Sourcing Advisors

2011 Through The Eyes of A Sourcing Advisors

Cloud Computing Won’t Whisk Us Away to Oz

In all my years of global technology, I’ve never seen anything with such marketing hype, vapor, and semantic nonsense as “the cloud.” I find it very simple to define and work with public or private shared hosting, but the industry at large seems to have an insatiable need to stamp “cloud” on everything from hardware to web based email services. The marketing noise does not translate into dollars however. The amount of total industry revenue for what I define as “cloud”, which consists solely of public access shared hosting with self managed provisioning and automated scaling, was somewhere around $750M in 2011. This is a good number, but as global technology markets go, not that impressive.

It is lower than the total sales of a single company like Akamai or Equinix. The “analysts” predict a future market size as high as hundreds of billions of dollars. Are these the same ones that predicted this for the dot.coms in 1999? I remember you analysts! And although I use a public cloud platform every day, and I do find it compelling, I don’t see public cloud infrastructure, as is, becoming the type of global market devouring force that the analysts love to write about. Why? Because public access services will have a hard time keeping up in terms of performance, service levels, and customer service with dedicated private hardware, especially in a complex network environment. Shared computing has been around for decades- if it was going to be the mainstream leader, it would have been so back when SSH was still considered novel. I do feel that public cloud computing will grow as a market- just not eat the entire market. Colocation and managed hosting will be around for a long time to come.

Lesson learned? Don’t believe the hype. Again.

The Myth of the RFP

The Myth of the RFP for Everything at Half Price

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