Clouds Ready For Enterprise? Gartner Says Few Are - InformationWeek
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5/22/2015
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Clouds Ready For Enterprise? Gartner Says Few Are

Amazon's innovations and services give it an edge with enterprises, while Microsoft, Google, IBM, VMware, and CenturyLink nip at its heels.

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You may not have felt it, but there was a seismic shift in the landscape of cloud services recently. Just as companies are gearing up with plans to make use of cloud computing, a new Gartner report concluded that the number of suppliers able to meet enterprise IT's needs is shrinking, with some in headlong retreat.

HP didn't have a large enough presence among suppliers to make it into the Gartner Magic Quadrant this year. GoGrid, which retreated last year from offering general purpose infrastructure-as-a-service (IaaS) in favor of high performance big data management, was acquired by Datapipe in January. It also dropped out of the listing. Even among the survivors, the Gartner report accompanying the Gartner quadrant rankings made clear that enterprises face fewer choices than they might have thought would be available as recently as a year ago.

AWS Senior VP Andy Jassy has the Amazon cloud on track.

(Image: Amazon)

AWS Senior VP Andy Jassy has the Amazon cloud on track.

(Image: Amazon)

The report's writers, led by Gartner cloud analyst Lydia Leong, said new cloud customers must "be extremely cautious" when they're selecting a provider. "Ask specific and detailed questions about the provider's roadmap …" they warned, followed by recommended contract terms "that do not permit the provider to modify substantially or to discontinue the offering without at least 12 months' notice." It's the latter requirement that suggests the true state of the market.

With Gartner's warning ringing in their ears, many IT managers are going to realize no one will ever get fired for choosing Amazon, but that might not be true for alternative suppliers they might have wished to consider.

Cloud providers are discovering that it's hard to make any money as a cloud service supplier. Amazon with its Crazy Eddy, bargain basement pricing, now matched by Google and Microsoft, has made it extremely difficult for new suppliers to gain entry. It relentlessly lowered prices at a time when Wall Street analysts were crying out that Amazon was spending too much on infrastructure and not showing enough profit. Amazon can now show them a set of assets and marketshare that promise profits for years to come.

[Want to see how Amazon has outstripped the competition? See Gartner Doubles Estimate Of Amazon Cloud Dominance.]

So there's a divide emerging that has a handful of "safe" IaaS suppliers on one side, with deep pockets and a commitment to continue investing, and on the other is a large group with a big question mark.

Leong mapped another fault line in the market, what she calls Mode 1 and Mode 2 cloud infrastructure. Mode 1 providers could serve the needs of traditional IT, usually in the form of a coordinated, on-premises and off-premises hybrid cloud. Mode 2 type suppliers are oriented toward agile developer groups and IT operations that are pushing toward continuous software delivery and DevOps style operations. A large number of suppliers can meet typical IT needs in Mode 1; a much smaller number meet Mode 2 needs.

Given its proven ability to spin out new services rapidly, Amazon is in both of the select, small groups. Those who aren't clearly positioned will have to get into one or the other mode to survive. The report that accompanied the Magic Quadrant looked at each supplier from that perspective, citing what specific weaknesses it could spot.

What follows on the next page are the key vendor snapshots from the Gartner report, including AWS, Microsoft, Google, IBM, CenturyLink, and VMware.

(Story continues on page 2)

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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PeterF028
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PeterF028,
User Rank: Moderator
6/15/2015 | 10:12:37 AM
Scary thought
While I have to agree that many of the cloud configurations are still lagging behind where they really should be at this point, its a scary thought considering how pivotal cloud has become in today's IT environment. Cloud is not just a budding technology, it is relied upon for many mission critical activities and will only continue to grow in significance as the IoT takes form.  The question is how many CIOs are aware of the shortfalls, and what steps are they taking to protect the enterprise? Peter Fretty, IDG blogger working on behalf of CSC. 
mdortch570
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mdortch570,
User Rank: Strategist
5/27/2015 | 12:49:26 PM
Re: technology realization of cloud computing has different constraints
Agree entirely – but I'd add the observation that IT skills often determine or at least strongly influence CSP choice. And of course, CSP choice can have direct effects on the outcome of enterprise cloud computing efforts, effects perhaps as meaningful as those of available IT skills.
Stillwater01
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Stillwater01,
User Rank: Apprentice
5/25/2015 | 11:29:03 PM
Re: technology realization of cloud computing has different constraints
@Tzubair  The answers to these questions depend on what the strategic vision is for IT in the enterprise.

If the enterprise views IT as a strategic differentiator but they are behind on their investment in skill and capability then bringing in an SI to bootstrap the effort is most productive. But it is important that whatever SI is brought in, the system that is delivered can be picked up, maintained, transformed, and expanded on by the internal IT teams. The SI is really there to avoid making unnecessary mistakes, and bootstrap the organization to best practices in one product cycle. The bootstrap project needs to deliver skill, capability, training, and support processes for all the cloud requirements: infrastructure-as-code, CI/CD, service reliability, and elasticity. So that first project is unlikely to be an existing enterprise application for the back-office. 

If the enterprise simply consumes IT and is not investing in skill and capability, then the path to the cloud is through integration of full stack SaaS components. The SaaS provider solves the cloud attributes of the application, the enterprise consumes the capability, and the internal IT team serves as a VMO, and L1 support layer, with the skills to escalate to L2 and L3 support by the SaaS provider. An SI, or the professional services team of the SaaS provider will be your answer to system integration with existing systems and processes.

