Microsoft is officially launching the commercial operations of its cloud offerings in China today. It’s been only nine months since Steve Ballmer, the former CEO of Microsoft, made the announcement in Shanghai that Windows Azure — now renamed Microsoft Azure — would be available for preview in the Chinese market.
I call that Episode I of the China Cloud War. In the report that I published at the time, “PaaS Market Dynamics in China, 2012 To 2017”, I made three predictions — predictions that are now being fulfilled. More global players are joining the war; customers have gotten familiar with cloud concepts and are planning hybrid cloud implementations for their businesses; and traditional IT service providers have started to transform themselves into cloud service providers.
I talked with Microsoft and Citrix last week, and I strongly believe that Episode I has ended and Episode II has just begun. In the battle for partner ecosystems and real customer business, here are the three major plots that enterprise architects and CIOs in China should watch unfold:
The thrree kingdoms will fight with the gloves off. In my blog post last year, I described three kingdoms of global vendors in Chinese cloud market: Microsoft, Amazon, and vendors behind open source technology like OpenStack and CloudStack.
Microsoft is leading the market as the first company in China to provide unified solutions for public cloud, private cloud, and hybrid cloud across infrastructure (IaaS) and middleware (PaaS). This builds on its deep understanding of enterprise requirements, its massive developer base, and the ease of use on the Windows platform.
The classic work of Chinese historical fiction “Romance Of Three Kingdoms” describes the history of China after the Han dynasty. This work focuses on three power blocks that fought against each other in an attempt to be the dominant kingdom. After my discussions with many users and vendors at the OpenStack Summit 2013, I see an analogy between these three kingdoms and the evolution of the IaaS market in China as I described it in my report “PaaS Market Dynamics In China, 2012 To 2017” early this year.
Three categories of players are emerging in public cloud market in China, and similar to the Three Kingdoms, these players will fight against each other and collaborate at the same time, accelerating both the adoption and the maturing of cloud solutions in Chinese market.
State of Shu: Amazon Web Services. The king of Shu was the descendant of Han dynasty before the era of the Three Kingdoms; because of his “royal blood,” he had many supporters and followers to fight against the other two kingdoms.
Amazon.com is in a similar situation: It has very good reputation among architects and developers in China. However, Amazon’s promotion activities are lagging. Amazon is trying to expand its cloud territory into Chinese market by building a data center in Beijing and recruiting local personnel. However, its relationship with the government is not as good as Microsoft’s, and Amazon’s ambition to launch AWS in China has been slowed down due to local regulations.
State of Wu: Microsoft Windows Azure and its alliances. The state of Wu is competitive because it has the natural advantage of the Yangtze River, helping it defend against invasion and expand its territory.
Recently we attended a Colt Technology Services analyst day in London. It was great to see a technology services provider who is trying to embrace both disruptive ICT trends and challenges facing enterprise IT. Here is a high level summary of our views from the event:
Dan: Colt views its network assets not as its key differentiators - but its IT services. Although IT services today account for only a small fraction of Colt revenues, Colt views its network infrastructure assets as a means to an end to support IT services. Whilst we agree that network infrastructure runs the risk of commoditisation, Colt’s network helps to differentiate Colt’s offering from both IT service providers without network infrastructure and carriers with a less impressive network footprint. Quality network infrastructure is the basis for developing reliable, secure, and compliant ICT solutions. Maybe Colt ought to view itself more as a communications integrator than an IT Services provider.
John: Colt’s provides a strong European IaaS offering. One of the presentations focussed on Colt’s European datacenter footprint. At Forrester we get many inquiries on hosting and IaaS-specific options for Europe as many clients have to address regulatory and business requirements for data to reside in specific countries. Colt has a substantial number of data centers in European countries including the UK, France, Germany, Spain, Italy, and Switzerland.
Back in October 2011, Microsoft named the initiative to introduce Windows Azure cloud platform into the Chinese market “Moon Cake,” which represents harmony and happiness in Chinese culture. On May 23, 2013, Microsoft made the announcement in Shanghai that Windows Azure will be available in Chinese market starting on June 6 — almost half a year after its agreement with Shanghai government and 21ViaNet to operate Windows Azure together last November. Chinese customers will finally be able to “taste” this foreign moon cake.
I believe that a new chapter of cloud is going to be written by a new ecosystem in China market, and Microsoft will be the leader of this disruption. My reasons:
The cloud market in China will be more disrupted. Due to the regulatory limitations on data center and related telecom value-added services operations for foreign players, the cloud market for both infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) has been an easy battlefield for local players, such as Alibaba/HiChina. Microsoft’s innovative way working with both government and local service partners to break through this “great wall” shows all of the major global giants, such as Amazon.com, the great opportunity from this approach to the Chinese market. We can anticipate that they will also enter the Chinese market in the coming six to 18 months.
