It's clear why AWS wins in public cloud. What's less clear is why old-school vendors also have a shot at the cloud cash.
It may be true that public cloud is the future of enterprise IT, but it's also true that it's going to take a long, long time to get there. Given that grown-up enterprises still have mainframes kicking around, it's simply too much to expect CIOs to shed legacy systems in favor of modern clouds.
Not that they wouldn't prefer to do so.
In fact, as CIOs chase greater business agility, public cloud remains a top-three priority, with cloud-savvy vendors like Amazon, Microsoft, and Salesforce expected to get the biggest bumps in IT spending, according to a recent Credit Suisse IT executive survey. The real question isn't whether public cloud will collect cash, but whether developers or CIOs will steer the spending. In the rush to deliver on the promise of hybrid cloud, both new-school and old-school vendors stand to win big.
Hybrid by birth
It's unlikely that any enterprise truly aspires to have hybrid infrastructure. Dealing with on-premises and in-the-public-cloud resources makes IT management, not to mention security, more complicated. However much developers may push forward the case for public cloud, one workload at a time, existing applications remain stubbornly earthbound. As noted in recent Credit Suisse research ("IT Hardware Initiation: Entering the Goldilocks Era of Cloud"), "A hybrid-first approach brings together the best of both worlds; customers get the agility and flexibility of the public cloud, while integrating with the 80% of workloads that have yet to migrate."
Yes, 80%. Incidentally, it's also not the case that workloads only go one way (toward public cloud). As noted by analyst firm IDC, the "vast majority" of enterprises have "repatriated" some of their public cloud workloads to private cloud data centers.
And yet...CIOs currently spend less than 10% of their IT budgets on public cloud, while 35% of those surveyed by Credit Suisse project this percentage to balloon to 30% within the next three years. So while private cloud remains a rich vein for legacy (and new-school) vendors to mine, that target will get smaller each year. There's simply too much velocity value to be gained by moving to the cloud. Even so, 48% of IT executives surveyed by IDC would still invest in on-premises infrastructure given the chance to start with a "blank slate," and 60% of IT spend will still be dedicated to traditional IT and private cloud by 2022.
Confused? Don't be. The simple truth is that there isn't a one-size-fits-all answer to enterprise IT. By its nature, IT is messy and varied. Equally messy and varied are the groups driving these different approaches to IT.
Developers and CIOs
While Redmonk's "Developers are the new kingmakers" can be an overused phrase, it's absolutely true that developers wield growing influence within the enterprise. It's also true that developers tend to vote for convenience, which leads them to open source and public cloud. In a developer-driven future, public cloud providers like AWS and Google gift them the chance to get work done while paying a minimum bureaucracy tax.
Given the hybrid reality of enterprise cloud deployments, however, the CIO hasn't become a non-entity in cloud decisions—far from it. She continues to wield clout (and budget). For the CIO, "convenience" often derives from working with well-established vendors, particularly those (like Microsoft and, soon, IBM/Red Hat) that have a strong public cloud story to match their traditional IT credentials.
SEE: IT budgeting: How to do it right (free PDF) (TechRepublic)
In short, if we ask, "Who will win, developers or the CIO/IT?" the answer is a resounding "both." And, as such, with so much opportunity and cash in play, we will see both new-school and old-school IT vendors win big. Among these, Microsoft, in particular, stands out, given how strong it is in both traditional IT and public cloud. Small wonder, then, that of all the IT vendors, IT executives single out Microsoft as the company they intend to most increase spend with in the next year, according to Credit Suisse research. AWS comes in second.
- Hybrid cloud: A cheat sheet (TechRepublic)
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- Executive's guide to the software defined data center (TechRepublic download)
- Developers now control a big chunk of enterprise budgets; here's how to reach them (TechRepublic)
- 2019 IT Budget Research Report: IT spending increases due to business conditions, security, and revenue opportunities (Tech Pro Research)
- US government has 12,166 data centers and most are inefficient: Can hybrid save the day? (ZDNet)
- The data center is dead: Here's what comes next (ZDNet)
- Best cloud services for small businesses (CNET)
- DevOps: More must-read coverage (TechRepublic on Flipboard)