Enterprise giants and cloud computing: What's cloudwashing vs. real DNA change?

Enterprise giants and cloud computing: What's cloudwashing vs. real DNA change?

Summary: Every large enterprise technology company now has a cloud computing narrative that can't be easily dismissed as cloudwashing. Does that make them good innovation partners?


IBM lands a $600 million outsourcing deal from NiSource that includes public and private cloud infrastructure. Hewlett-Packard launches a cloud portfolio called Helion that revolves around OpenStack, but includes a lot of hardware and services too. SAP is reorganizing in part to "become the cloud company," but everyone knows the company thrives due to licensing and maintenance revenue.

2014 Cloud Priorities survey

And those rip-and-read headlines are just from the past week in the land of enterprise technology giants.

I could replace any of those names above with Oracle, Dell, EMCCisco or any other company that derives most of its revenue from hardware or software, but sees cloud computing as the thing driving future growth.

Companies such as Amazon Web Services, Google and even Microsoft could mock those cloud-but-really-selling-you-hardware efforts as fake cloud narratives.

In 2010, I noted how the cloudwashing was just getting started. Enterprise tech players would toss in the word "cloud" to every press release. Who could blame them? Cloud was the buzzword and a hip thing to do. These vendors were also largely blowing smoke up their customers' butts.

Calling the trend "cloudwashing" wasn't all that much fun simply because it was too damn easy four years ago.

Today, exposing cloudwashing is more tricky. The reality is that most enterprises will use a hybrid cloud model. They're not going to toss existing assets---that are depreciating and look good on the tax statement---to take their infrastructure to the cloud. Meanwhile, the pay-as-you-go model isn't perfect and can actually cost you more in certain situations. The headaches with on-premise software and hardware are also well known. But the best course between your data center and the public cloud lies somewhere in the middle.

Enterprise giants get that reality and are even starting to exploit it. The cloud isn't necessarily a threat as much as it is an option and addition to sell more stuff.

Let's take IBM. Big Blue went after Amazon Web Services in a marketing campaign after it bought SoftLayer and got into the public cloud game. However, you could pick apart SoftLayer and Big Blue's "cloud" results and find hardware and services in the mix. Is SoftLayer the only pure cloud play here? Or is IBM's infrastructure powering the cloud also some derivative in the equation? How about services? Is IBM as a service more to the point?

cloud survey

The NiSource deal is a seven-year outsourcing deal on the surface. But SoftLayer is involved. IBM's services are involved. Hardware and software are in the mix too. To IBM, the cloud is simply a derivative of hosting or outsourcing.

Google gets serious about enterprise cloud: It's about time

IBM's value prop goes like this: We'll run your infrastructure. Don't sweat it.

The cloud value prop sounds shockingly similar. Oracle has a similar pitch. Does anyone really doubt that Oracle is a cloud player? Even Workday and Salesforce would note that they have to compete with Oracle's software as a service lineup. 

We can quibble over whether Oracle's buy into the cloud model will work, but there's a red stack that covers a lot of bases.

SAP wants to be the cloud company and we all know that the software giant bought its way into the market via Ariba and SuccessFactors. But you can price out HANA instances via SAP's site. On some level, SAP is a cloud player and is building data center capacity to prove it. Sure, being a cloud leader is an aspirational goal for SAP, but you can't dismiss the efforts as cloudwashing.

Hewlett-Packard also has its -as-a-service models and cloud infrastructure to boot. HP's embrace of OpenStack and pledge to stay true to the kernel of the open source project is also huge.

Let's face it: Enterprise giants all have embraced open source only to wrap their proprietary technologies around it so you can't escape easily.

In the end, you could argue that the days of cloudwashing are over. Everything is cloud so therefore the term is almost meaningless. We're all going back to buying stacks as a service.

However, the real thing tech buyers have to watch is for something I'd call cloud DNA change. 

Pure plays are just different. They pay more attention to user interfaces. Cloud-first players don't have legacy businesses to protect. And cloud-first players don't have sales commission models that will favor big licensing and maintenance deals over recurring revenue subscription models.

To know whether the cloud has changed the DNA of large enterprise companies you'll have to watch what they do and how they behave over time.

In the meantime, don't get locked in to a cloudwashed stack until you're sure there's a culture change you can recognize and actually see as an innovation partner for years to come.

Topics: CXO, Cloud, Data Centers, Enterprise Software, Hardware, The Rebirth of Enterprise Software

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • Opportunity to get a good deal ...

    ... all the big boys thought the cloud was their license to print money, but we are now seeing that it is going to be cut-throat competition, and may really save money for enterprise. Now there's a shock!

    Good article ... it's still early days; it's not yet clear who will survive, let alone who will provide the best service and the best value for money. The great thing is that it's a buyer's market, and buyers need to drive a hard bargain while they have the chance - but not committing to a long term deal, as the market will continue to change fast for a while yet.

