Will large 'cloud combines' soon be serving our enterprise needs?

Will large 'cloud combines' soon be serving our enterprise needs?

Summary: Who will dominate the cloud computing space -- market leaders or ecosystems?

TOPICS: Emerging Tech, Cloud

Who will lead or dominate the cloud computing space as this approach matures?  Will there be dominant vendors offering the works, or combines of vendors teaming up to offer an ecosystem of cloud services?

At a recent BriefingsDirect panel, I had the opportunity to join Dana Gardner and other analysts in a rousing discussion of who may take the leadership role in the emerging cloud computing space. (Access podcast here, or transcript here.)

Forrester's Jim Kolebius predicts that"well established platform vendors, like SAP, Oracle, IBM, and Microsoft, stand to do very well in the cloud-computing paradigm, because they have substantial, global, differentiated partner ecosystems." Vendors offering specific services, such as cloud-based storage, will not dominate, unless they can team up with other partners in new cloud ecosystems. "They'll probably be members or participants in several partner ecosystems, providing some core functionality, but they won't dominate to the extent that the established brands will," he says.

Jim also pointed out that "success in the emerging cloud arena depends on having a very broad and deep ecology of partners." Jim said he sees "the partner ecosystem as the new platform for cloud computing." The ability to assemble a group of partners, each providing various differentiated features and services, will advance vendors in the cloud computing market.

Will the cloud infrastructure providers be the hubs of these ecosystems? Brad Shimmin of Current Analysis noted that the infrastructure layer is where the action is in terms of cloud leadership. "There are a number of rudimentary basement layer infrastructure-as-a-service vendors out there who are going to be taking the Amazon model and talking to vendors to act as a part of that ecosystem, and to build out this infrastructure that will allow you to build and deploy any PaaS or SaaS on top of that," he says. "What that says to me is that the vendors who have that strong infrastructure piece -- the infrastructure software and in some cases the hardware and data centers themselves -- are going to be well positioned to play in that ecosystem, regardless of what sort of SaaS applications they have."

Topics: Emerging Tech, Cloud

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  • Enterprise will have to be dumb, too.

    Since the economic blow up, enterprise business people have been shown to be short sighted and ineffectual at core business practices. This is great for cloud computing because it only offers short term gains and you would have to be incompetent to use the cloud services in the first place. So it will be a marriage made in heaven for profiteering barons and a nightmare for regular taxpayers who will have to bail out these businesses all over again.

    None of the big players or the small players in the could have really addressed the following:

    1. Data Ownership. The problem is the EULA normally give IP and ownership rights to the cloud vendor, not the enterprise. So keeping trade secrets on the cloud is a no no and pretty much anything other data you might want to keep secure and secret. The solutions put forth so far are "Build your own data center for storing trade secrets and sensitive information." Hmm. If have have already incurred the cost of a data center, why not use it for my business???

    2. Technical Support. As soon as an enterprise can't use Excel and Powerpoint because a network server at Microsoft is down and you lose a big deal, the enterprise will start to value a service that is up 95% and has a support structure that meets the enterprises schedule not the vendors schedule.

    3. Exit Strategy. No matter how big the play they can still go out of business. If you are an enterprise dependent on a vendor to supply your software, or storage over the internet and the cloud vendor goes out of business, what do you do? Xdrive was a storage company that offered cloud storage. They went out of business and only gave their users 48 hours to save data to another place. For an enterprise, this can't be exceptable risk.

    4. Long Term Data Storage and Accessibility. If you are fortunate enough to get a cloud vendor to stay in business longer than 4 years you might have 6 year old documents stored with them. Can you still read the documents? Can you still open them up? If you keep tax records on the cloud you might need them as much as 5 years. What happens when the file format is no longer supported or there isn't a file reader that can open the file any longer? Will the U.S. Taxation Office give your enterprise a pass on paying taxes because of technical difficulties or will your enterprise have to pay huge fines?
    • Nice points

      Each of them on target.
    • These are important concerns...

