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Gartner's Magic Quadrant 2014 For Cloud: Winners & Losers

Gartner's annual graphic of competitive positioning among tech providers reflects challenges for Rackspace, Dimension Data, and some other vendors.

the company has not been able to keep up with the pace of innovation in the overall market.

Dimension Data has used its NTT parent's networking capabilities as a differentiator, but almost all cloud providers have been able to match strong networking availability in their data centers at this point. While the company may add differentiators in the future, Gartner concluded, its ability to innovate depends on NTT maintaining a hands-off, non-interference style of ownership.

VMware didn't appear in the cloud computing Magic Quadrant last year. This year it's included among the Niche players, thanks to the launch last September of its vCloud Hybrid Service. The service offers a solid set of basic features, is backed globally by the VMware brand, and addresses potential customers who have already accepted VMware as the virtualization provider for the core of the enterprise data center.

However, Gartner analysts cautioned, VMware still needs to appeal to the cloud users in the enterprise, who aren't necessarily the same managers who lead the transition to virtualization. Rather, they are often business managers and application developers who are interested in moving rapidly toward next-generation applications rather than to those that are already virtualized.

Virtualization managers focus on building a private cloud as an extension of the virtualized data center. Public cloud users in the same enterprise are interested in circumventing them and getting into a self-provisioned, public cloud environment as quickly as possible. "VMware needs to win over these administrators with regard to vCloud Hybrid Service, but it also need to develop a compelling value proposition for developers," the Gartner analysts wrote.

VMware also relies on its extensive channel of third-party system integrators and VARs, such as Indianapolis-based Bluelock, but "none of those service providers attained true scale and they were not able to maintain the level of innovation necessary in this market," Gartner said. To further complicate matters, Gartner continued, VMware is not directly competing with this channel.

VMware is trying to build an ecosystem about vCloud Hybrid Service and has a marketplace of software from various providers, including HP, Hytrust, VCE, and ExtraHop Networks, that's optimized to work with VHS. But the only software directly available from a catalogue is operating systems and Microsoft SQL Server. The broader channel of VMware partners are still learning how to sell vCloud Hybrid Service, Gartner noted.

Private clouds are moving rapidly from concept to production. But some fears about expertise and integration still linger. Also in the Private Clouds Step Up issue of InformationWeek: The public cloud and the steam engine have more in common than you might think. (Free registration required.)

Charles Babcock is an editor-at-large for InformationWeek and author of Management Strategies for the Cloud Revolution, a McGraw-Hill book. He is the former editor-in-chief of Digital News, former software editor of Computerworld and former technology editor of Interactive ... View Full Bio

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User Rank: Author
6/5/2014 | 1:35:20 PM
Re: Cloud price cutting is cutting out some competitors
As Charlie has noted, the winner in the cloud price war looks to be Google either way. Even if Google doesn't steal a ton of AWS customers, it has eroded Amazon's profit margin -- and Amazon needs the $ more.
Li Tan
Li Tan,
User Rank: Ninja
6/5/2014 | 10:58:49 AM
Re: Cloud price cutting is cutting out some competitors
The competition is really fierce, which is good for the consumer. However, there is another concern - will the service quality be jeopardized? The pure price war cannot last for long and it's one of the worst kinds of competition.
User Rank: Ninja
6/5/2014 | 12:44:29 AM
Re: Cloud price cutting is cutting out some competitors
Amazon, along with its competitors created the price-war that made prices to drop for the consumers of IaaS, and this resulted in profit margins to shrink. If Rackspace was a bit more like, and had a solid software environment to go along with its hardware offering, then it would have been difficult to force a company like Rackspace to take a step backwards.  
Charlie Babcock
Charlie Babcock,
User Rank: Author
6/4/2014 | 3:30:25 PM
Cloud price cutting is cutting out some competitors
Those forced to take a step backward, such as Rackspace, in this release of this Magic Quadrant, illustrate how hard it is to compete in the new era. The builders of new, giant infrastructure can cut prices repeatedly; you can't.

Multicloud Infrastructure & Application Management
Multicloud Infrastructure & Application Management
Enterprise cloud adoption has evolved to the point where hybrid public/private cloud designs and use of multiple providers is common. Who among us has mastered provisioning resources in different clouds; allocating the right resources to each application; assigning applications to the "best" cloud provider based on performance or reliability requirements.
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