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:
Amazon Web Services (AWS) held its first global customer and partner conference, re:Invent, in late November in Las Vegas, attracting approximately 6,000 attendees. While aimed squarely at developers, AWS highlighted two key themes that will appeal directly to enterprise IT decision-makers:
Continued global expansion. AWS cites customers in 190 countries, but the company is clearly pushing for greater penetration into enterprise accounts via aggressive global expansion. AWS now has nine regions (each of which has at least one data center), including three in Asia Pacific: Tokyo, Singapore, and Sydney.
An expanded services footprint within customer accounts. The major announcement at re:Invent was a limited preview of a new data warehouse (DW) service called Amazon Redshift — a fully managed, cloud-based, petabyte-scale DW. As my colleague Stefan Ried tweeted during the event, with a limit of 1.6 petabytes, this is not just for testing and development — this is a serious production warehouse.
On July 11, 2012, SingTel launched its PowerON Compute cloud service in Hong Kong. While certainly interesting on its own, I believe this announcement is particularly noteworthy as a harbinger of things to come.
Some key points to consider:
As a hybrid offering, PowerON Compute is a dynamic infrastructure services solution hosted in SingTel’s data centers in Singapore, Australia, and now Hong Kong. The computing resources (e.g., CPU, memory, storage) can be accessed either via a public Internet connection or a private secured network.
This announcement confirms the findings of my February 2012 report, “Sizing the Cloud Markets in Asia Pacific”: that market demand for cloud-based computing resources in Asia Pacific (AP) will rapidly shift from infrastructure-as-a-service (IaaS) to dynamic infrastructure services.
Based on the very high interest in this blog and its cloud predictions we are planning to host a Forrester Teleconference entiteled "2012 — The Year The Cloud Matures: A Deeper Dive Into 10 Cloud Predictions For The Upcoming Year" on February 28th, 1-2pm EST/6-7pm UK time, where we will highlight and go through the 10 below predictions one by one. For more details and registration please follow the link to the: teleconference web page.
1. Multicloud becomes the norm
As companies quickly adopt a variety of cloud resources, they’ll increasingly have to address working with several different cloud solutions, often from different providers. By the end of 2012, cloud customers will already be using more than 10 different cloud apps on average. Cloud orchestration will become a big topic and an opportunity for service providers.
2. The Wild West of cloud procurement is over
While 2011 still witnessed different stakeholders within a company brokering (sometimes unsanctioned by IT) a lot of cloud deals, most companies will have established their formal cloud strategy by the end 2012, including the business models between IT and lines of business for their own, private cloud resources.
I recently published an update on power and cooling in the data center (http://www.forrester.com/go?docid=60817), and as I review it online, I am struck by the combination of old and new. The old – the evolution of semiconductor technology, the increasingly elegant attempts to design systems and components that can be incrementally throttled, and the increasingly sophisticated construction of the actual data centers themselves, with increasing modularity and physical efficiency of power and cooling.
The new is the incredible momentum I see behind Data Center Infrastructure Management software. In a few short years, DCIM solutions have gone from simple aggregated viewing dashboards to complex software that understands tens of thousands of components, collects, filters and analyzes data from thousands of sensors in a data center (a single CRAC may have in excess of 20 sensors, a server over a dozen, etc.) and understands the relationships between components well enough to proactively raise alarms, model potential workload placement and make recommendations about prospective changes.
Of all the technologies reviewed in the document, DCIM offers one of the highest potentials for improving overall efficiency without sacrificing reliability or scalability of the enterprise data center. While the various DCIM suppliers are still experimenting with business models, I think that it is almost essential for any data center operations group that expects significant change, be it growth, shrinkage, migration or a major consolidation or cloud project, to invest in DCIM software. DCIM consumers can expect to see major competitive action among the current suppliers, and there is a strong potential for additional consolidation.
A project I’m working on for an approximately half-billion dollar company in the health care industry has forced me to revisit Hyper-V versus VMware after a long period of inattention on my part, and it has become apparent that Hyper-V has made significant progress as a viable platform for at least medium enterprises. My key takeaways include:
Hyper-V has come a long way and is now a viable competitor in Microsoft environments up through mid-size enterprise as long as their DR/HA requirements are not too stringent and as long as they are willing to use Microsoft’s Systems Center, Server Management Suite and Performance Resource Optimization as well as other vendor specific pieces of software as part of their management environment.
Hyper-V still has limitations in VM memory size, total physical system memory size and number of cores per VM compared to VMware, and VMware boasts more flexible memory management and I/O options, but these differences are less significant that they were two years ago.
For large enterprises and for complete integrated management, particularly storage, HA, DR and automated workload migration, and for what appears to be close to 100% coverage of workload sizes, VMware is still king of the barnyard. VMware also boasts an incredibly rich partner ecosystem.
For cloud, Microsoft has a plausible story but it is completely wrapped around Azure.
While I have not had the time (or the inclination, if I was being totally honest) to develop a very granular comparison, VMware’s recent changes to its legacy licensing structure (and subsequent changes to the new pricing structure) does look like license cost remains an attraction for Microsoft Hyper-V, especially if the enterprise is using Windows Server Enterprise Edition.