According to CRN’s article on the event, Gelsinger was quoted as saying, “"We want to own corporate workloads. We all lose if they end up in these commodity public clouds. We want to extend our franchise from the private cloud into the public cloud and uniquely enable our customers with the benefits of both. Own the corporate workload now and forever."
Forgive my frankness, Mr. Gelsinger, but you just don’t get it. Public clouds are not your enemy. And the disruption they are causing to your forward revenues are not their capture of enterprise workloads. The battle lines you should be focusing on are between advanced virtualization and true cloud services and the future placement of Systems of Engagement versus Systems of Record.
You've told your ITOps team to make it happen, you've approved the purchase of cloud-in-a-box solutions, but your developers aren't using it. Why?
Forrester analyst Lauren Nelson and myself get this question often in our inquiries with enterprise customers and we've found the answer and published a new report specifically on this topic.
Its core finding: Your approach is wrong.
You're asking the wrong people to build the solution. You aren't giving them clear enough direction on what they should build. You aren't helping them understand how this new service should operate or how it will affect their career and value to the organization. And more often than not you are building the private cloud without engaging the buyers who will consume this cloud.
And your approach is perfectly logical. For many of us in IT, we see a private cloud as an extension of our investments in virtualization. It's simply virtualization with some standardization, automation, a portal, and an image library isn't it? Yep. And a Porsche is just a Volkswagen with better engine, tires, suspension, and seats. That's the fallacy in this thinking.
To get private cloud right, you have to step away from the guts of the solution and start with the value proposition. From the point of view of the consumers of this service — your internal developers and business users.
We all know the conventional wisdom about cloud computing: it's cheap, fast and easy. But is it really that much cheaper? Or is it simply optics that make it appear cheaper?
Optics can absolutely change your perception of the cost of something. Just think about your morning jolt of coffee. $3.50 for a no-foam, half-caf, sugar-free vanilla latte doesn't seem that expensive. It's a small daily expense when viewed by the drink. It appears even cheaper if you pay for it with a loyalty card where you don't even have to fork over the dough and the vanilla shot is free. But what if you bought coffee like IT buys technology? You would pay for it on an annual basis. That $3.50 latte would now be about $900/year. For coffee? How many of you would go for that deal? That's optics and it plays right into the marketing hands of the public cloud services your business is consuming today.
But optics aside, is that $99/month per user SaaS application just another $20,000 per year enterprise application? Is that $0.25 per hour virtual machine just another $85 per year hosted VM? No, it's not the same. Because the pricing models are not just optics but an indication of the buying pattern that is possible. If you buy it the same way you do traditional IT, then yes, the math says, there's little difference here. The key to cloud economics is to not buy the cloud service the same way you do traditional IT. The key to taking advantage is to not statically and rotely consume the cloud. Instead, consume only what you need when you need it — and be diligent about turning off when you aren't.
In 2011, my colleague James Staten and I published two light-weight vendor assessments on the private cloud and public cloud market. These solutions sit at the extremes of the IaaS market. To kick off 2013, I published a full vendor evaluation of a market that sits in between these two IaaS deployment types — hosted private cloud. Forrester's Forrsights Hardware Survey, Q3 2012 showed that 46% of enterprises are prioritizing investments in private clouds in 2013. While slightly more than half plan to build a private cloud in their own data center, more than 25% said they prefer to rent one. Hosted private cloud opens the door to a variety of benefits: 1) You reach cloud from day one. 2) Compute is dedicated from other clients. 3) It can enable future hybrid scenarios. 4) Easier-to-meet licensing and compliancy requirements. 5) Outsourcing the setup of the cloud and management of the infrastructure to focus on support and utilization.
Overall this report revealed no leaders, but it did show some strengths and weaknesses across the market and provide framework and sample criteria to assess vendors within this space. This research process also revealed some unexpected nuances within this space:
Hosted private cloud and virtual private cloud are often used interchangeably within the market — despite being distinct deployment types.
Level and method of dedication varies greatly by solution.
Layers managed differ greatly by solution.
Although agility is a benefit, few enable self-service access to resources to its end users. Ticket-based request systems are common.
Many enterprises are using hosted private cloud for some unexpected advantages:
Hybrid clouds are especially subject to the law of unintended consequences, says Forrester’s cloud expert James Staten. Many IT organizations don’t even acknowledge that they have a hybrid cloud. The reality: If enterprises are using public cloud software-as-a-service (SaaS) and/or deploying any custom applications in the public cloud, then by definition they have a hybrid cloud, because it almost always connects to the back end.
In this episode of TechnoPolitics, James implores CIOs and IT professionals to get serious about hybrid cloud now to avoid spaghetti clouds in the future.
Over the last couple of years, I've fielded a number of inquiries from Forrester clients who are trying to decide whether their company should move their email and other collaboration workloads into the cloud via Google Apps for Business or Microsoft Office 365. This conversation has gained so much momentum that I recently did a podcast with my colleague Mike Gualtieri on the subject, will host a teleconference covering the topic on February 26, and will soon publish a report detailing answers to five of the common questions that we get about online collaboration and productivity suites (which include Office 365, Google Apps, and IBM SmartCloud for Social Business). Fueling this extended conversation are business and IT leaders' deliberations over one question: Is there a right or wrong in selecting one vendor's offering over the other? I'll use a typical analyst hedge to answer: It depends.
It's not controversial that business success today depends more than ever on IT performance. Business processes and IT operations are highly interdependent and tightly linked. Alignment between the two is no longer an option—it’s a requirement to stay competitive. Your business customers won’t succeed in today’s dynamic economy without IT behind them, but business customers care about outcomes, not technologies. The more you can think like they do, the better your relationship will be, the better your outcomes will be, and frankly, the better your future job prospects will be.
Forrester calls the evolution of IT from a provider of technologies to a broker of business services the “IT to BT (business technology) transformation.” Key to this shift is rethinking IT’s role in the enterprise and, in particular, rethinking current IT processes and the tools used to support them. Many IT organizations have improved workload, application release, run-book, data transfer, and virtual machine management processes, to name a few, through automation—yet still fail to deliver the agility and responsiveness their business customers demand.