The marketing message for January’s Cloud Expo Europe 2013 at Olympia was ‘Unlock the Cloud’. I spent my first day at the Expo chairing the Cloud Industry Forum (CIF) Knowledge Network Theatre, and most of the second visiting exhibitors’ stands.
Personal conclusion? There’s little real evidence of business unlocking the cloud as we are still, in reality, in its early construction stage. But it’s early enough to see some very real issues now taking shape that I will address here – leading to a serious, possibly radical, proposal.
In 2011 Forrester published forecasts for the Global Public Cloud Markets 2011-2020. A key feature of these forecasts was that the early strong growth foreseen in infrastructure and platform services would soon be overtaken by surging markets in software delivered as services and in apps. There is a logic here – once infrastructure and platform services are available, innovation in services and apps is enabled and should flourish, as it demonstrably is.
But the vast majority of the exhibitors at Cloud Expo 2013 were not in software services and apps businesses, but infrastructure, platform and related businesses. As a number of commentators observed, ‘this Expo is about tin’.
But the construction stage of the cloud is not only about the tin – it is also of the new business models that are emerging to help commercialise that tin. One key presentation in the CIF session was by its chairman, Andy Burton, of research into the critical role of channel in driving cloud adoption. Based on a survey of some 150 managed service providers, systems integrators and technical VARS, it details the key features of the commercial channels that effective market operation now require. A broadly parallel set of insights were shared by Olivier Maes of Citrix, drawing on experience of some 200 cloud deployments.
But interesting as these analyses and insights are, they relate still to the mere foothills of the transformational journey into the cloud. Real and very jagged mountains line the horizon – the actuality of the fundamental disruptions that lie ahead are still to be properly addressed. And if you are a contemporary CIO that actuality may well include the challenge of complex legacy systems that eat up 80% of your operational resources.
The ‘tin construction’, deep operational experience and highly competitive economics built by the likes of Amazon and Equinix makes it clear that whatever their current attitudes, most enterprises and governments will fully migrate their operations into the public cloud within a few years.
In practice this is a development comparable to the Big Bang deregulation that so radically reworked the commerce of the City of London in October 1986.
Are today’s CIOs stepping up to this challenge? The opportunity is to sharply reduce operational costs, break the restraints of legacy and reposition IT resource out in the marketplace, working close to clients where the real competitive battle is fought. But it requires a determined Big Bang transformation.
There is a parallel need for similar Big Bang transformations in the vendor community, and Dell looks to be taking the lead. Michael Dell’s $24.4 billion buyout and re-privatisation will enable the overdue transformation of its business models away from the glare of the financial markets and the restraints of quarterly reporting. The private equity investor is said to be Silver Lake Partners.
There is now an opportunity for private equity to invest in similar fashion to enable both Big Enterprise and Big Government to shape and deliver parallel Big Bang Cloud-based operational transformations. Such investment moves would be very different from the so-called transformational 5-to-10-year contracts traditionally signed with IT vendors.
Control would remain with the enterprise, the CIO and the equity investors: funding would be vendor-neutral and its effective use could be guided by a small coterie of suitably experienced ex-CIOs. The objective would be the competitive transformation and repositioning of the organisation’s operations in the cloud – the choice of vendors now being fully objective.
Building the cloud is in progress – not just the ‘tin’ but radically transforming market and vendor business models. Full marks to Dell for grasping the bull by the horns. Unlocking the cloud is now the CIO’s prime challenge, requiring equally radical transformational action – perhaps also in partnership with private equity?