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Since IBM announced its acquisition of Red Hat some months ago, there have been a number of other deals in the cloud space which, if less lucrative, are nonetheless, significant in the overall enterprise cloud business. The merged vendors now contend with hybrid and multi-cloud competitors on all sides and they just keep coming. Since the IBM-Red Hat deal, there have been significant hybrid cloud announcements from Amazon Web Services, Microsoft, Azure, Google Cloud Platform, Oracle Cloud, VMware, Dell and Cisco. So what is happening in the hybrid cloud space?
Why OpenText With Google?
Only last week, for example, OpenText, which entered a strategic partnership with Google seven months ago, announced it had deepened the relationship to offer services and product integrations that will make it easier for customers to move critical enterprise information management workloads (EIM) to Google Cloud.
Typically, OpenText’s announcements have many different elements to them, in this case the hybrid cloud element really stands out. OpenText intends to use Google Cloud’s offering, Anthos, to deploy and manage containerized EIM application workloads in a multi-cloud environment. The recent news means containerized versions of several EIM applications including Content Server, Extended ECM, Documentum, InfoArchive and Archive Center on Google Cloud Platform (GCP) will become generally available. In addition, Google and OpenText will partner on expanded joint go-to-market activities to help enterprise customers move critical workloads to the cloud quickly and effectively.
Those go-to-market activities will initially focus on industries including financial services, media and entertainment, healthcare and public sector, but are likely to be expanded afterwards.
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Market Share Challenges
Sash Sunkara, CEO and co-founder at RackWare, explained that the cloud market is very heated and the grab for market share is getting much more aggressive. “We can see this in the recent cloud provider acquisitions as well as the level of investments that they are making in their cloud, new data centers, and their technology. ...That goes for Microsoft, Google and AWS, which in many people’s minds, are the top three. But Oracle, IBM, and other big players continue to fight for some market share. There’s definitely not a market win for any single vendor right now.”
She said it will be multi-vendor market for a while and that’s great for the consumer. We are still early in the enterprise adoption cycle, so the investments that each of these cloud providers are making will pay off for them in increasing their market share and their footprint.” So why go to the trouble of two or even several clouds and vendors to create a hybrid environment? Because one cloud doesn't fit all.
Each cloud provider has areas of expertise, excelling in some areas, and lacking in others. For enterprises and organizations hoping to migrate to the cloud, most cloud architects are recommending a hybrid approach for multiple reasons, said Chris Smith, vice president of cloud architecture at Unitas Global. There are two principal reasons:
1. Minimizes potential of downtime: A hybrid cloud strategy significantly decreases the risk of enterprises being affected by a provider outage. Most outages are just in one region because providers have taken precautions to limit the impact of the inevitable, but with a hybrid cloud approach, data stored on multiple cloud environments from multiple providers will be protected against downtime.
2. Allows business to scale with increased agility: Not all cloud solutions are right for every enterprise. By combining the best elements of each provider, companies can take advantage of the customization element of hybrid cloud. Whether using a combination of an on-premises data center and a cloud provider or storing data in both private and public clouds, creating a unique ecosystem of cloud offerings can help enterprises be more agile. Additionally, by not having to rely on physical, in-house infrastructure, rapid-growth enterprises are afforded more cost and time-effective scalability.
Major cloud providers, like Microsoft, are pairing up with smaller providers to give their clients access to both sets of cloud offerings. These partnerships signal a step towards providers offering multi-cloud environments for different Platforms-as-a-Service. With cloud companies following the lead of cloud architects, the whole community is putting their confidence in a hybrid cloud future.
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Security, Regulatory Obstacles
There are also security and regulatory issues. Public cloud providers have realized that not all enterprises are going to move all their apps and data in mass to the public cloud for variety of reasons: security, regulation, mission-critical apps, system lock-in, existing infrastructure investments, low latency, and edge-facing use cases in media, manufacturing, telecom and other industries.
Venkat Ramasamy, COO at Filecloud, said they see a large amount data remains in on-premises infrastructure and there's a significant revenue opportunity if they can bring the public cloud services to private data centers. That is the reason for Azure Stacks, Amazon Outposts, Google Cloud Services Platform and Oracle Cloud at Customer.
That said, cloud provides the scale, flexibility and disaster recovery capabilities for companies when it comes to IT infrastructure. Instead of focusing on building and running their own data center they can focus on their core business and leave the infrastructure aspects to specialists.
However, price is still an issue. “Apart from Azure Stacks, other hybrid cloud offerings are not ready for prime time yet. Their opaque, expensive pricing is also a concern for companies that want to try out these solutions. I expect to see more vertical (industry based) offerings as well as standards based offerings (Kubernetes) getting traction,” he said.
Hybrid in Mid-Market
Chuck Kirchner, senior director in West Monroe’s technology practice and lead of their cloud & infrastructure capability, said even in midsized companies that attraction of cloud and hybrid computing cannot be underestimated. Cloud technologies and availability are the same regardless of the buyer, he said. The difference is more in how they are applied.
However, those at the top of the market may have more buying power or scale to negotiate better pricing, if you’re focusing on cost. However, if cost is the driver, cloud is not always a slam dunk. There is typically a longer-term, positive TCO with cloud adoption, it does often drive higher operational expense, vs. traditional capital expense for purchasing IT equipment.
That said, the cloud has huge benefits, but mid-market companies don’t always have the IT organizations or skillsets to make the right cloud decisions, build the environments and migrate their core business workloads. “The difference between mid-market and large enterprise, we’ve seen, is it’s not unusual for a large enterprise to have multiple public cloud vendors (AWS, Azure and GCP). For the mid-market, it’s best to keep to one of these options.” he said.
The constraints of in-house skills and budget often can’t meet the security and complexity challenges of working with more than one public cloud vendor. Midsize companies will, however, have multi-cloud environments when you consider Software-as-a-Service platforms. Midsize companies should be utilizing these for all corporate IT, non-core business applications such as Concur, ADP and Salesforce.com
Obviously, being in the mid-market with lack of scale and budget demands choices and prioritization for all of these things — people, money, time and resources. Everyone is struggling to hire technologists right now — everyone — and this includes cloud architects. In the mid-market, it can be worse because they have to compete with enterprise customers, Silicon Valley giants, consulting companies etc. on salary and name recognition, but they need the same type of technical talent.
