I’m at EMC’s analyst event in Boston this week and it’s an interesting event. One of the compelling stats that they shared: approximately 18% of large companies are choosing to build their own public cloud because they feel they can do it better and cheaper than services like Amazon Web Services can. EMC is moving […]
I’m at EMC’s analyst event in Boston this week and it’s an interesting event. One of the compelling stats that they shared: approximately 18% of large companies are choosing to build their own public cloud because they feel they can do it better and cheaper than services like Amazon Web Services can. EMC is moving on this opportunity with a solution called “Project Nile” and I think the trend is very interesting. Let me explain.
Unless you’ve been living under a rock in the IT space you likely know this: private cloud efforts have advantages that include compliance, security, and IT oversight. Disadvantages include cost, inflexibility, and bureaucratic red tape. These services are supplied and managed by IT, using technology generally purchased through third parties.
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Public cloud efforts have advantages that include cost, ease of deployment, and a lack of required red tape. Disadvantages include a lack of security or compliance, uneven reliability, and lack of integration with systems on premise.
The idea of a private public cloud is basically a hybrid to get the best of both approaches. Because the solution is created by IT, it is compliant and secure (it is also on premise). It is easy to use and set up using tools similar to what services like AWS uses. Generally only available to large companies, this kind of a service provides an internal competitor to AWS. It assures that IT isn’t gradually replaced by an AWS-like service and that the unique needs of the corporation are met.
This trend recurs every decade or so. The last big move was when PCs flooded companies, and line organizations figured out they could deploy financial, HR, and sales management systems far more quickly and easily on PCs than on mainframe and midrange computers.
At Dataquest we did a study in the early 90’s that clearly showcased that the vast majority of these efforts turned out to eventually be more problems than they were worth. IT gradually took over and the applications were pulled off the desktop and put on servers.
It turned out that even the cost savings were often a myth. Overwhelming the perceived savings: data loss (often due to equipment theft or hard drive failures), the unreliability of those early PC and workstation systems, and costs connected with employee churn.
We see the same thing now with cloud services. Line is flocking to them but they aren’t really up to utility standards, government organizations like the NSA appear to be mining them, and they don’t appear to have adequate protection against outages. For instance, a power outage at Amazon took down a large number of firms. Yet the trend to use services like this appears to be accelerating. Like before, I expect we’ll find that many firms won’t get the benefits they anticipated and may get a number of problems they didn’t anticipate.
We talk about all of this as if it is a technology problem and it isn’t really. It is a customer care problem and when these cycles occur it is largely because IT’s customers have become frustrated with IT.
And much like the initial move to PCs, the move to the public cloud is an effort by line employees to fire IT because they are dissatisfied customers. Solutions like EMC’s Project Nile can certainly help, but if IT doesn’t understand that the problem is their lack of focus on their line customers no technology will be good enough.
At the core of the effort has to be a process to understand why these customers are unhappy and to make sure that problem is corrected during the process. Only then can a tool like Project Nile help assure that Line employees don’t vote IT off the corporate island.
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As President and Principal Analyst of the Enderle Group, Rob provides regional and global companies with guidance in how to create credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors and products, and practice zero dollar marketing. For over 20 years Rob has worked for and with companies like Microsoft, HP, IBM, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM, and Siemens.
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