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  1. #1
    WHT-BR Top Member
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    Dec 2010
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    [EN] How is the big switch to the public cloud working out?

    The shareholders of any publicly held company won’t allow it to spend the required many billions of dollars and depress earnings for the five or more years it takes to build a profitable cloud business.

    Chris Mellor
    25 Oct 2017

    We know it's only patchily working for business users, as public cloud adoption is going up but is still not a serious threat to on-premises giants.

    Both camps, the public cloud pushers and the on-premises-first group, can say they are doing OK.

    We spoke to Oracle cloud evangelist Chuck Hollis on why his firm thinks you should shift off-premises and whether it's eating its own dog food.

    El Reg: Tell us about the rise of the public cloud as you see it.

    Chuck Hollis: I too thought the vast majority of on-premises IT vendors would face a bleak future: fighting harder for their share of a shrinking pile of table scraps as they become increasingly irrelevant. None of the on-premises players look to have good prospects: Cisco, Dell, HP et al. Not sure if their customers were aware of what the future would hold, or not.

    I thought the only way an on-premises vendor could have a relevant cloud story was to actually have a cloud.

    El Reg: Why was this?

    Chuck Hollis: When I was at EMC, we thought of all sorts of clever ways to make our products work with other vendors’ clouds, but realized we were just making it easier for our customers to become someone else’s customers.

    I think that same thought has come up at NetApp, HP, VMware et al.

    My boss Dave Donatelli was also making dire predictions way back when (July 2015): “If you’re in the infrastructure business the cloud has fundamentally changed the industry. Hardware companies are trying to sidestep the issue with marketing and by attempting to position themselves as ‘cloud arms dealers,’ but the fact remains—any hardware vendor without a successful public cloud business will face significant business challenges.”

    El Reg: Why did Oracle go into the public cloud business and not the others?

    Chuck Hollis: Why aren’t the traditional on-prem vendors getting into the cloud game? The short answer: they can’t.

    El Reg: Why not?

    Chuck Hollis: I think that’s for two reasons.

    First, the shareholders of any publicly held company won’t allow it to spend the required many billions of dollars and depress earnings for the five or more years it takes to build a profitable cloud business.

    The antidote? Founder money. Amazon, Microsoft, Google, Oracle et al have founders who own a significant amount of stock. So they can prevent activist investors from storming the citadel.

    El Reg: And the second?

    Chuck Hollis: You need a natural franchise. Amazon got first mover advantage, congrats to them, they picked vast swaths of developers who were under-served in the market by the on-prem crowd. They build a franchise from scratch, good for them. Microsoft has their natural desktop/workgroup/collaboration franchise. Oracle has enterprise database and the applications that use them.

    Note that VMware could be argued to have a natural franchise (second point), but got tripped up by the first (it’s way expensive). HP? Dell-EMC? Cisco? Even IBM is hamstrung by these two points, despite a continual struggle.

    ... A lot of what passes for “strategy” these days from the on-premises vendors I see as simply buying time.

    El Reg: What about mission-critical applications not moving to the cloud?

    Chuck Hollis: [There's] a critical mass of enterprise applications that form the gravity well for enterprise IT.

    You know, the important stuff. In the enterprise IT world, those enterprise apps sit at the very centre of the universe. It’s hard to envision any important business process that doesn’t touch enterprise apps.

    The real game in enterprise IT are those enterprise apps, what’s the play?

    El Reg: What - and how - is Microsoft doing here?

    Chuck Hollis: I think Microsoft did a solid job with Azure. If anything, I personally see it more of a relevant competitive threat to Oracle’s ambitions than anything AWS or Google could muster up. Too soon for me to have an opinion on Huawei.

    Microsoft has led their on-premises franchise right into their cloud and now they’re trying to expand. But I think they’re missing something important: [the] critical mass of enterprise applications. ...

    Strategically, I find this interesting, as most everything important in an enterprise IT landscape revolves around those beefy, mission-critical apps. All data captured leads there: web data, IoT. All business decisions are made there: analytics, big data, ML, etc. All actions within a business are driven by enterprise apps.

    El Reg: And Amazon?

    Chuck Hollis: The mainstream press points at Amazon as the “market leader”. True, by revenue, mostly IaaS. But there’s a whole lot of enterprise workloads left to go to the cloud. And if you’d like to get an IT manager riled up over dinner, ask them how their AWS experience is going.

    Bottom line: Amazon built a successful cloud, but it’s not designed to work the way most enterprise IT organizations need to work. That was never the intent. As a result, a lot of time is spent piecing things together and making them work, sort of as we did in the on-premises era.

    It’s certainly a candidate if you’re building a greenfield application, but that’s not most of enterprise IT.

    El Reg: OK, you're going to tell us Oracle is doing it better, so tell us.

    Chuck Hollis: Oracle not only has its enterprise application business, it also has been the preferred database for so many ISV enterprise apps...

    Oracle’s view is simple: SaaS suites win in the long term.

    SaaS starts with ERP (after all, financials are the core of any business), and then expands to other areas of the business. Right now, Oracle is doing quite well in SaaS ERP, which is a good thing if you look at the broader context. We’re also starting to see our successful SaaS ERP customers starting to add human resources, customer experience and so on. So the strategy appears to be working.

    We have this belief that things that are designed to work together will ultimately be better than lashing up a bunch of separate SaaS providers, as people are discovering...

    If people don’t want to move to SaaS, we lift and shift their enterprise app landscape to our cloud.

    El Reg: And if business really doesn't want to move enterprise apps to the cloud?

    Chuck Hollis: For folks who want a cloud experience but don’t want to move to a public cloud for any number of reasons, Oracle offers Cloud at Customer, which is essentially our public cloud delivered as a service in the customers’ data centre.

