The Conflicted Cloud

Is it just me or is it the season for all large vendors to start praising the cloud? From Verizon’s Uppernet commercials to John Chambers at Cisco Live, it is a mandatory sound bite for every industry marketing event.

Every time I hear a legacy (ok, established) vendor talk cloud, I am reminded of a one-on-one with this executive who had just finished his keynote where he described his company’s cloud vision.  Brutally honest, and unprompted, he told me (I am paraphrasing to protect identities)

“Only you industry analysts care about the cloud. Only a minute number of tech executives have shown they can migrate their business model to the cloud. So financial analysts certainly are not cheering us to get there”

This interview with EMC President Pat Gelsinger while much more guarded in language says the same thing. He defends the status quo with the typical insurance argument:

Well, they need high performance. They need a five nines SLA. They're responsible for governance. They need to sign off on legal requirements. There's a SOX requirement or other financial requirements associated with failover, failback. There's a numerous set of reasons, a high availability requirement. As they go international, they often just don't have the network bandwidth to get to and from [cloud storage].

But is that insurance worth 5, 10, 20X the cloud alternative? Wish they had asked him that.

I have two litmus questions for legacy vendors when they talk cloud:

a) What has been your cloud capex in the last 3 years? So, Verizon strip out your FiOS fibre, your cell tower, back haul investments.  So, IBM strip out your staff training costs and old data center refurbishments. Tell us about your cloud data centers.

b) What has been your revenue share of direct to end-customer cloud sales in the last 3 years? So, Dell strip out server sales to Facebook or other cloud providers.  So, SAP strip out hosted and “old data centers masquerading as private cloud” installations.

The real answers in both cases are pretty low. Even more disappointing is that their executives have little interest in increasing their ratio. Only industry analysts care about the cloud :)