    To continue to take advantage, companies need to remember:

    1. "Don't get locked in"
    2. Learn about encryption
    3. Don't assume anything
    4. Shop around
    5. Don't sign a long-term deal - yet.
    6. "DON'T get locked in"
  • dark cloud

    The two issues working against cloud are bandwidth and security. And, unfortunately for cloud, the Snowden leaks happened, meaning trust in these big corporations plummeted. As it stands now I have no intention of trusting our company's confidential documents outside our firewalls. Does that mean I'm entirely safe? Of course not. But at least we're bypassing the NSA cable splices.
    • Hybrid

      Which just lends itself to the hybrid scenario whereby non essential data and processes can be moved to the cloud, to maximize cost benefits, and the rest stays on premise.
  • First Generation SaaS Players: same Sh*t, Different Bucket.

    The problem with cloud computing is that it often brings with it too much baggage from the past. Simply being a pure cloud SaaS offering doesn't, by itself, bring any real innovation. For most first generation SaaS players, when compared to traditional on-premise software and IT services players simply deliver the same sh*t in a different bucket. Second generation SaaS players are delivering more than an infrastructure/subscription fee price advantage: they are delivering the power of prebuilt business logic, design-led solutions that maximises an intuitive user experience - and a mobile-first solution for tablet and smartphone devices.
    Being Guided
  • NSA impact less than expected

    As a Microsoft Cloud Deployment Partner, I was very concerned when the Snowden leaks came out with all the media hype around it. In reality, we have noticed no slowdown in adoption. It may well be that the rapid adoption rate is hiding a slowdown and things might have been ever stronger, but frankly, we could not handle much more right now anyway. As a client told me "Who didn't think the NSA was snooping?"
    • RE: NSA impact less than expected

      Can't speak for anyone else, but for me the surprise wasn't so much that the NSA was snooping (that's what they do), but rather how complicit the Microsoft and Googles of the world were in helping them out. That's where the trust issue comes up.
      • RE: NSA impact less than expected

        Well, did Microsoft and Google jump at the chance to help out the NSA or did the NSA make them a deal they couldn't refuse? That the Microsoft and Googles of the world might be "influenced" to help out also comes as no surprise. There just simply is no way to trust third parties with confidential data. So, in fact, the hybrid scenario is the only scenario that makes any sense.
  • Great Article

    This is a great article. I have been using the term CloudWashing in my presentations for years likening it to how everything was rebranded SOA a few years ago. :-)

    On the subject of existing vendors really moving into the Cloud the exception of course is Microsoft. They have the on-premises software and cloud stack to provide truly hybrid solutions.
    • old as the hills .....

      that sort of rebranding ' how everything was rebranded SOA a few years ago' has been going on for years - back in the 80s every tin-pot database vendor suddenly started rebranding their products as being "relational" even though most of their products were in fact still struggling with inflexible simple file based architectures
  • Yes! Enough with dogma, sometimes 80% of cloud is enough.

    Great piece Larry. I have always bridled a little at the term 'cloudwashing', and was prepared to bust out the torches and pitchforks until I actually read your article. :)

    The whole 'cloudwashing' thing turned very quickly into an almost religious dogma, with the notorious 'cloud truthers', acting like partisan zealots, breathlessly declaring "There is only one true cloud!" (almost always the cloud they were selling, coincidentally), and pillorying any alternative views as thought any contrary thought was a blasphemous apostasy.

    Yes, it is important to have common vocabulary so we understand things the same way. It is important not to use marketing as a smokescreen for real product capability. But it is also important that you do not let (mostly commercially-driven) quasi-religious dogma obscure the potential for business benefits (something I am starting to see in DevOps too, just btw).

    As I wrote a while back, "Sometimes 80% of cloud is good enough" (see http://www.networkworld.com/news/2013/022613-forrester-private-clouds-267108.html)

    Andi Mann
    Office of the CTO
    CA Technologies
  • What I don't get

    Plan A

    I buy a computer, I plug it in (use power), load software, do some computin'. Then throw it away x years later.

    Plan B
    I pay cool hip cloud company(c.h.c.c.) to buy a computer, I pay c.h.c.c. to plug it in, I pay c.h.c.c. to load the software, I do some computin'. Then I don't have to throw anything away.

    There are many factors about scale and how much you spend when BUT if Plan B is to be cheaper either c.h.c.c. can run a cheaper data centre OR c.h.c.c. looses money. Many of them do both - but the universal assumption that "cloud is cheaper" is not necessarily true -usually fashion comes at a premium.
  • cloud-native or cloud-washed

    To identify cloud-washed solution stacks, look at the architecture model behind the service interface: