Archive for the ‘Cloudonomics’ Category

According to 451 Research, the cloud computing market may become an oligopoly of high-volume vendors



16 July 2013 – Oligopoly: A market in which there are a limited number of providers providing the same service. Its political counterpart, oligarchy, means rule by a few. 

So starts an article by Joe McKendrick which was published in Forbes magazine last week, leading off his review of a research note by Owen Rogers, senior analyst at 451 Research, who suggests the emergence of an IT oligopoly. It’s a brilliant research note and provides a great “cloudonomics” tutorial.

Is the cloud computing marketplace becoming the domain of a few big vendors? With large players including Amazon, Microsoft, Google and IBM coming online with similar types of services, we may be starting to see a consolidation of the primary cloud computing market into the hands of a few powerful vendors.

Actually, Owen’s report goes further to say what is emerging is both an oligopoly and monopoly at the same time. With identical services comes commoditization, and only big vendors that can deliver huge economies of scale with margins will survive in this space. He adds that perhaps the “oligopoly … Read more

Cloudonomics: The Economics of Cloud Computing

1 November 2012 –  We receive scores of white papers on the cloud.  It is hard to plow through them all.  But here is one from Rackspace, from its CloudU™ which is a comprehensive Cloud Computing training and education curriculum developed by industry analyst Ben Kepes. We have been fortune enough to go through some of the units.

In this PDF Rackspace addresses the many reasons for organizations to move from traditional IT infrastructure to Cloud Computing. One of the most cited benefits is the economics of the Cloud. Yet while many people point out the cost savings that Cloud Computing brings to an organization, Rackspace believes attention should be drawn to four distinct mechanisms through which these cost savings are generated:
•By lowering the opportunity cost of running technology
•By allowing for a shift from capital expenditure to operating expenditure
•By lowering the total cost of ownership (TCO) of technology
•By giving organizations the ability to add business value by renewed focus on core activities

They detail these four mechanisms and introduce several case studies and examples to show

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The Rise of Cloud Computing Ecosystems

20 January 2012 – It would be fair to say that in the last year the dominant form of cloud computing has been infrastructure-as-a-service (IaaS). As popular as those services have proven to be, the odds are good that IaaS is not going to be the dominant form of cloud computing going forward. The reason for this is that IaaS still leaves much of the responsibility for managing the software environment in the cloud in the hands of local IT people. That’s appealing to a subset of customers, but in reality most cloud computing customers are looking for a more turnkey experience.

Obviously, platform-as-a-service (PaaS) offerings go a long way towards delivering that experience. But PaaS has been slow to catch on because most of the offerings to date have been tied to specific application development languages and associated middleware platforms. In effect, vendors have treated PaaS as an opportunity to extend long-standing platform wars into the cloud. Customers, however, have grown weary of being caught up in such conflicts.

For more from Michael Vizard click here.… Read more

Survey: Cloud isn’t a cost panacea, but few expect it to be

5 December 2011 — Cloud computing is not the money saver it’s sometimes made out to be. But don’t fret — it’s still a very valuable delivery model for IT resources, according to a new survey by systems integrator Computer Science Corporation.

While cost savings, where present, were small among the survey’s 3,645 respondents — under $20,000 in 35 percent of cases — the cloud brings a wealth of benefits around mobility, efficiency and, believe it or not, jobs. Mobility, the ability to access applications and data from a variety of end-user devices, was actually the No.1 reason respondents gave for adopting cloud computing. The survey results aren’t entirely surprising when one considers ideal cloud use cases, especially with regard to infrastructure-as-a-service clouds.

For IaaS, the delivery model is arguably best-suited for handling dynamic or unknown workloads because organizations don’t have to overprovision resources before launching their applications. It’s also very helpful for testing and development, ad hoc applications, and other workloads where companies don’t want to buy and manage physical servers and storage. Cloud computing very likely will cost … Read more

SaaS valuations: off the charts and staying that way


25 November 2011 – Legacy software companies get no respect — or market valuation — compared to Software-as-a-Service (SaaS) players. New research shows that over the past year, SaaS company valuations grew twice as much as valuations of legacy software companies rooted in the client-server world. And that SaaS valuation trend will continue for the next 12 to 24 months, according to new research from Martin Wolf M&A Advisors.

For an old-line company it makes sense to freshen up with a SaaS purchase, even paying top dollar in anticipation that the target’s value will rise as more companies get comfortable offloading tasks from on-premises to a service model. At the same time, existing SaaS players want to broaden their services portfolio with more vertical SaaS options, said Martin Wolf, president and founder of the company.

