So Cloud is about infrastructure, you say?
I am always amazed at how fast new concepts or topics get pigeon-holed into the same old discussions we have had for decades. Now it’s Cloud Computing’s turn. Since dealing with new things can be disruptive, IT organizations, and people in general, always seem to be looking for something they can recognized before doing anything new. In the cloud world, this has spawned multitudes of discussions about Private clouds and infrastructure as a service and cloud platforms to replace on-premises platforms. Good stuff – as far as it goes.
What gets to me is when people stop there they don’t seem to realize that they are placing themselves on the same treadmill that the Telco providers have been on for those same decades. Problem is, the treadmill is moving faster backward than you can walk forward. Cloud infrastructure is a means to an end, not an end in itself. Sure you can get great value by either adopting or selling cloud infrastructure for next-generation applications. But, there are diminishing returns on that investment. If you are a provider of this infrastructure either in the public sense or in the private sense, you may find that your ability to use it to differentiate erodes faster than sand on a Florida beach. As a vendor of cloud infrastructure you must be afraid of what happens when IBM really wakes up alongside HP and a host of others – some of them new. Opsource competes with Amazon, competes with IBM, competes with Microsoft – all for the same dollar to host cloud infrastructure for businesses that have already determined that owning infrastructure is not usually a differentiating value proposition for them.
So, how many phone companies do we need – figuratively speaking? How many cloud Infrastructure providers will there be room to support? I say a lot at first – then a rapid decline in a bout 5 to 7 years. If you are still in this game at the level of infrastructure by then, you better have Google, IBM, or Amazon stapled to your butt.
So what is the answer for making sure you do not get commoditized into just a pipe (or platform)? It’s simple – get closer to the customer in the value chain!! When you are an infrastructure business in a commoditizing paradigm like cloud computing, you don’t want to be at one end of the pipe while your customers are at the other. And, you don’t want to be one of hundreds of vendors who say their customers are the ones who serve customers. That is a recipe for a repeat of the Telco dilemma. Oh, and the telcos are trying to get in the game too.
But the ones who have the real advantage are those who will either hold the hand of the customer (consulting, or who add value on top of the infrastructure services (e.g. more performance or security or additional services). In addition, there is a lot of room for sourcing companies to turn to cloud as a way of continuing to be important. Business process outsourcing is an opportunity. And what of systems integrators? Well, there is an opportunity here too. When people need to move data between services or to migrate entirely from one service to another, the new breed of systems integrators should be ready.
Ok. These are just musings on the dilemma of changing market needs and approaches but it is something to think about.
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