Because cloud transformations are very much a change management problem with the IT teams having to go through major skills and process training, it is typically very easy to predict success of failure upfront. Success is only achievable if the management team understands the change management problem. The journey that the internal IT team needs to go through is to discover the new attributes of the cloud, which in a nutshell is the domain of distributed systems comprised of unreliable components. This journey starts with deployment automation (infrastructure as code) and can be applied to the enterprise applications that they already have. The next problem that they need to become familiar with is service reliability. With the infrastructure automation in hand, they need to solve the distributes system problem of delivering reliable service in the presence of component and network failures. Again, something that you can apply to your existing enteprise applications without having to go to the cloud. It is even better to do this in your own environment first, before bringing in the cloud. This comprises the necessary skills for the delivery pipeline. CI/CD/CR is the next step to facilitate innovation, and elasticity is the cherry on top to have the system autonomously right-size itself. That journey is not rocket science, but it does require a change in thinking. An SI can bootstrap that process, but the organization needs to do the learning.
tzubair
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tzubair,
User Rank: Ninja
5/25/2015 | 4:38:58 PM
Re: technology realization of cloud computing has different constraints
"This concept that their enterprise apps are poor candidates for the cloud is what creates the risk. Typical awareness of a CIO team that is managing their portfolio through a VMO is so low that their decision making is consistently selecting the wrong trade offs."

@Stillwater01: Who do you think should do the "cloud-readiness" analysis for enterprise apps? Do you think the internal teams are qualified enough? Do the cloud vendors have the motivation to do this? Should a third-party be involved?
Stillwater01
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Stillwater01,
User Rank: Apprentice
5/24/2015 | 9:13:00 PM
Re: technology realization of cloud computing has different constraints
As SI we see exactly that mistake being made by CIO team after CIO team: they have no cloud skills and their first project into the cloud is a critical enterprise application that has no cloud attributes to speak of. This concept that their enterprise apps are poor candidates for the cloud is what creates the risk. Typical awareness of a CIO team that is managing their portfolio through a VMO is so low that their decision making is consistently selecting the wrong trade offs. We have seen this so often now that we experience it as a trend. The reason I don't agree with Gartner's messaging is that this risk has very little to do with the CSP, its bid structure, or even its portfolio of services. If something is labeled a relational database like RDB doesn't mean it is a good fit for an Oracle or Microsoft legacy app. This is obvious to the technical staff that has developed with these technologies, but awareness of the financial or risk impact by the typical CIO office is severely lacking. That is what the research firms should highlight, not silly comparisons between AWS and Azure.
tzubair
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tzubair,
User Rank: Ninja
5/24/2015 | 6:30:07 PM
Re: technology realization of cloud computing has different constraints
"The technical debt that most enterprises have accrued on their infrastructure and critical applications is the cause of the high risk of moving to the cloud, not the choice of the CSP."

@stillwater01: I agree with this. However, that investment is something that the cloud vendors will have to consider before they make their proposals. You can't tell a CIO to get rid of the existing infrastructure and make a fresh start. The legacy systems have to continue and a smooth transition is required to ensure there are no major hits on the financial and technological side.
tzubair
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tzubair,
User Rank: Ninja
5/24/2015 | 6:23:56 PM
Cloud ROI
I think companies all over have accepted the fact that cloud is the way to go in terms of future. However, what most companies still want to evaluate is the ROI. What exactly is the bang for the buck that cloud is offering - that remains a question mark. To counter this, I think cloud vendors should start focussing on the calculations in their proposals.
tzubair
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tzubair,
User Rank: Ninja
5/24/2015 | 6:22:04 PM
Re: Is Amazon on top by luck or design?
"There was a rumor circulating around Amazon's Re:Invent show last November in Las Vegas that it had hired 100 experts on enterprise business."

@Charlie: I think enterprise business is one area that Amazon has potential to grow in, and I wouldn't be surprised if they are seriously looking to invest into it. The next chunk of growth can come from the enterprise sector and B2B strategy if they focus on it.
Stillwater01
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Stillwater01,
User Rank: Apprentice
5/23/2015 | 12:03:59 PM
technology realization of cloud computing has different constraints
As usual, I find the Gartner view of the world missing the point. In my view, the realization of IT service automation for an enterprise is 5% CSP and 95% IT skills. If you look at the process of CI/CD/CR there is almost nothing depending, architecturally, on the CSP. It is all about hard (IT) work to define a clean process and clean automation principles. The technical debt that most enterprises have accrued on their infrastructure and critical applications is the cause of the high risk of moving to the cloud, not the choice of the CSP.
Charlie Babcock
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Charlie Babcock,
User Rank: Author
5/22/2015 | 5:04:40 PM
Is Amazon on top by luck or design?
There was a rumor circulating around Amazon's Re:Invent show last November in Las Vegas that it had hired 100 experts on enterprise business. Most of what has transpired since, the way it's geared its pricing toward large, long term users and the services it's offering for free that increase an agile and DevOps style of operation can be viewed as confirming that rumor. Or it could just be that Amazon is doing what comes naturally to a company that grew up on the Web.
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