For more click here.… Read more

Software Pricing Starts to Catch Up to Cloud Computing

7 November 2011 — One of the more confounding aspects of cloud computing is that software pricing is frequently out of sync with the way hardware is acquired. IT organizations can easily pay for hardware on an hourly, monthly or yearly basis. Software pricing, on the other hand, has generally remained tied to the number of processors being used on a yearly basis.

OpSource, a unit of the IT services firm Dimension Data, is taking that issue on starting today with the release of OpSource Cloud Software, an offering that allows customers to consume Microsoft SQL Server, Microsoft SharePoint and eventually other database and middleware platforms on a pay-for-use basis that can be priced hourly or monthly.

According to Keao Caindec, chief marketing officer for OpSource, this shift to giving customers a usage software-pricing model for software consumed in the cloud is long overdue. As a unit of Dimension Data, OpSource is leveraging special pricing and payment options that Microsoft provides business partners to resell its software as a service.

Over time, OpSource expects to make available usage-based software … Read more

The Big Business of “Big Data”

We are going to collect more information about ourselves and the world than we knew existed. Expect a bust, along with a benefit.

24 October 2011 — Is Big Data a Bubble? In case you’re in a hurry: Of course it is. And that is good.  Longer version: Last week there were several events that convinced me that one of the great tech bubbles inflating right now is around what people have agreed to call “Big Data.” Basically the term reflects the fact that its now so easy to digitize and put on the Internet all kinds of information — things as diverse as the measurements of passive sendors,  most or all the world’s books,  200 million tweets a day and most of the world’s significant financial transactions — that the data is growing enormously.

Big Data is really about, however, the benefits we will gain by cleverly sifting through it to find and exploit new patterns and relationships. You see it now in things like Facebook ads, which are put in front of you because the posts you have … Read more

IDC Says Cloud Adoption Fuels Storage Sales

20 October 2011 – As businesses and consumers literally take to the clouds — both public and private — in coming years, storage vendors will continue to find a vital growing market for their goods, according to a new report.

In June, analyst firm IDC said it sees users’ data doubling every two years.

Now, in a new report, IDC projects strong sales of storage products through 2015 as movement to cloud environments triggers swelling demand for someplace for all that data to go.

Indeed, IDC foresees that by 2015, global sales of storage for both public and private clouds will hit $22.6 billion annually.

“Despite current economic uncertainties, IDC expects cloud service providers — both public and private — to be among the most expansive spenders on IT products and services as they continue to build out their facilities worldwide and expand their service options,” Richard Villars, vice president of storage systems and executive strategies at IDC, said in a statement.

In fact, public cloud service providers’ spending on storage hardware, software, and professional services is likely to swell … Read more

Clouds Vs. Outsourcing: The Next Battleground

20 October 2011 – IBM, HP, and other established vendors entering cloud computing are often already outsourcing partners to the firms that are now frequently looking for an infrastructure service provider. But that doesn’t mean they have an inside track on the business. They do not. Established vendors are going to face stiff competition for outsourcing business from the new infrastructure  providers: Amazon, Rackspace, and others, according to a report by PricewaterhouseCoopers.

“Service providers in the IT outsourcing space have, after all, profited handsomely by taking on their customers’ highly complex, one-off collections of IT assets and finding ways to manage them more efficiently than their customers are able to,” states the Pricewaterhouse report.

“But the essence of cloud computing is a move towards highly standardized racks of commodity servers,” with software that manages the racks and allows customers to run applications on them through self-service. “Where’s the IT outsourcing opportunity in that?” said the report, sponsored by Mike Pearl, partner and cloud computing leader at PriceWaterhouse.

For the full post click here.… Read more

Paying for only what you need: treating cloud computing like a utility

3 October 2011 – Instead of buying their own computer systems, companies, individuals, and even governments can share time on a common computing infrastructure, which consists of interchangeable parts providing computation, data storage, and communications. If one piece malfunctions or needs updating, programs and data automatically move to others. Multilevel security prevents users from interfering with one another. This vast system is cheaper to operate than many individual computers scattered among different businesses and agencies, because both the hardware and the administrative staff can be utilized much more efficiently.

Advanced “virtualization” systems can generate just the computing resources needed at any time, letting them be returned to a general pool when they are not. This means that service providers such as Amazon can offer a pay-as-you-go utility billing model to customers on a very large scale. The consequences of this shift are far reaching: one of the clearest is that today there’s very little need for businesses to purchase a computer system other than PCs and laptops for employees.

For more click here.… Read more