AWS rightly gets kudos as the dominant cloud vendor, but there is just enough competition to create the need for a second big cloud winner—which could be Red Hat.
In picking winners in the cloud wars, Amazon Web Services (AWS) is the most obvious choice. As the resident hegemon, it's hard to argue with a company that has accelerated its growth over the past two quarters on top of a run-rate that dwarfs that of all other vendors...combined.
No, this doesn't mean that Microsoft Azure and Google Cloud Platform (GCP) are doomed—each is carving out differentiation that should see them scoop up market share and billions in revenue to go with it. However, it's precisely the viability of multiple clouds that introduces another, less obvious winner: Red Hat. As public cloud services make the reality of enterprise computing even messier, Red Hat has stepped in to offer a way to have your hybrid cloud cake and not get eaten by it, too.
Evolution of hybrid cloud
Hybrid IT environments aren't necessarily a strategic choice, as much as vendors used to present them as such. No, hybrid is simply what happens to any company that has been around for any appreciable length of time. Mainframes seem silly for modern workloads, but once upon a time they were state of the art. Indeed, nearly all IT choices likely made perfect sense at the time they were made. They only seem ridiculous as technology evolves.
SEE: Cloud migration decision tool (Tech Pro Research)
Technology evolves, but enterprises remain saddled with yesterday's state of the art (aka "legacy") systems. As such, it can be simultaneously true that enterprises are rapidly embracing new things like serverless, even as they slog through old things like their "ancient" Java apps. Pivotal's Richard Seroter nails this:
We're talking new paradigms, not new-tech-eating-old. I spent hours building Functions last week. I'm not refactoring old apps, I'm creating new event-driven things. If you talk to enterprises, you see the more realistic journey ahead.
Here's how Red Hat president Paul Cormier has expressed it:
[T]he rise of public cloud services provides innovation that far outpaces the enterprise capacity to consume it. Coupled with legacy hardware, sprawling virtualization deployments, and existing private clouds, organizations are faced with what seems like a binary choice: desert millions, if not billions, of dollars in IT investments or get left behind in the dust clouds of innovation.
Though public cloud was initially presented as a "binary choice" between the future and legacy, the cloud vendors have softened this over time, with Microsoft Azure particularly adept at spinning a hybrid story. Red Hat, however, takes this even further, because Red Hat, unlike Microsoft or any other public cloud vendor, can afford to tell a cross-cloud story.
Indeed, as analyst Torsten Volk highlighted, one big takeaway from the recent Red Hat Summit is that "Everything always runs on any cloud" with Red Hat. "The fact that each and every demo always ran on AWS, GCP, and Azure shows that Red Hat is serious about spanning OpenShift across each," Volk said.
Making money from chaos
In other words, Red Hat is now doing the same thing with cloud computing as it once did for open source: Bringing order to chaos. The Red Hat business model has long depended on complexity: The more moving parts in a given open source project (e.g., Linux), the more value Red Hat provided by offering a stable, certified version of it. To the extent that cloud computing is a straightforward affair of buying from one dominant hegemon (e.g., AWS), Red Hat's place can still be important but is minimized.
In a world of true cloud competition, however, with three viable contenders and a morass of different cloud services, Red Hat has an important part to play "to provide portability and consistency across hybrid and multicloud environments, as well as the additional architectural components that are necessary to preserve state externally across function invocations, such as integration with an API gateway to expose functions as APIs or call external services, an in-memory datastore for faster data access, storage and file systems, user authentication, and more,"Red Hat senior director Rich Sharples said.
To be sure, it's not at all clear (yet) just how Red Hat will smooth out the reality of data living in different clouds. Red Hat can provide workflows that span the different clouds, but if my data lives in AWS because I'm married to AWS Lambda, that data stays with AWS. Rishidot analyst Krish Subramanian rightly calls out that "It comes down to data lock-in." You can, in other words, build the "glue" above the disparate clouds' data services, as Iguazio founder Yaron Haviv has noted, but truly delivering a hybrid cloud remains messy.
Which leaves us with two primary cloud vendors: AWS and Red Hat. AWS, because it offers the widest breadth and depth of cloud services, generating massive gravitational force that keeps calling developers to default to it. And Red Hat, because it can combine its winning datacenter strategy with the cloud, helping enterprises deal with the inevitable messiness of their hybrid, multicloud realities.
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