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Wednesday 27 March 2013

IT Vendors struggle with increasing competition from Cloud services vendors


Looses by clouds
Have you seen recent trends in big-proprietary enterprise vendor solution which loses their revenue in the last 2 years? Oracle, IBM, Microsoft, VM Ware, etc these big mother-vendor are in cross-section to make big turn to survive and compete in the jungle of enterprises. 

Many enterprises has been moved their IT services or infrastructure from single-vendor solution to heterogeneous vendor solution. The reason is simple, they get more less-complex solution at cheaper cost, and less headache to control and manage the operation. In the easy words, they now at least have someone to blame if they get problem.

Open source based technology are in big shot over second decade of 22th century. recently, eBay began to moves their 10,000 physical server node into Amazon cloud service which based on open source cloud solution, OpenStack. This move may also affect their Paypal business to host over 65,000 physical server nodes into cloud. Learning from the big loss, Now VM Ware make a turn by adding hybrid cloud solution to their portfolio. It will give the advantage over cloud performance, and in-house hosted data privacy and security. 

The same thing happened to Oracle as it loses from it's competitor who offer cloud database service, Datastax. their oracle licensing which gives big portion in database revenue was dropped significantly. They are blaming their sales force, but it was not the sales that failed. in fact, Oracle is still the best database in the world, but there are better solution that less-expensive and more flexible than hosting in-house Oracle database with its infrastructure complexity, expensive licensing and increasing support cost. 

again, Cloud play vital role by eliminating the complex management of IT and open source reduces the cost of licensing into cost of service. Microsoft senses it and began to offer Microsoft Office as a service rather than buying license. This trends has advantage such as more focused business model. If your business is software service, then you don't need to spent extra-cost to hire professional network people, you just subscribe for network infrastructure service, such as PaaS (Platform as a Service).

If your business is car making, you can subscribe for software services to boost productivity rather than boggled by maintaining software license, updates, and hiring professional just to make your software run. you just paid for what you get.

although Cloud offers such great advantages at lower cost, there are still drawbacks. It is depends on how you want to model your business and the security of your private enterprise data. because the biggest enemy of Cloud solutions is data privacy. 

sometimes the best is not good enough, when there are still better options. do not get too excited to follow the trend if your existing solution still run smoothly and you have more privacy and security concern, but Cloud technology is growing rapidly and who knows if someday it will be as good as your own private machine.

References:
Oracle big miss
Oracle is bleeding from database rivals
VM Ware 80k physical server node loses