      I have talked sporadically about some of these risks, and you have done a great job distilling them. Thanks for bringing these to light; I would like to surface your observations in another post.
  • New terminology, same considerations

    I'm very pleased that outsourcing and hosting has found a new set of terms to start a new hype cycle. "Cloud", "ecosystem", SaaS and PaaS are far more interesting than "Internet", "hosting", "outsourcing" and "time-sharing."


    I suspect this cycle will be much like the last where companies assume they can save a ton of money, outsource their infrastructure and apps, find that they don't save money, don't have the flexibility/responsiveness they need, and then bring much of it back in-house again. Why do we repeat the same patterns?
    • It will be interesting...

      ...to see what's being said five years from now. As it will to hear what's being said about SOA.
  • RE: Will large 'cloud combines' soon be serving our enterprise needs?

    Nifty! One server farm to break into, and you steal the records of hundreds of companies! It's a black hat paradise!
    • Data Security

      Enterprises really will have to do their due diligence ensuring that outside providers adhere to the same security requirements they have in place. I talked to one IT executive who felt that the requirements in place at a provider were more thorough than those applied to his own IT departments. He made sure, however, he was intimately involved and proactive about the relationship. The point is that cloud computing isn't just something you buy on the fly -- the relationship should be as tight as with all mission-critical vendors.
      • Your comment makes my day!

        Being a short-sighted, ineffectual and incompetent enterprise businessman naturally I have felt compelled to give cloud computing a try. Your IT exec. friend gives me hope that at least my due diligence is worthy of a friendly nod. Thankfully I also derive some additional satisfaction from my success in helping to drive the U.S. economy to the brink of cataclysmic implosion - you see, incompetence does have its virtues. At the same time, though, I have to shield my eyes from our economy's continued glaring superiority and strength (despite current events)compared to the rest of the world. Although Mr. 1972 suggests that am not paying taxes, as an aspiring profiteer/baron, I wish that were true. Then I could afford to hire more backs to stand on.

        All jest aside, here's my answer to your question as to who will win the cloud computing game. I will. Despite Mr. 1972's "nice points", they are not new, and in my opinion, fairly easily addressable. Like you said, due diligence is the key. It's just a matter of time before cloud computing will become the prevailing choice, where business applications are free and I will be paying only for the service I want, and the cost of pushing electrons. Incidently, hardware, like software will become a commodity. Hail and praise to liberty and freedom, the American way!

        P.S. Thank you for informative column, from which I learn and use.
        • Share some of the details?

          Other than due diligence which really doesn't mean much other than when everything breaks a person can say they did as much due diligence as they were able to at the time to try to avoid the disaster that just happened.

          I am actually not a network hater. But I have taken the time to read many of the publicly available EULAs that cloud vendors publish and they are very crafty. They sneak in a "right to change this agreement in any way we would like at any time we would like."
          Should a responsible business person sign a contract with a vendor that includes clause that allow the vendor to change the contract after the enterprise signs it? I have seen a few business contracts before and normally they are a compromise on both parties. The vendor would agree to perform specified services for specified prices. The enterprise agrees to pay for the services. Simple. Normally nothing shady or underhanded. You don't see these simple business contracts on the cloud for some reason.

          But really, as I am not a hater just concerned, what specific things do you know about to address my concerns?
        • Nothing new is right

          "...they are not new, and in my opinion, fairly easily addressable. Like you said, due diligence is the key. It's just a matter of time before cloud computing will become the prevailing choice..."

          Outsourcing has always been an option. Will it be the prevailing choice now that there is a new name for it? I doubt it. Sure, there are some new capabilities that weren't available before but the decision factors remain the same.
  • RE: Will large 'cloud combines' soon be serving our enterprise needs?

    What about the network? Won't network infratsructure be strategic to cloud computing? Why isn't the network part of the conversation?

  • Not likely...

    Data security, recoverability, network availability, and vendor persistence remain critically serious concerns for which there is no satisfactory answer.

    As in the real world, the cloud is just vapor.

    Just my $0.02 USD.

  • This will be up for discussion...

    ...at Cloud Connect, an event that aims to tackle the
    question of whether and how all of your IT can be
    moved to the cloud.

