Private Cloud Activity Picks Up Steam

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    Five Critical Questions to Ask Before Moving Data to the Cloud

    It’s no surprise that the cloud is emerging as the dominant form of enterprise information technology as the decade unfolds, but exactly how this is playing out deserves a closer look.

    According to IDC, the total revenues for cloud infrastructure – servers, storage and networking – topped $8 billion in the fourth quarter of 2014, a 14.4 percent gain over the same period a year ago and roughly 30 percent of the total IT spend. The growth was most pronounced in the private cloud segment, which exceeded 18.3 percent to hit $2.9 billion, compared to the public cloud, which grew 12.3 percent to $5 billion. For the full year, total cloud spending grew 18.7 percent to $26.4 billion, while private cloud came in at 20.7 percent growth to $10 billion, and public cloud surged 17.5 percent to $16.4 billion.

    What does all this mean? After a slow start, private cloud momentum is clearly on the upswing even as the bulk of cloud infrastructure remains in the public sphere. Going forward, I would expect continued spending on private infrastructure and then rapid uptake of hybrid solutions as the enterprise industry seeks to integrate its external resources with scale-out public platforms.

    But this isn’t the only twist in the report, says ZDnet’s Larry Dignan. A closer look at the numbers reveals that where cloud dollars are being spent is just as important as how they are being spent. And increasingly, those dollars are flowing away from established IT platform vendors like Cisco and HP and more toward the original device manufacturers (ODMS) who can provide stripped-down, low-cost hardware in bulk that can then be used to support higher-level scale-out architectures. For the year, ODM providers saw 37.3 percent growth, giving them a 27.8 percent market share, far outstripping any of the big-name vendors.

    This might not be as ominous as it seems for the familiar brands, however. Most of the ODM activity takes place in the hyperscale sector as giants like Google and Facebook build out their infrastructure. If private cloud activity maintains its growth rate, however, more of the traditional enterprise spending will likely go to familiar vendors that have maintained longstanding relationships with key partners and channel providers. And since the typical enterprise is not looking to build out to hyperscale levels, an integrated, ready-made solution should be more appealing than a blank box that then must be configured by in-house staff to become fully functional.

    It is also questionable how truly effective current spending on cloud computing is, says ElasticHosts CEO Richard Davies. As he told CBR Online, few organizations are fully utilizing the cloud resources they already have, with many virtual compute resources sitting idle half the time. This may be about to change, however, as container technology makes it possible to base cloud costs on capacity that is actually used, rather than what is provisioned. The cloud industry has only just begun updating the Linux kernel to support containerization, so it will be interesting to see how this new pricing model impacts revenues in the years to come.

    Cloud Computing

    And yet another tidbit from IDC comes from its report on worldwide cloud adoption in the manufacturing industry. The popular image of cloud computing is that it caters to health care, finance and other knowledge- and service-based industries, but it turns out to be quite handy for companies that make actual things as well. The survey of nearly 600 manufacturers shows that the majority already has at least two applications running in the cloud and is implementing either a cloud-first or cloud-also strategy for the remainder of the decade. The most popular cloud apps include email, ERP and CRM, with the Asia/Pacific region leading the way, most likely due to its high concentration of manufacturing plants.

    Clearly, enterprises of all stripes have warmed up to the cloud and are quickly overcoming the security and availability fears that hampered its initial acceptance. There is still a tendency to think of the cloud as a convenient means of extending traditional data center infrastructure and applications, but this is proving to be of limited value in most circumstances.

    More than likely, the cloud will provide entirely new IT functionality, with purpose-built systems and architectures gradually taking over key data responsibilities and emerging challenges like Big Data, the Internet of Things and collaboration/social networking.

    The cloud is not the “new normal” yet, but it will be very quickly.

    Arthur Cole writes about infrastructure for IT Business Edge. Cole has been covering the high-tech media and computing industries for more than 20 years, having served as editor of TV Technology, Video Technology News, Internet News and Multimedia Weekly. His contributions have appeared in Communications Today and Enterprise Networking Planet and as web content for numerous high-tech clients like TwinStrata, Carpathia and NetMagic.

    Arthur Cole
    Arthur Cole
    With more than 20 years of experience in technology journalism, Arthur has written on the rise of everything from the first digital video editing platforms to virtualization, advanced cloud architectures and the Internet of Things. He is a regular contributor to IT Business Edge and Enterprise Networking Planet and provides blog posts and other web content to numerous company web sites in the high-tech and data communications industries.

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