Tuesday, December 31, 2013

Cloud market penetration - is Cloud successful?

We are now a few years into to Cloud evolution, meaning that there are not only ten-folds of Cloud providers, but hundreds that are offering their IaaS, PaaS and SaaS! Thus one should expect to find a mature Cloud market out there that is being utilized by most buyers, but is this the reality?
Cloud penetration pyramid              
I dont think so? Why is that? How come we have hundreds of providers and so few enterprises that are taking advantage of the Cloud?
Well, as for private Cloud offerings, many, maybe even most of the large enterprises are on a transformation journey into a private Cloud (however this is also being disputed by some sources), but is this really the ultimate target of their strategy?
I hope not, because it is much more to the Cloud value proposition than automation of internal IT, like no CAPEX and significant cost reduction through paying only for the resources consumed! On top of this the buyer gets the flexibility of multi-sourcing and ability to "shop-around" where the services are to the best for the business. So what is wrong, why are not the large enterprises transforming into the public Cloud? One obvious reason is of course regulatory reasons, ie security and trust. But is it not the providers responsibility to ensure that their services are according to the regulatory requirements? Thus significant lobbying is needed to convince the regulators, but of course not without the solutions that actually can solve the issues that makes the regulators restrict so many large enterprises being engaged in a transition into the public Cloud.

At the same time there are multiple large Public Cloud providers claiming they can meet any security requirements set up by the enterprises or regulators, but the problem is lack of transparency! Most of the secure enterprise public Cloud offerings are too complicated and the providers fails entirely in providing the transparency that the buyer and regulators requires - so dont blame the large enterprises or the regulators!

Simplicity is key, that includes the required transition and transformation process, the delivery model and the payment model - the core of the Cloud value proposition is simplicity, automation and cost efficiency, but the providers fails miserably on the first instance; simplicity by proposing complex T&T processes and payment models that requires a mathematical genius with considerable IT delivery experience to fully understand.

Why are Amazon (AWS) so successful, maybe it is beacuse they have successfully implemented a very simple value proposition that communicates a simple transition- and delivery process with an understandable payment model? However, I am not sure that the AWS covers all large enterprises need of availability, scalable and secure cloud solution, but one should not let possible lack of functionality get in the way of the real issue of simplicity and transparency!

References/sources:
Cloud Computing Today
Don’t believe any claim about private cloud market share

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