Recently William Fellows, Principal Analyst and Founder of the 451 Group, published a market insight on Red Hat's formation of a cloud business unit. While that move makes some sense for Red Hat, it served to make me review all of the many recent announcements coming from suppliers of hardware, software, professional services and hosting/managed services declaring that they're jumping on the cloud bandwagon and have formed a cloud business unit.
This reminds me of earlier trends in which many of these same suppliers created open systems (read UNIX) business units, Linux business units, client/server computing business units, object oriented development units and the like.
Why do they take this step? Here are a few strong possibilities.
- Some of these companies want to present the impression that they're keeping up with the trends and are very innovative. In truth, many are really just renaming something to use the current catch phrase or buzz word.
- Some of these suppliers want to gather staff having key expertise in an area into a single cohesive unit in the hopes of creating the space and offering them the resources necessary to create better products, services and go-to-market strategies. There are cases, however, in which this appears to be merely an attempt to rearrange the deck chairs on the Titanic rather than truly innovative thinking.
- Many companies do this as a way to ride on the wave of hype centering on a specific topic. It allows them to say "me too!" and be believed for a time.
- It gives them an attachment point or pressure equalizing docking bay so that when they purchase smaller suppliers the employees don't jump ship due to vast cultural differences that may exist between the acquired company or companies and the "mother ship."
We all have to watch carefully over a period of time to learn whether this move was made to create an impression of innovation or really gather together all of the forces necessary to plot a new course, develop new technology and sail off into a different, perhaps better, sea.
When viewed over the long term, however, these business units tend to only have a short life. If creation of the business unit really means "keeping on keeping on" under a new name and doesn't actually change how the company thinks or does business, nothing much will happen. In this case, the business unit that was created with a great deal of fanfare will quietly be re-absorbed back into the company or merged into another business unit.
I guess we all have to wish good luck to all of those suppliers who have recently launched cloud computing business units or divisions. For a few, it will be a winning move. For many, it will turn out to be a rehash of things they've already been doing and not much will change. For some, it will be another in a long series of moves designed to give the impression of progress rather than really offering their customers something new and better these companies are really writing their own foot note for IT industry history.