Data Gravity Starts to Pull the Cloud Channel
It's been well over 10 years since cloud computing first emerged, and, in that time, the cloud has clearly had a major impact on all things IT. But the true weight of that impact may just beginning to make its presence felt.
As more data pours into various clouds, the providers of those cloud computing services get to take advantage of more IT infrastructure scale. Plus, all the data stored in those clouds starts to attract more applications.
The reason for this is that the developers of those applications generally have a marked preference for hosting their applications in locations where a lot of data already exists. That approach provides access to a pre-existing pool of data and also minimizes the need to move data from one IT environment to another.
This data gravity phenomenon has been more of an effect rather than a cause for migrating to the cloud. But that's starting to change as cloud computing environments achieve new levels of scale.
The Amazon Web Services (AWS) cloud generates $10 billion in annual sales. More significantly, there are now more than 2,300 applications listed in the AWS online store. As adoption of those applications increases, so too does the amount of data stored in the AWS cloud.
Countering the AWS Threat
In fact, most of the primary cloud rivals that AWS faces are counting on their access to large pools of data to counter the competitive threat AWS poses. They include the following vendors:
Microsoft has invested massive amounts of money in an Azure cloud service, but it's real ace in the whole is all the data that Microsoft Office 365 applications generate. That data provides the scale Microsoft needs to be able to compete on pricing. Microsoft hopes that pool of data will attract enough third-party developer support to surpass AWS.
Google's approach to the cloud has been a little more quixotic. Massive investments in big data technologies to drive Google Search make it competitive. But its efforts to recruit developers are just now becoming a major focus.
Salesforce outside of AWS has enjoyed the most success creating a cloud ecosystem around the data it collects in its widely used customer relationship management (CRM) application.
IBM is trying to leverage the Watson cognitive computing platform to aggregate large amounts of data around vertical industry segments.
Oracle is hoping that its suite of applications, along with the recent move to acquire NetSuite, will—with its database software—create enough critical mass to be competitive in the cloud.
SAP is making major investments in software-as-a-service (SaaS) applications that will all share access to a common HANA in-memory database hosted in the cloud.
All of these vendors aim to exploit the data they collect to transform the balance of power within the IT industry. But it's not just traditional, well-known cloud service providers that are pursuing this strategy. At a recent GE Minds + Machines 2016 event, GE revealed that it now has more than 100 registered partners building solutions around GE Predix, its big data analytics platform that can be hosted on multiple cloud computing platforms.
"We now have over 20,000 active developers," says Nick Simha, global head of the independent software vendor (ISV) program at GE Digital. "Given the number of customers GE has, the size of our marketplace is humongous."
Creating Opportunities for Solution Providers
As cloud computing continues to evolve, it's apparent that just about every entity that has achieved a critical mass of customers within a vertical industry is going to start thinking about creating a cloud ecosystem on their own, and that invariably will create additional opportunities for solution providers.
In many cases, says CP Gurnani, managing director and CEO of Tech Mahindra, the global systems integrators will become a co-owner of the platform as more organizations look to outsource entire business functions. Couple that trend with all the data moving into public clouds such as AWS and Microsoft Azure, and Gurnani says the relationship between solutions providers and the end customers is starting to fundamentally change.
In the meantime, large pools of data located both on premise and in the cloud will continue to be the new normal for years to come. It will take years—if ever—for public clouds to depopulate on-premise IT environments of all their data. That means solution providers should be able to count on IT organizations needing their help to integrate data between on-premise IT environments and cloud environments for a very long time.
"It's going to be all about data security and integration," Gurnani predicts.
In most cases, adds Rodolpho Cardenuto, president of global channels for SAP, solution providers will find themselves extending existing on-premise IT solutions by helping to deploy complementary SaaS applications. "There will be a lot of opportunity around satellite solutions," he says. "Then there will be data migration."
Donald Dickinson, president of Dickinson & Associates, a solution provider specializing in application software, says the strategy in the cloud is not all that different from what it is on premise. "We're always trying to find that one application to get started with," he says. "After that, other opportunities will follow. We call that the wedge play."
As more data moves into the cloud, that wedge play will create even more opportunities for data integration.
"That's the new VAR opportunity," says Jeff Kaplan, managing director for THINKstrategies, an IT consulting firm that specializes in cloud computing. "The need for more data integration intensifies as more data moves into the cloud."
The biggest challenge now is simply waiting for IT organizations to achieve that critical mass of data in the cloud.
"Most IT organizations today are focused on getting their own houses in order," says Josh Greenbaum, principal with Enterprise Applications Consulting. "They're still trying to figure out what they've got."
He adds that IT organizations are challenged when it comes to multi-cloud computing scenarios because there's still a paucity of data integration tools capable of addressing hybrid cloud computing requirements.
All those issues will ultimately get addressed. And it's only a matter of time before the weight of all the data that's moving into the cloud finally makes its inexorable presence felt across the channel.