INSUBCONTINENT EXCLUSIVE:
Let start with a basic premise that the vast majority of the world workloads remain in private data centers
Cloud infrastructure vendors are working hard to shift those workloads, but technology always moves a lot slower than we think
That is the lens through which many cloud companies operate.
The idea that you operate both on prem and in the cloud with multiple vendors
is the whole idea behind the notion of the hybrid cloud
It where companies like Microsoft, IBM, Dell and Oracle are placing their bets
These died-in-the-wool enterprise companies see their large customers making a slower slog to the cloud than you would imagine, and they
want to provide them with the tools and technologies to manage across both worlds, while helping them shift when they are
ready.
Cloud-native computing developed in part to provide a single management fabric across on prem and cloud, freeing IT from having two
sets of tools and trying somehow to bridge the gap between the two worlds.
What every cloud vendor wants
Red Hat — you know, that
companythat was sold to IBM for $34 billion this week — has operated in this world
While most people think of the company as the one responsible for bringing Linux to the enterprise, over the last several years, it has been
helping customers manage this transition and build applications that could live partly on prem and partly in the cloud.
As an example, it
has built OpenShift, its version of Kubernetes
As CEO Jim Whitehurst told me last year, &Our hottest product is OpenShift
People talk about containers and they forget it a feature of Linux,& he said
That is an operating system that Red Hat knows a thing or two about.
With Red Hat in the fold, IBM can contend that being open source; they
can build modern applications on top of open source tools and run them on IBM cloud or any of their competitors, a real hybrid
approach.
Microsoft has a huge advantage here, of course, because it has a massive presence in the enterprise already
Many companies out there could be described as Microsoft shops, and for those companies moving from on prem Microsoft to cloud Microsoft
represents a less daunting challenge than starting from scratch.
Oracle brings similar value with its core database products
Companies using Oracle databases — just about everyone — might find it easier to move that valuable data to Oracle cloud, althoughthe
numbers don&t suggest that necessarily happening (and Oracle has stopped breaking out its cloud revenue).
Dell, which spent $67 billion for
EMC, making the Red Hat purchase pale by comparison, has been trying to pull together a hybrid solution by combining VMware, Pivotal and
Dell/EMC hardware.
Cloud vendors reporting
You could argue that hybrid is a temporary state, that at some point, the vast majority of
workloads will eventually be running in the cloud and the hybrid business as we know it today will continually shrink over time
We are certainly seeing cloud infrastructure revenue skyrocketing with no signs of slowing down as more workloads move to the cloud.
In
their latest earnings reports, those who break out such things, the successful ones, reported growth in their cloud business
It important to note that these companies define cloud revenue in different ways, but you can see the trend is definitely up:
AWS reported
revenue of $6.7 billion in revenue for the quarter, up from $4.58 billion the previous year.
Microsoft Intelligent Cloud, which incorporates
things like Azure and server products and enterprise services, was at $8.6 billion, up from $6.9 billion.
IBM Technology Services and Cloud
Platforms, which includes infrastructure services, technical support services and integration software reported revenue of $8.6 billion, up
from $8.5 billion the previous year.
Others like Oracle and Google didn&t break out their cloud revenue.
Show me the money
All of this is to
say, there is a lot of money on the table here and companies are moving more workloads at an increasingly rapid pace
You might also have noticed that IBM growth is flat compared to the others
Yesterday in a call with analysts and press, IBM CEO Ginni Rometty projected that revenue for the hybrid cloud (however you define that)
could reach $1 trillion by 2020
Whether that number is exaggerated or not, there is clearly a significant amount of business here, and IBM might see it as a way out of its
revenue problems, especially if they can leverage consulting/services along with it.
There is probably so much business that there is room
for more than one winner, but if you asked before Sunday if IBM had a shot in this mix against its formidable competitors, especially those
born in the cloud like AWS and Google, most probably wouldn&t have given them much chance.
When Red Hat eventually joins forces with IBM, it
at least gives their sales teams a compelling argument, one that could get them into the conversation — and that is probably why they were
willing to spend so much money to get it
It puts them back in the game, and after years of struggling, that is something
And in the process, it has stirred up the hybrid cloud market in a way we didn&t see coming last week before this deal.
