Peter ffoulkes, Research Director for Servers and Cloud Computing
In the cloud ‘dating game,’ things are mostly positive for enterprise cloud consumers, and for cloud technology and service providers. From the consumer perspective, the good news is that there are lots of vendors to choose from. And from the providers’ perspective, the field is wide open, especially in the private cloud sector, which is expected to account for almost half of enterprise workloads in the next two years. But for the providers, attracting interest from potential users doesn’t necessarily translate into any meaningful evaluation by them.
The first bit of bad news for providers is in the public cloud IaaS market. Although AWS is the dominant IaaS vendor by a wide margin, only 8% of enterprise workloads are expected to be placed in this environment in the next two years, which represents a challenge not only for AWS, but for all IaaS vendors. The other bad news – for both consumers and vendors – is that the brutal reality of the market will result in mergers and acquisitions, and company (or divisional) failures. Choosing cloud technology or service providers is a high-risk game right now. It’s not for the faint of heart, and it requires the acceptance that there will be winners and losers.
For cloud vendors, the game’s afoot, but far from won
Perhaps the biggest surprise in this market is the difference between vendors that are considered interesting and those that are actually being evaluated for purchase or proof-of-concept projects. From the vendor interest perspective, the usual suspects – Microsoft, VMware and AWS – lead the chart, although OpenStack and its cadre of vendors – Cisco, HP, IBM, Red Hat, Rackspace and others – are more complicated to track. This should not be underestimated, and to do so could be perilous.
The standout finding from the vendor perspective is the outlook for VMware. Although neck-and-neck with Microsoft, and substantially ahead of AWS from the vendor interest ratings, when it comes to evaluation, VMware drops to third position at around one-third of the citations expressed for either Microsoft or AWS – which has to be cause for concern, not just for VMware itself, but its partner community.
Interesting as these vendor dynamics may be, they do not represent a reliable indicator of the final outcome of the cloud market vendor landscape. For cloud vendors, the game’s afoot, but the day is far from won, and changes of strategy and tactics could yield unexpected results.
Anecdotal commentary from our respondent community illustrates the disparity between cloud vendor positioning and enterprise consumer expectations:
- “Amazon and Microsoft are really focusing on enterprises now, so both have dedicated enterprise cloud sales teams. That’s something that’s new. There’s still quite a bit of ‘the whole world’s going to cloud, why aren’t you in cloud yet?’, that type of sales pitch. When in fact, that’s not the reality. There’s a lot of good business cases today for cloud, and there’s a lot of places where cloud is inappropriate right now. So some of the sales pitches just hype it, ‘Throw everything in the cloud, it’s all wonderful,’ and that’s just not the case yet.” – LE, Utilities
- “Vendor marketing is way ahead of what customers and clients are ready to get to. Not to single anyone out, we’re a VMware shop in many categories. We talk to them and they talk a lot about software-defined enterprise, the new – something software-defined. They say, ‘Well, you can do all these things, and we have products that do all of them.’ And we say, ‘Great. Here’s what we’re looking for.’ And you get, ‘We can do that as long as you read these 48 pages of fine print on things we can’t do.'” – LE, Services