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Adoption by large enterprise is a reinforcing
message to SME users. What it means to
you, even if you’re not a $3.5B player.
Posts this week by ZDnet
and Computerworld
profiled Netflix’s new announcement and the big bet that the video-on-demand
provider is making. Netflix is moving
95% of its corporate IT operations to Amazon Web Services and plans to
ultimately make a 100% transition.
The stated goal of Netflix’s new VP of IT operations is to
have a higher level of focus for his IT staff, and not to be managing
hardware. This is significant because
they are a $3.5B operation, and now fully dependent on hosted
infrastructure. It’s a big pocketbook
vote of confidence for public cloud Infrastructure as a Service (IaaS).
So
what does this mean for the rest of us?
Well, it moves the needle on the bulk of current wisdom
about what business types IaaS is best suited for. Until now, adoption has been
weighted toward e-commerce and virtual data center (VDC) usage for
small-to-medium enterprise (SME). Easy,
rapid deployment and low capital outlay can be a big advantage for a growing
business with minimal prior IT investment.
Most prior analysis, including IDC in its first Magic Quadrant for IaaS, has
concluded there is no clear cost advantage for enterprise businesses that have
already deployed infrastructure internally.
The cost of data movement in and out of the cloud is largely unpredictable,
and a good number of other variables that are unique to every situation, like
power, facilities costs, maintenance, upgrades and related staff as just a few,
are hard to nail down.
Lets hope for Netflix to publish their own cost analysis on
private/public hosting in the same way that they have made public their Open Connect Content Delivery
Network.
Also, enterprise IT planners are more apt to notice,
correctly, that component prices have dropped far faster than the cost of
operating on AWS, and they expect that much more competitive pricing should be
offered. Maybe true. But still, it is hard to put a price on speed
and, back to those associated hidden costs, much of that is also the included
benefit of a hosted service.
Now, more analysts are calling out 2012 as the start of
meaningful enterprise cloud adoption.
Two
points in bringing this up; 1.
accessibility and 2. new growth.
On the accessibility front, market forces move faster with
enterprise purchase power in the mix, resulting in a quicker drive to commoditization. This brings a big benefit back to SME. More
affordable pricing means faster deployment of ecommerce capability and remote
offices, wider supply chain access and greater participation in the fast, flat
global economy.
And this is why moves like the one by Netflix help to drive
new growth. SME’s, with faster access to
wider markets, are able to operate alongside larger competitors well before
hitting the revenue of a $B+ enterprise.
New well-funded entrants like Nirvanix, with solutions to
support hybrid cloud and migration from private to public environments, and
Joyent, that focuses on transaction speed and scalability (to name only a
couple in the interest of space here) are adding to the available options.
In our travels at DCV we are seeing hosting service
providers spring up with a number of innovations. Some offer lower and more predictable cost
structures, like no charge for in/out data transfer, and many are providing
personal relationship and support confidence that goes beyond contractual
service level agreements. The trusted advisor value that comes from knowing a
customer’s current challenges and future business goals means a lot when it gets
into navigating this new and rapidly evolving space.
If you are a potential user of IaaS, do this: Shop for price
and solution value among service providers.
Some of the best options may be from ones close by. If you are a systems
integrator or solution provider with a devoted customer base and aspirations to
be hosting provider, look at some of the great converged infrastructure modular
cloud blocks now available, and don’t underestimate the value of your ability
to serve your customer base at a much more personal level.
Until next time, we'll see you in the cloud
