Cloud computing has become an important element of every enterprise IT provider’s business strategy and it is long past time to treat “a cloud [as] water vapor,” as Oracle CEO Larry Ellison famously said in 2009. Even Oracle is now well-entrenched in the cloud war through both acquisition and internal initiatives. Microsoft, IBM, SAP, and every other established player in the enterprise IT space is heavily invested in cloud technology and/or cloud “marketecture”. And then there are the many smaller players “born in the clouds”, a small number of which have gone on to become large enterprise IT providers in their own right, such as Salesforce.com and Google.
In 2008 it was hard to envision just how much difference a few years would make. Back then, the biggest players in serving the most needs of the enterprise IT market, and with the best prospects for future growth, were dominated by packaged software, data center infrastructure, professional services, and managed hosting. At the time, the only companies truly qualified to be considered enterprise IT generalists were IBM and HP – with Oracle in the on-deck circle, with its soon-to-be-announced acquisition of Sun. Not that these were the only important enterprise IT companies – far from it – but clearly they were the ones with the largest share of wallet in existing customer accounts, they were the ones serving the broadest set of needs, and clearly they were the ones with the best prospects to grow customer spending over time.
What a difference a few years makes! The emergence of what Gartner today calls the “Nexus” of forces – cloud, mobile, social, and information – has radically altered the size and scope of the battlefield upon which the IT leaders make war upon each other. Hardware and traditional managed hosting are becoming less important as enterprises realize that they don’t really want to own IT capital assets, and they don’t really want to deal with the plumbing issues associated with managing infrastructure. Business leaders are rediscovering that the reason they chose to build data centers and fill them with expensive shiny boxes is because they want the business value associated with the processes running there. CIOs are being told to drive business value and shift away from the day-to-day tactics of cost optimization. It isn’t happening all at once but the change is now obvious and inexorable. In “Vendor Roulette”, which Ray Valdes and I presented at Gartner Symposium/ITxpo in 2011 (and which we presented in a slightly different form with our colleague David Mitchell Smith in 2010), we postulate that the industry structure is shifting away from the 2008 picture, and toward something that looks more like this.
We are seeing the beginning of business strategies that align with the vision of the future enterprise IT industry structure we articulated in Vendor Roulette. Today’s announcement of Canopy - a joint venture between Atos, EMC, and VMware – is a fine example. Combining cloud platforms with professional services is a key step in the maturation of the cloud services market. While I don’t know enough about Canopy to know if the company will succeed, I am excited to see more examples of organizations whose stated business strategy aligns so well with what Gartner has been saying for several years. I believe we will see further examples in the near future – and that companies from Salesforce.com, to Microsoft, to Oracle, and beyond, will make professional services a key ingredient in the cloud services recipe.