The investment community got cold feet over Amazon’s recent (lack of) earnings report. For a company that’s always been focused on growth at the expense of profit, what has really changed?
Now Amazon doesn’t break out data on its Amazon Web Services business, but according to the tea leaf readers, the company’s cloud business is showing signs of a brutal price war with Google and others.
Some folks will disagree with me, but when it comes to price wars, my take is “bring it on!” It’s tough to charge a premium for vanilla-flavored cloud services when these providers have been boasting for so long about how elastic and scalable those services are.
The goliath cloud providers need more than mass-market services to fit the needs of those more complex enterprises. They have to figure out a way to marry public cloud services with private, legacy systems. That’s why everybody is buzzing over hybrid clouds, or what they think are hybrid clouds.
Some say hybrids are a mix of public cloud and private cloud resources. Network World’s Brandon Butler recently penned an article with the theme that cloud management is really about managing the old and the new IT worlds. That latter view seems more like the real-world view to me.
In a Forbes Blogs contribution earlier this year, Mike Kavis of cloud consultancy Cloud Technology Partners noted that larger enterprises “have complex heterogeneous environments with years of legacy, tons of existing infrastructure, and cultures that are used to owning and controlling infrastructure.” Some of that legacy stuff just won’t go gently into that good cloud.
It is going to take a long time to dislodge a mission-critical transactional system if it takes a lickin’ and keeps on tickin’. With those core investments, enterprises don’t want a ‘rip and replace’ strategy, they want an evolutionary, pain-free migration strategy. “The important decision for IT leaders is to consider how fast do they want to embrace these “new” technologies, like hybrid clouds, while still supporting the old legacy ones,” Butler noted.
While IT budgets are unquestionably shifting away from on-premise infrastructure solutions for new and replacement systems, the most likely future scenario will be a hybrid based on need, one which utilizes the strengths of a modern data center architecture with the scalability and elasticity of the public cloud. Expect to see continued investment in on-premise data centers, but with opportunistic use of Infrastructure-as-a-Service.
In the meantime, shed no tears for Amazon and the other bruised combatants in the cloud price war. Investors may not like them, but these battles are great for customers.