Beyond the hype around cloud computing and its variants, there is growing acceptance of the notion that the buying criteria of end customers has moved from a discussion of how the technology chosen and provided to a discussion of what value the technology is providing. This provides the new frame of reference for customers and IT providers alike. We are finally getting to fully connect the business objectives and requirements with IT services delivery. Given IBM's announcement today of a new data center in Auckland and a Cloud Computing application research center in Hong Kong, there is growing evidence that organizations are increasingly more interested in moving much of their data center operations to off-premise providers. When we set aside details such as massively scalable processing, virtualization, service orientation and always-on access; we have nothing short of a major evolution of business itself. The key will be in pricing strategies of such services because smart IT shops can always reverse engineer your cost structure for standard cloud platform offerings as they consider the option of "private clouds" (a term I utterly detest). IBM references "private clouds" as those configurations where customers have dedicated computing and resources for their own business. They are compute and infrastructure technology stacks, nothing more magical than that. The provider profit margin and value will result from their ability to optimize everything behind the service boundary while hiding complexity from the end customer. That is something worth paying for!
Results tagged “cloud computing”
Sun is a company that has been in transition from a legacy hardware business to one based on open-source and services. Their exit ramp led to IBM, but will this be a traditional IBM "tuck-in" acquisition or something more? Acquiring Sun for a mere $6.5 billion is only two quarters of $JAVA revenue and if you factor in the $2 billion in cash on their balance sheet, the offer is closer to $4 billion. Sun is exposed to financial services, telecom & manufacturing. They also face secular decline of their Unix servers and tape storage. Newer technology offerings are not scaling up fast enough to offset margin and revenue erosion. IBM will ave difficulty monetizing Sun's open-source software portfolio too. Many application vendors support Linux faster than Solaris, and even with MySQL, they've not been able to get critical mass for OpenSolaris. Maren Mickos, former MySQL CEO bailed from Sun because of the bureaucracy. IBM gets Java but will they keep the way the Java community directs the development of the language? So now IBM will have dueling UNIX banjos. What's the future of AIX? IBM gets an installed base that they can migrate over time but those customers will open up to other competitive choices, so it's no slam dunk. I believe Sun's NetBeans development environment goes by the wayside in favor of IBM's Eclipse. Sun's purchase of Q Layer bolsters their cloud computing offering, but they were just getting started with innovations like Project Caroline. Still, Sun could never show CIOs why they should pay a premium for their products. Sun sells to developers, IBM sells to CIOs. Not sure which one is Billy Redden in this case.