    Created by David Berlind, you can find more
    information on Cloud Connect at

    It will be a free unconference taking place January
    20-22 at the Computer History Museum. If I can provide
    any information for you or be of any assistance,
    please don't hesitate to email me! I can be reached at

    Happy Holidays!
    Elizabeth King
    Marketing Coordinator, Techweb Events
  • Due Diligence is all I have.

    I just disagree on your first point. I do due diligence not so that I have an excuse if I foul up, but because I want to do well. I think most people are the same way. However, I do foul up occassionally. Fortunately by having done due diligence the consequences of fouling up are rarely egregious. Which leads me to your second point.

    I have entered agreements such as you have described, for instance, credit card agreements, some free software programs. Due diligence is what has given me the confidence to do so - I have never been burned by a EULA. It's just a matter of weighing risks against benefits. Also, just because a contract allows one party to unilaterally change the contract does not mean that the other party has no recourses. Every state in the Union has laws against lying, cheating and stealing, which supercede any contract. I think those laws are mostly effective. But better than the laws are the pressures created by free-market economics which cause lyers, cheaters, and thieves to fail in business, that is, preponderantly so. The freer we are, the more honest we are, in my opinion. The freer we are, the better able we are to address problems.

    You seem like a nice chap. Thanks for the conversation. Have a merry Christmas.
    • Your answer is a bit scary

      You seem to indicate that my business would have to fight a lengthy legal battle over the definition of what a contract is in what ever state my data center happens to occupy. This could be China and I am not sure a medium business from the USA would have much of a chance winning that case.

      1. I am reminded of the Turkey problem. 24 days before Thanksgiving in the USA a turkey is fed very well. After about 10 days of getting fed very well the turkey just expects that for the next 5 years it will be fed well. After all it has been feed well for the past 10 days why shouldn't the feeding keep going? After day 23 the turkey is absolutely convinced the goodness will continue forever. The family intending to eat turkey tomorrow knows differently however.

      Many people believed the internet would not be commercialized. Free information with out annoying ads would continue forever. Now we know differently. The same is true for EULAs. Just because companies have chosen to not enforce some of the things in them, doesn't mean they never will.

      Perhaps true capitalism would shake the lying thieves, and predators out of business but in the USA and most of the world, true capitalism is not practiced. Bankers do lie. They lied about the value of their mortgage backed securities. Sales reps lie about their products, and CEOs lie about how effective they really are in a business structure. The mix of organized crime, politics, and profiteering guarantee that business will be ugly.

      Ask the imprisoned journalist that the internet media companies handed over to the Chinese government with out batting an eye lash how much they trust internet based services, security, and protection.
  • RE: Will large 'cloud combines' soon be serving our enterprise needs?

    There is great power in employing distributed and/or matrixed computing systems for large computing tasks that are very expensive to support in computing system resources and IM architecure services. That said, there is also a very high user risk in potentially losing masses of valuable data and information if an enterprise primarily counts on a networked cloud system for primary info systems processing and resource-consuming calculations. The selected system may not have adequate information security features or those features may not be properly validated & verifiable (V&V) by a certified, independent system of systems (SoS) audit agency. Where does "cloud system" provider services liability start and stop (especially in an "ecosystem of provider partnerships")? Even the best of systems have some weakness that can be exploited by a disgruntled insider or an experienced external hacker. The trade between evolving, overall information systems security vulnerability and computing power needs to be considered by every enterprise user that wants to switch over to the cloud network. What are the cloud network service provider's liabilities and warrantees, if any? What is the real systems survivability/vulnerability of using an off-site cloud system for critical operations? Are the architecture and systems level requirements, master systems integration specification, and SoS V&V e-documentation available to every potential cloud network system user upon request? Would your organization know how to evaluate those documents if you asked for them?

    A Skeptical Systems Analyst
    ESS VP
  • Probably, but as an enhancement to BPO

    Most big-time enterprises have already ventured into outsourcing a long time ago. Those non core, non mission critical business functions has remained outsourced because they saw the feasibility of it. I think outsourcing business has saturated its market so they are trying to re-invent it and hopefully expand its market share. However, the effort may be in vain because the potential market will definitely see this as a possible service improvement that their current outsourced service providers can do for them.