Last week I was strolling about Silicon Valley visiting several very interesting companies (I’ll surely write about them in the next days).
The most interesting aspect of my journey was the chance to meet many people, among them some personalities in Silicon Valley, and to exchange ideas about their job, vision and point of view about cloud and IT generally speaking.
I had the chance to meet Lane Bees (zScaler COO), he jotted down on a whiteboard the graph you can see below.
This plot depicts the rate of adoption of cloud computing, versus the size of the company.
Taking a look at the graph a little bit below (drawn using data from a Gartner analysis, shown in a meeting with i365), you easily draw the same conclusion I often sum up here in Italy: cloud adoption is strong in SMB/SME and in big enterprises, while it stays very low in middle sized companies.
Let’s try to understand why.
Small companies leverage the most from cloud computing, and you can easily find the most convinced supporters among them.
Taking again a look at the Gartner chart you can easily guess why cloud adoption (mostly public cloud) seems to be so appealing here in Italy: 99% of the enterprises are SMB.
There’s often shortage of IT infrastructures in SMBs, IT budgets are scant, if there are at all, and human resources are usually lacking too (why not, even recruited from different fields). IT is often perceived just as
a cost, not as a valuable resource! The net result is evident: low it adoption and overall inefficiencies that may heavily affect productivity and competitiveness.
Cloud computing eases the relationship among these companies and their own IT, allowing them to use complex and sophisticated tools, at the same time avoiding the troubles to acquire and manage a complicated
Any kind of application can be accessed to at a very low price, priced according the metering of the real usage (pay per use).
Some time you can even dismantle the infrastructure (this is something we, in Cinetica, did a couple of years ago) and set yourself free from an expense hard to be met.
Cloud computing can be leveraged in a totally different way. When talking about cloud in big enterprises, numbers are big too, and solutions are more often of hybrid kind (public and private). IT managers think cloud is an opportunity to do more with less, to better cope with demands coming from the company itself (management) and from the world outside (market) without needing to acquire hardly sustainable resources. Cloud has already become a solid way to deal with variable workloads and to delegate services regarded as trifle, or just what is usually referred as “utilities” (mailboxes, network security), a viable alternative to outsourcing.
IT facilities in big companies are slowly evolving, present day infrastructures are being updated to resemble more and more closely to a private cloud able to interact with public clouds to exchange with data and services in a more and more transparent way!
Neither fish nor flesh
Companies sitting in this kind of limbo, neither SMB, nor quite large enough, seem not too interested in adopting cloud technologies. I have no sure data, I just suppose this is due to the very same reasons why cloud is a successful model for SMB and large companies.
This kind of companies have a real IT budget including human and material resources. They also have mid-term capital equipment investments that must be taken into account. I can imagine these companies offer some resistance to changes, even a sort of dislike (for technical and human reasons) for outsourcing some services. Some examples come to my mind, companies who adopted vertical enterprise management softwares developed by small software houses (why not on AS/400-iSeries) customized beyond any limit (why not integrating their sofware with web, mail, etc…). Here in Italy there’s plenty of this kind of companies.
Freedom of action
In the next years the central sagging part of the graph will become thinner and thinner, no assurance can be made about timings, but a couple of considerations can be well thought. From the suppliers point of view, cloud computing is a very important challenge since the gap between SMB and large enterprises is too wide to allow for offerings suitable for both, while ignoring midrange companies.
From the point of view of VAR, simple resellers, system integrators and the like, their market shares are more and more shrinking, but, since they contributed to building their customers’s IT infrastructures, then they can jump on the cloud wagon simply becoming VAR, reseller or s.i. of cloud services (why not devise and market their own), since are already trusted by their customers.
WOW! I meant to write down just a couple of thoughts, but ended up writing a novel.
My goal was to start a debate and understand if my point of view could be shared or not. On the other hand it seems to me that cloud computing is radically turning IT inside out.
Some doors are closing, in the meanwhile some even more interesting and exciting ones are opening!!!
Comments are welcome.