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For example, HP jumped into the public cloud market last summer when it rolled out its OpenStack-based HP Cloud Services. According to Dan Baigent, senior director of business development for HP Cloud Services, there is certainly a "pent-up" need for public IaaS. "We expect to see the most interesting growth patterns in that space," he says, arguing that HP's long-standing relationship with enterprise customers will help it make inroads there. It's difficult for enterprises to support multiple clouds from different vendors, Baigent says, and getting both parts of the hybrid cloud from the same provider can simplify that prospect.
Treadway argues that many public cloud vendors will go under. "It's very hard to play in the Amazon game. The margins are small and if you don't offer a differentiating value, you are very likely going to fail," Treadway says.
Lydia Leong, research vice president at Gartner, agrees that 2013 will see some corrections to the public cloud market, pointing to Web hosting vendor GoDaddy quietly closing the doors on its public cloud operation in October as a prime example. "These closures certainly don't give any kind of signal that cloud computing is a failure. They simply demonstrate that it doesn't make sense for every vendor to compete in that market," she says.
If hybrid clouds are the deployment of choice, EMA's Corbo says the IT industry has to make significant inroads on how to manage that type of environment in terms of resource provisioning, scalability and performance.
"It's unfortunate that the IT industry seems to build infrastructure, and managing it is always an afterthought," Corbo says.
IDC issued a report in August that said the worldwide cloud systems management software market grew dramatically, totaling an estimated $754 million in 2011, an increase of 84.4% over 2010. The top two vendors, CA Technologies and VMware, benefited from market demand for a range of capabilities beyond self-service provisioning.
These include automated infrastructure orchestration and virtualization management used to enable dynamic infrastructure resource pooling and sharing across multiple workloads and user groups, and the ability to track cloud resource consumption to support life-cycle management, capacity planning and chargeback.
IDC listed the other top players in that market - determined by revenue - as HP, IBM and BMC. That said, more than 63% of the revenue these companies raked in came from sales to companies managing private clouds only.
IDC expects most successful cloud systems management software vendors will offer customers a wide range of capabilities beyond self-service portals and automation and will be architected to support heterogeneous hypervisor and hardware platforms, as well as a range of hybrid cloud scenarios.
RightScale, a company that bucks Corbo's assertion that management is an afterthought, has offered a service since 2006 that integrates with multiple clouds and allows users to view federated cloud deployments from a single dashboard. The company boasts of a 4.7 million customer base supporting a variety of public and private cloud platforms, including Amazon Web Services, Windows Azure, Google Compute Engine, Datapipe, HP, Logicworks, SoftLayer and Tata. On the private cloud side, RightScale can be used to manage workloads on the OpenStack, CloudStack and Eucalyptus platforms, all of which are open source.
Other startups that have jumped into this space include Cohuman, Okta, Scalr, Tier 3.
Brian Donaghy, CEO of Appcore, a cloud services company in Des Moines, Iowa, that offers a portfolio of private, public and hybrid services, says that developing the skills to manage a multi-cloud environment will make IT professionals a hot commodity in the next year as well.
Early adopters of the cloud tended to take on the technology when they were building singularly focused greenfield applications. "So the issues associated with integrating either legacy systems or other cloud-based application was not so urgent," says Martin Capurro, a product manager at Savvis Direct, a public cloud service offered by national telco CenturyLink. "They are now."
IDC predicts that by 2015, nearly $1 of every $6 spent on packaged software, and $1 of every $5 spent on applications, will be consumed via the software as a service (SaaS) model. As enterprises buy more and more of their applications as SaaS, issues of integrating the applications themselves, developing security and auditing processes across them, and figuring out how to create B2B links with partners using the same applications will all need to be addressed.
Cloud service brokerage (CSB) schemes set up by cloud providers themselves seek to address the first problem while systems integration services and integration hubs seek to address the latter two.
"CSB" was the phrase for cloud arbitrage that Gartner coined in 2009. More recently, NIST has defined this category of service providers as "an entity that manages the use, performance and delivery of cloud services and negotiates relationships between cloud providers and cloud consumers."
Practically speaking, CSBs are the middlemen that aggregate SaaS applications in the cloud and supply a portal by which its customers can buy, access and somewhat control the use of multiple multi-tenant cloud applications within their own companies. The broker negotiates a good price that is passed onto the customer, provides a single point for end users to sign onto these applications and presents the IT department with one monthly bill.
According to Treadway, integration hubs - defined as single integration points between multiple cloud applications - are much needed today, but are more difficult to pull off than CSBs. That's because many custom-built cloud applications are not built using standard APIs, which means that linking them to any other application requires a spaghetti network of connections that is nearly impossible to maintain, he says. The problem is further exacerbated by the proliferation of devices most cloud applications are now required to support.
Almost every major player in the IT space that bases a big chunk of its business on integration has a play in this market, as well. Startups include Cordys and Informatica.
"The advice I give clients is to make sure they have a comprehensive integration strategy developed upfront, and only build or buy applications that have standard APIs and were built within a service-oriented architecture," Treadway says.