Last fall the hybrid cloud meme caught many of the public cloud enthusiasts by surprise. Yet as enterprises go from cloud-dabbling to cloud adoption, hybrid cloud is quickly becoming established as the mainstay of cloud adoption for larger enterprises. This momentum towards highly elastic, reliable and secure operating environments that span data centers and clouds is leading to two pivotal battles.
Each will have a significant impact on the fortunes of several leading technology companies, including Microsoft (MSFT) and VMware (VMW) and a variety of software and hardware-bound technology companies including -- but not limited to -- HP (HPQ) and Cisco (CSCO) as well as dozens of retail and wholesale data center services operators. The next 10 years in IT promises to be as exciting as the last 30.
These battles are already engaging enterprises, cloud service providers, systems integrators and consultants and an emerging flock of software and service platforms that offer or promise varying levels of cloud migration services and solutions. These two battles are simply two stages of a broader war between users and vendors for control over capabilities, costs and profits.
First Battle: Product Maturity and Manual Processes are Key
The first battle is already engaging legions of cloud migration consultants across a variety of firms. Hybrid clouds are being built slowly and carefully by highly trained onshore and offshore experts leveraging proprietary tools combined with extensive manual processes. According to our sources, a typical hybrid cloud can cost between $300,000 and millions per application to build, based on the size and complexity of the application and the services required for its successful operation. These clouds are the exception to the cloud adoption movement today because of risk and expense. Yet they are typically powerful, elastic, resilient and expensive.
There are very few hybrid clouds today (in the truest sense, as a seamless operating environment combining data centers and clouds) because of expense and risk issues tied to cloud migration and deployment. Many of these apps have to be virtualized and/or re-architected to function in ways for which they were not initially designed. Then there are the cloud migration services expenses, for items like discovery, blueprinting, provisioning, synchronization and service provisioning.
The hybrid cloud should not to be confused with the tactical public clouds created today primarily for cloud-based development and test environments, and small tier 2 and 3 tier applications. Out of the $1.5-$3 trillion enterprise IT market, the tactical public cloud spend likely accounts for perhaps $3-$4 billion in spend. The hybrid cloud battle is being fought for the rest of the spoils (perhaps as much as $1-2 trillion -- based on the sheer variety of apps that get deployed in the cloud).
Second Battle: Will be driven by Cloud Migration Automation and Product Maturity
The second battle won't be one of manual processes, but rather the extent that these processes can be automated. The vast majority of today's cloud migration solutions have been developed for the first battle and automate pieces of each applications hybrid cloud puzzle, but often still require copious amounts of manual labor and risk or architecture compromises that limit efficacy for production workloads, the vast majority of IT application spend across the board.
Like the difference between the first two world wars, the replacement of manual processes (cavalry to modern armor for example) will shift power from today's establishment (manual horsepower) to an emerging elite of companies who embrace the automation payoff. And it's all really a question of "when instead of if."
When it comes to automation of critical hybrid cloud processes, VMware is today the unquestioned leader from both a product and vision standpoint. Microsoft is coming on strong, like nothing anyone could have expected as recently as 18 months ago. Amazon (AMZN) has similarly started to build out ranks of experienced enterprise sales pros, combined with perhaps the de facto standard of excellence when it comes to any cloud (scale, security, management tools, availability of APIs for critical infrastructure services, etc.).
Yet the critical element of momentum will perhaps not be driven by operating expense or by thought leadership or even product superiority, but rather by the sheer cost, time and risk required for deployment. This has been discussed in Cloud Migration and a 60s Castaway Comedy. That is why I think that cloud migration automation will be the deciding factor. It will determine how fast one player versus another can accelerate (think streamlining expense, time and risk factors) the onboarding of customers.
That is why I think it is compelling to look at key players from the standpoint of automation capabilities, especially when it comes to application and service agility. VMware certainly leads when it comes to the mobility of virtual workloads, hence the sheer influence of the virtualization requirement for much of today's cloud migrations. VMware also has its share of legacy challenges and potential go to market conflicts that could slow growth.
That puts Microsoft in a good position, as mentioned in Azure and the Hybrid Cloud Race. Its domain expertise with software and applications and as being a robust service provider positions the Redmond giant as a formidable threat to the public cloud status quo as Azure continues to evolve. With VMware, Microsoft and Google (GOOG) entering the cloud race, enterprises will have an even greater incentive to automate cloud migration capabilities, as enhanced automation will give them more options for optimizing the use of cloud, akin to how VMware increases the efficiency of server utilization.
As a cloud architect once told me, it isn't so much about the possible low cost of cloud computing or even tactical scalability [that would convince her to deploy most of her apps in the cloud], but rather the ability to migrate her apps from one cloud to another and back again. If a cloud is initially free and she is locked in by migration costs and risks, the service provider could change policies and her firm could be stuck. Indeed, agility to and between clouds may be the most powerful factors in determining who acquires customer revenue the fastest. The next decade in IT promises to perhaps be the most interesting and volatile.
Additional disclosure: I am VP Marketing for CloudVelocity, an automated cloud migration and disaster recovery software vendor.