    It’s a bit different than Azure Stack in that Oracle provides the complete solution: hardware, software, operations, etc...

    El Reg: Has Oracle moved its enterprise apps to the cloud?

    Chuck Hollis: [Oracle] has re-implemented its entire business on a modern cloud platform – SaaS, PaaS and IaaS. Remember we’re talking a ~$200bn market cap company here – no easy trick. The fun thing is that I’m part of a project to document the before and after around a whole raft of internal business metrics. The comparison is stunning, to say the least.

    https://www.theregister.co.uk/2017/1...cle_interview/

  2. #2
    WHT-BR Top Member
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    Dec 2010
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    18,573

    Colocation services: a growing market

    Survey finds moving workloads to cloud works for many, but not for everyone

    Why Companies Move Apps from Colocation to Cloud, and Why Some Move Back

    Wylie Wong
    Oct 25, 2017

    Despite stiff competition from the cloud, colocation providers have a bright future and will get their fair share of the business as enterprises increasingly outsource their data center operations, an industry analyst said.

    Cloud is the fastest growing portion of the data center market, with global operational square footage hosting cloud infrastructure expected to increase at a 16 percent compound annual growth rate (CAGR) from 2017 to 2020. But in that time span, colocation and the wholesale sector will also grow a healthy 7 percent CAGR, according to a recent report by 451 Research, titled Customer Insight: Future-Proofing Your Colocation Business.

    “The clear trend is that capacity is being redistributed,” said Rhonda Ascierto, research director of data centers and critical infrastructure at 451. “Applications are going from on-premises to off-premises, and they will go to both the public cloud and colocation providers.”

    In fact, the report predicts that the amount of on-premises enterprise data center capacity will drop four percentage points, from 77 to 73 percent, between this year and 2020. Public cloud providers will capture much of that business and will see global data center capacity jump three percentage points, from 8 to 11 percent, while colocation providers will see capacity increase 1 point, from 15 to 16 percent.

    Rackspace, a managed cloud provider, sees the same trend. While many enterprises will still operate their own data centers, they want to offload applications to a mix of outside providers, said Matt Bradley, chief strategy officer at Rackspace.

    For example, a large enterprise customer may take a tiered approach: keep their mission-critical applications in-house but choose Rackspace for a variety of services, including managed hosting, managed private cloud, managed public cloud and colocation services.

    “Most of our customers take multiple services from us. It’s usually a combination,” Bradley said.

    Enterprise Apps Migrate Both Ways

    Interestingly, in the analyst firm’s survey of 454 colocation customers, 62 percent said they moved applications from colocation to the public cloud during the past two years. But in that same period, 41 percent moved applications from the public cloud back to colocation facilities.

    The movement in both directions shows that customers are still developing and testing out their approaches as they build out their next-generation digital infrastructure, the report said.

    Among those moving applications from colocation to cloud, 63 percent said the public cloud has lower prices and 59 percent cited increased functionality of cloud-based software.

    “There is a huge appetite for public cloud services with its ease of use. There is no data center to maintain, and the cost of public cloud continues to fall,” Ascierto said. “And public cloud providers have done a fantastic job giving organizations and developers feature-rich tools to develop and test their applications. It’s a huge draw.”

    In addition, 39 percent of customers surveyed said their capacity requirements are unpredictable or fluctuating, and the cloud’s ability to scale was a reason they moved apps from colocation to the public cloud, she said. Another 32 percent cited the cloud’s enhanced backup options as a driver.

    “Sometimes they want to reduce IT staff and are looking for more flexibility in a provider,” Bradley said. “They have ease-of-use, agility, or cost reasons, or simply don’t want to be in the management business anymore. When you move out of colocation to a managed model, you no longer have to manage the data center, and that frees up your team.”

    Cost Comparisons Vary Widely

    While more than half of those surveyed said cloud was cheaper than colocation, cost is also a big reason many colocation customers migrate applications from cloud back to colocation facilities. Of those that switched back, 45 percent believed colocation providers are less expensive, and 39 percent said costs are more predictable than in the public cloud.

    “That shows that the customer cost experience for either option is highly variable,” Ascierto said.

    For example, 451 often hears about cases where users in organization spins up virtual machines, and when the VMs are no longer necessary, the users forget about them, while the organization continues to pay for them. As a result, managing cloud spending is extremely challenging for large organizations, she said.

    A healthcare provider also recently told 451 that storing vast amounts of medical records is cheaper on-premises or in a colocation facility than in the cloud.

    The public cloud is not always cheaper. It depends on customers’ utilization and their requirements,” she said.

    Risk and Performance

    Other reasons companies move applications from cloud to colocation include latency or performance issues with public cloud (47 percent), security risk concerns (37 percent), and regulatory requirements (13 percent). Another 34 percent said they developed and tested the app on the cloud, but when it was ready for production they preferred to move it to a colocation facility.

    “The value of colocation is lower risk and greater control, and the fact that colocation providers have highly available performance is one aspect where colocation has a clear advantage,” Ascierto said. “Unlike[WW1] public cloud data centers, colocation providers typically offer multiple redundant backup systems to avoid system performance issues.” Cloud providers mostly have good availability records, but their service level agreements vary widely.

    Furthermore, she added, a lot of hyper-scale cloud companies use colocation facilities themselves. They may lease colocation space to test new markets, or because they are growing so fast, they may need to add capacity in existing markets by using colocation facilities.

    Overall, Ascierto sees colocation services as a growing market. As enterprises outsource their data center services, they still have a lot of legacy mission-critical applications that have strict data governance, security, latency, and availability requirements, and colocation facilities are often the perfect home for those applications.

    http://www.datacenterknowledge.com/c...some-move-back

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