ESG Blogs

HPE’s Discover 2020 virtual event continued this week, with a day focused on storage. On the whole, HPE’s virtual Discover experience has been impressive, entertaining, and well managed. Check it out, the content is still available.

With typical understatement, no assertive flourishes, and a complete lack of competitive gauntlet-throwing, Oracle’s Larry Ellison just announced – separate but linked – enhancements to its overall cloud strategy. Well, actually no - of course not!! While the announcements were strategic, real, and compelling, there were flashes-aplenty of the Larry we have come to expect (even from a shelter-in-place, and rather-nice-looking, kitchen)…a feisty and assured red stake placed firmly in the increasingly hybrid IT landscape.  

IT organizations that are running a data center have a set of challenges on their hands given that the teams are working from home (WFH). Data centers are like your automobile that requires hands-on scheduled and unplanned maintenance. Well-run data centers are a fine oiled piece of machinery that is constantly worked on to meet and deliver business demand. IT organizations are masters at this, but what happens when the team is mandated to WFH?

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.