ESG Blogs

On-premises integration is vital to hybrid cloud strategies. Many organizations have an on-premises-first mindset as they begin to formulate their hybrid cloud strategies. According to ESG research into hybrid cloud trends, when asked to identify the most important consideration in these decisions, more than half cited seamless compatibility with their on-premises infrastructure. Furthermore, nearly three-quarters of organizations stated that it was critical or very important that public cloud service providers offer solutions that integrate with their on-premises environments.

Oracle ultimately had to choose a cloud partner as customer demand for cloud consumption continues to rise. In fact, ESG captured a 10% year over year increase (29% to 39%) of companies that are taking a cloud first policy when it comes to new application deployments. These dynamics cranked up the pressure on the Oracle business as they seemed to try to hold on to legacy on-premises approaches with their customers. And why not….margins are excellent and it is a massive investment for Oracle to build out global data centers. Sure, Oracle has cloud offerings, but they appeared to be more like nice window dressing than what the likes of Microsoft Azure, AWS, and Google GCP are offering (and expanding) in the market.

First, let's clarify what would drive businesses to consider moving cloud on-prem:

As the ESG team gears up to attend Google NEXT, these are some of the hot spots we will be focused on:

• The first and most obvious will be to see what stakes Thomas Kurian is driving into the ground to help drive Google Cloud execution in the market and candidly to see how they intend to close the gap with AWS and Microsoft Azure.
• Google NEXT has historically scored an A on technology and a C on a clearly defined message and execution strategy into the enterprise. My observation is that attendees participate in Google NEXT because they see great things with the technology but have historically walked away without a clear path to simple things that are highly relevant to enterprise IT--e.g., virtual machine migration, basic cloud readiness assessment, and relevance of legacy IT that is anchored to on-prem infrastructure and process.

Welcome to 2019 and as is the tradition at ESG, I have made a video blog with my predictions for 2019. 2018 had a number of very significant announcements that impact all areas of cloud. My predictions video covers three main areas.

First, I talked about how 2019 will be the year we see the expansion of the cloud into hybrid cloud. Both Amazon Web Services and Google made significant product announcements in this area in 2018 and it puts pressure on the incumbent leader, Microsoft, to respond.

The Cloud Native Computing Foundation (CNCF) recently held their 2018 North America event in Seattle, Washington. This event was both KubeCon, for Kubernetes, but also CloudNativeCon, for all the other cloud native associated projects that the CNCF supports. The show has seen wild growth, going from 500 to 1000 to 4000 to over 8000 attendees in the four years of the show.

With the departure of Diane Greene as CEO of Google Cloud, a lot of people in the cloud industry are asking, "What is next for Google and how does Oracle veteran Thomas Kurian drive it?" First, let's talk about Google's place among the hyperscale public clouds. Contrary to some industry observers, ESG research has found that 81% of companies are using two or more public cloud providers and 51% are using three or more. Even more important, our research has found that 97% of companies expect that number to increase or stay the same in three years.

What this all means is that the public cloud market is not consolidating down to one or two major vendors and the opportunity is there for Google Cloud in the marketplace. That being said, as public cloud use increases, we will see the market shift from simply grabbing the greenfield of cloud users to one that is increasingly competitive. Google is certainly looking at the challenges of going up against AWS, with its VMware partnership, and Microsoft Azure and the associated services, as well as others such as IBM and Oracle.

Diane Greene did a great job getting Google Cloud to this point, and now Thomas Kurian has an opportunity to build quickly and firmly on this foundation. Google finds itself in an interesting place in the market as it faces the leadership position of Amazon and Microsoft, and pushes to accelerate traction in the enterprise. One of Diane's priorities at Google was to build a partner ecosystem as she did at VMware. Google has managed partnerships with the likes of SAP, but I believe Google was expecting more pull from strategic partners at this point.

With what has become the dominant IT event of the calendar, AWS re:Invent keeps customers and partners excited and competitors on their toes with new announcements. But what should we expect from AWS at the show this year? I have a new video blog, discussing what I think will be the two keys areas for AWS, Cloud Services and Hybrid. Please watch the video below for my thoughts and predictions for AWS re:Invent 2018.

IBM’s acquisition of Red Hat has been termed a “game changer” by many, but what is the real impact of this deal? Where will the acquisition have a significant impact and where will the combination be less effective? I've written up a new brief for our ESG subscribers about the IBM/Red Hat deal.

In summary, while the deal is significant in scope, the near-term impacts will be limited by the lack of existing synergies in the combined product portfolio. This acquisition helps IBM’s position in the hybrid cloud market significantly but doesn’t enable it to leapfrog competitors like Microsoft, AWS, or Google. The biggest opportunity for IBM is in the container and Kubernetes space, especially if on-premises and bare metal containers become popular. The new IBM would be very well positioned for that type of cloud.