC-Dell acquisition tells us the Cloud Wars are far from over. In fact, they’ve only really just begun.
Edited by Maurice Nagle