Clouds Ready For Enterprise? Gartner Says Few AreClouds 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.
May 22, 2015
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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.
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.
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Vendors: Safe Or Unsafe? Mode 1 Or Mode 2?
First, Amazon provides the yardstick: AWS has "a very pure vision of highly automated, cost-effective IT capabilities, delivered in a flexible, on-demand manner." It has a broad set of data centers around the world, and its style of self-service "primarily appeals to Mode 2 buyers, but is now commonly chosen for Mode 1 needs as well. Transformation efforts are best undertaken in conjunction with a systems integrator."
The report continued by saying Amazon was among the few providers capable of supporting enterprise and mission-critical applications, and that it offered the broadest range of use-cases. It's also a thought leader that continues to command mindshare in the marketplace: "[I]t is extraordinarily innovative, exceptionally agile, and very responsive to the market. It has the richest array of IaaS features and PaaS-like capabilities," the report said. As a result, it has a strong third party ecosystem growing up around it, making use of its core services.
On the weakness side, the main strike against Amazon is complexity. "AWS can be a complex vendor to manager. Customers must ensure that they receive the level of sales and solution architecture engagement they need…. AWS is a price leader, but it charges separately for optional items that are sometimes bundled with competing offerings. Use of third party cost management tools, such as RightScale Cloud Analytics and Cloudability, is highly recommended."
Gartner also warned that, while Amazon is investing in many new services, those services won't get continued investment if they don't prove popular.
Second, Microsoft's Azure measures up in many respects, though not so well in others. Microsoft is focused on shifting its software business into the cloud, which makes it quite serious about delivering cloud services. It too has well distributed cloud data centers around the world, and "appeals to both Mode 1 and Mode 2 customers, but for different reasons." Mode 1 customers like Microsoft's ability to connect their Microsoft on-premises infrastructure with Azure. Mode 2 customers like Microsoft's investment in making Azure a leading platform as a service for development with familiar Microsoft tools.
Azure has twice the capacity of its 12 largest competitors (excluding Amazon) combined and is suitable for running "general business applications and development environments for Microsoft-centric organizations, cloud-native (or designed for the cloud) applications; batch computing."
On the weaknesses side, Gartner analysts left out the "mission critical enterprise application" category on its Azure use case list. Enterprise workloads could start to be migrated today with an eye toward finishing the process over the coming 12 months, as Microsoft adds more security, availability, and networking flexibility to Azure. "Furthermore, customers express concern about the global impact of many past Azure outages, which may necessitate ensuring that critical applications on Azure have a non-Azure disaster recovery solution."
Its third party ecosystem is young and growing but lacks "extensive experience with the Azure platform." The ecosystem is "very dependent on existing Microsoft relationships." While it's possible to run Linux and heterogeneous environments on Azure, the appeal of doing so isn't strong enough to attract "non-Microsoft-centric organizations." CEO Satya Nadella's declaration that Microsoft "loves Linux" and is embracing other open source code was early recognition of the dilemma.
Google rated much better in its adoption of open source and ability to work with open source code projects than Azure. Its launch of Kubernetes Linux container cluster management got a Gartner nod of approval. Furthermore, Google is a company built on cloud-native applications and it understands how they're developed and launched. With both IaaS (Compute Engine) and PaaS (App Engine), it understands the "fluid notion of the boundaries" between them, where code developed on one is easily deployed on the other.
At the same time it has a "comprehensive vision" of how virtual machines and containers should work together on a cloud architecture, which will give customers a choice between control and automated management, with containers in particular lending themselves to the latter. It's approach to cloud services has "significant appeal to technology-centric businesses," particularly startups in the Silicon Valley.
But, Gartner cautions, Google hasn't succeeded in building up a third party ecosystem that enhances the value of the Google Cloud Platform (App and Compute Engine), and it's still "in the rudimentary stage of learning to engage" with enterprise customers. "Prospective customers report difficulties in gaining the attention of Google's sales staff and being directed toward appropriate solutions. Furthermore, Google needs to earn the trust of businesses," the report said.
Google as a Web-based business falls short when it comes to having the capability to help businesses migrate legacy systems to the cloud. Google has been improving its cloud services regularly, but it's not releasing features as fast as Gartner had expected, and the report concludes, "Google is not yet taking full advantage of its potential opportunity."
