Cloud concept

The future is cloud

Blogs
(Image: Stockfresh)

15 September 2017

Among the raft of announcements from the recent VMworld in Barcelona, was one nugget from the day two keynote from CEO Pat Gelsinger.

Gelsinger said that about 9% of their business currently comes from the as-a-service licence model, as opposed to the more common perpetual licence model.

That may sound rather unimpressive in the context of AWS and Azure, but Gelsinger said that this section of the business is growing at three times the rate of the perpetual licence business.

As the SaaS model is reflective of the move to cloud and services, this is a further manifestation of the mantra that was repeated across the event, that the new world of enterprise ICT is a hybrid cloud, multi-cloud world.

But by way of context, Microsoft’s recent results were very strong, due in no small part to its cloud performance. Fourth quarter earnings for the company came in at an expectation beating $24.7 billion, of which $7.4 billion was described as coming from “Intelligent Cloud” business. This is more than Azure, but let us take it as a rough comparator. That represents around 30% of earnings for the period.

Despite a run of poor quarters over all, IBM earlier this year reported in the quarter ending 31 August, revenues of $9.02 billion. One of the strongest parts of that was its cloud revenue which grew 51% in the period.

On its web site from April, after its first quarter results were released, IBM ranked its own cloud earnings for the previous 12 months against those of Microsoft and others.

IBM said it claimed the top spot with $14.6 billion, over Microsoft’s $14 billion and Amazons AWS at $12.2 billion. Google, oddly enough was only ranked fourth with $10 billion.

Now, it is notoriously hard to actually calculate what any of these companies is really making from what we might call cloud services and the figures quoted from IBM do have several caveats, but the point is as a broad guide of cloud compared to traditional business, the metrics are useful.

They show that even these behemoths are gradually turning the juggernaut to become truly digitally transformed—as in the digital market.

Interestingly, in its most recent earnings reports, Oracle revealed that along with very strong performance overall, was a very strong performance from its cloud business. However, it came as something of a surprise when it was announced that the pay of the top executives, the joint CEOs and CTO, would be linked to specific performance targets, mainly the growth of the cloud business. The specific goal is to achieve $20 billion in total cloud revenues in one fiscal year. For reference, total cloud revenues in 2017 were $4.57 billion.

This should leave no one in any doubt whatsoever, that the future is cloud and service-based. If any organisation thinks that cloud is not for them, then they must understand that their options from the top technology vendors, not just those listed above, will be less and less.

IBM still provides mainframe systems, but common sense would suggest that as less and less revenue comes from diminishing lines of business, development focus and support will lessen too, not just from Big Blue, but from all vendors.

With announcements such as VMware’s AppDefense security for the cloud, and general participation of cloud vendors in partnerships, open source projects and broad ecosystems supporting cloud, almost all of the old concerns around control, access and security are well and truly met. For all but the most narrow, specific of needs, cloud is the future.

 

 

Read More:


Back to Top ↑

TechCentral.ie