In theory, much of the opposite might be expected from IBM, the firm trying to establish itself in the cloud but with deep roots in enterprise computing. Surprisingly, the Gartner report finds question marks with it as well. IBM thinks of cloud computing as both IaaS (its SoftLayer unit) and PaaS (Bluemix), along with IT operations management, database and data analysis software and middleware. It acquired SoftLayer to build out its self-service business, one with an established set of Mode 2, technology-oriented startups and small business customers. IBM is committed to rapidly expand SoftLayer's "small scale" data centers in added facilities around the globe.
But, the report cautions, unlike Amazon, SoftLayer's feature set "did not improve significantly in 2014" and IBM's build out of Bluemix capabilities "have limited benefits for SoftLayer customers because the offerings are not integrated into SoftLayer." SoftLayer in its earlier existence as an independent company came up with its own cloud technology and APIs, but that means it has a limited third party ecosystem and support.
IBM's Bluemix is on an OpenStack-based public cloud. But trying to also transition SoftLayer into an OpenStack cloud "could be disruptive for existing SoftLayer customers," the report states. Consequently, SoftLayer is best used for ecommerce hosting, general business applications, and batch jobs. The option remains of using a bare-metal servers when performance and regulatory requirements require them. The list did not include mission critical enterprise applications.
"We believe SoftLayer is primarily becoming an enabling data center platform for the rest of IBM's business …" In other words, it's a good platform for hosting IBM's managed services and offering off-premises, bare metal servers. SoftLayer's small business roots mean "it's missing many cloud IaaS capabilities desired by midmarket and enterprise customers … Customers report that SoftLayer services still feel like a small business experience …"
CenturyLink is the highest ranking telecommunications provider in the Magic Quadrant, and its CenturyLink Cloud is the only telecom IaaS in the visionaries quadrant. It appeals to Mode 1 customers but may meet the more agile Mode 2 requirements that "are limited to basic cloud IaaS," the report said.
Among its strengths, CenturyLink "has a compelling and distinctive vision of application-fluent infrastructure that spans network, compute and storage capabilities." Through its Tier 3 acquisition, it is updating its internal software building and delivery to reflect a more agile and continuous delivery model, which may help it to rapidly upgrade its cloud services.
It is a VMware-virtualized environment as well, giving it basic compatibility with many enterprise IT operations. While having a major base of data center outsourcing (through Savvis acquisition) business that it seeks to expand, Gartner concludes that CenturyLink "successfully blends the self-service and managed services models."
CenturyLink needs to invest heavily and is, but it is competing against deep-pocketed rivals. Its roadmap "may not be sufficiently aggressive for the pace of the market," the analysts warned.
VMware, which redubbed its vCloud Hybrid Service as vCloud Air last year, appeals mainly to the enterprises that have virtualized their traditional IT operations on premises. VMware has invited them to extend their data centers by moving the virtualized workloads into vCloud Air in a form of hybrid cloud operations.
The vCloud is good for development environments, including VMware spin-off's Cloud Foundry, disaster recovery, and running general business applications. But the "mission critical enterprise application category is again missing. The report said it appeals primarily to traditional IT shops with "existing investments in VMware technology."
VCloud Air appeals to virtualization managers in part due to the hybrid IT operations they can envision by using it. VMware promises workloads both on-premises and off will be managed from a single pane of glass, but Gartner says VMware is not there yet. VCloud Air "has limited appeal to the business managers and application development leaders who are typically the key decision makers" for moving to off-premises infrastructure use. Virtualization admins prefer internally-built systems. Gartner points out it is that type of IT manager "that the business is trying to bypass by going to the cloud" in the first place.
VMware needs to build an active ecosystem around vCloud Air. It offered the vCloud Air Marketplace last year, attracting few catalog listings. Its broad community of resellers "need[s] to learn to sell vCloud Air effectively and deliver value on top." None of its existing regional cloud implementers, built on VMware vCloud software, "have attained true scale and they were not able to maintain the level of innovation necessary in this market," the report stated. VMware itself faces many of the same business challenges as those service providers, the report says.
In each of these six descriptions, a large-scale cloud buyer finds challenges and less than ideal services in which to run enterprise applications, particularly mission-critical ones. But for enterprise purposes, the array of acceptable cloud providers represents a shrinking set of prospects, often coming down to Amazon, Microsoft, or Google, with AWS standing out as one of the few safe choices.
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