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IBM Think Digital 2020: Making the case for better together

IBM places hybrid cloud at the center of its digital transformation strategy from both a product and a services perspective

At both the IBM and Red Hat sessions, there was no shortage of content that placed hybrid cloud at the center of digital transformation. Through various keynotes and sessions, IBM’s architectural approach, which places Red Hat as the foundational layer for future innovations, came to the forefront. A key example is the IBM Cloud Paks, which are to IBM Services what Red Hat products are to open-source projects. Cloud Paks provide functionality as a service, making it easy for customers to deploy the middleware functionalities that support solutions and applications. The combination of the advantages of cloud computing with IBM’s trusted ability to manage, update and certify solutions for regulatory compliance enable significant improvements in ability and flexibility. It is an emulation of the Red Hat playbook, albeit with far-reaching implications to the Global Technology Services business.

At the event IBM unveiled the IBM Cloud Pak for Data 3.0, which leverages OpenShift 4.3 to deliver new analytics and data management services. Further, IBM’s Partner Packages is a new incentive program for partners that successfully sell the solutions, underscoring IBM’s desire to facilitate customers’ cloud migrations by combining the expertise of services partners with the flexibility of the Cloud Paks.

However, the hybrid cloud model is anything but confined, and Whitehurst noted that edge devices must essentially operate as little clouds and require the same orchestration and interoperability standards. Edge implications address both the telco and enterprise spaces. Network virtualizations seemingly merge IT and cellular technology (CT) through virtualizing those functions to run on the same common platforms supported by OpenShift. Vodafone Business made the case that it leap-frogged competition in India by building a modern architecture that enabled the company to run IT and CT from the same cloud, delivering better consumer service for voice and extending IBM into the adjacent market of hosting enterprise workloads from the same instance.

IBM Think Digital 2020 made the case that IBM and Red Hat are better together — better together in mixed infrastructure, better together in cloud and AI, and better together in IBM’s and Red Hat’s ways of working. Lastly, IBM and Red Hat are better together with Arvind Krishna as IBM’s CEO and Jim Whitehurst as IBM’s president, as the former can assure customers of the IBM offering road map built on Red Hat’s engine while the latter can instill the operational best practices for managing people, processes and financial metrics for a technology world built increasingly on open platforms and recurring revenue subscription models.

Trailing vendors collaborate to better compete against market leaders, which are expanding globally

Public Cloud Market Summary

Amazon Web Services (AWS) and Microsoft remain leaders in public cloud, but their cloud strategies are extending well beyond the segment as they also enable hybrid environments with internal hybrid cloud offerings such as Azure and Azure Stack that entice enterprises with latency-sensitive or regulated workloads to leverage cloud environments. Microsoft is improving its competitive position against AWS through partnerships, notably its direct data center connections with Oracle. Although only a limited number of regions support these direct connections currently, the Microsoft-Oracle partnership is expanding with new direct connections in Canada. However, AWS holds significant IaaS market share and remains the leading IaaS provider as of 4Q19.

While both vendors still offer IaaS, IBM and Google have taken unique approaches to winning enterprise customers through vendor-agnostic and Kubernetes-based PaaS. IBM holds a greater share of this market as it attained a strong IBM Cloud Private customer base prior to the launch of Anthos, and IBM’s acquisition of Red Hat grew IBM’s position in the space. TBR expects that both IBM and Google will be successful with this vendor-agnostic strategy as many enterprises look to leverage Kubernetes-based PaaS for their hybrid environments, evidenced by IBM’s customer base of more than 2,000 clients using Red Hat and IBM container solutions — such as IBM Cloud Paks — as of 4Q19.

Public cloud remains the largest and fastest growing segment of the cloud market. Changes in customer acceptance, data integrations and innovation have combined to sustain the rapid growth of public cloud adoption. TBR’s Public Cloud Benchmark details how hybrid deployments, new use cases for enterprise apps, and trends in emerging technology will make public cloud even more relevant in the future.

Humio highlighted as standout hybrid enabler

“Catie Merrill, a Research Analyst at Technology Business Research, includes Humio in her new special report. The report, Amid rise of Kubernetes as standard in cloud-native deployment, vendors vie to be leading hybrid enablers describes how Humio stands out among startups that seek differentiation with niche, data-friendly tools.” — Humio

Amid rise of Kubernetes as standard in cloud-native deployment, vendors vie to be leading hybrid enablers

Startups seek differentiation in an escalating market with niche, data-friendly tools

While many industry incumbents are taking the fast-paced Kubernetes market by storm, TBR argues the overall market is still in its infancy, leaving ample room for vendors to position their offerings as unique to developer customers. In a room filled with ambitious startups, Humio emerged as a standout due to its enterprise-grade partnership with IBM and impressive scale for a short-lived solution.

Humio streamlines visibility for on-premises and cloud-native environments, easing pressure on developers

Founded in 2016, Humio offers an index-free logging platform for on-premises and cloud environments that processes large data volumes in real time, providing users with greater visibility into both structured and unstructured data. While many competing vendors market public clouds as the home to their streaming technologies, Humio views its on-premises tool as a differentiator given that data challenges, particularly ingestion and investigation, impact legacy customers. TBR believes one of Humio’s distinguishing features is its unlimited pricing plan, which was launched over one year ago. Contrary to a “pay as you scale” model, Humio’s unlimited option flattens the cost curve when customers incur higher data volumes, helping users save on data ingestion and retention costs. While still in its early stages, Humio’s offering, as well as those from other vendors that follow the same pricing model, may end up disrupting the market.

Looking to technology and reseller partners for early entry

An indirect sales strategy is critical for startups, and Humio looks to both technology and reseller partners for success; ahead of the event, Humio entered into an integration and reseller partnership agreement with IBM. IBM now supports Humio’s logging tool on its recently launched Cloud Pak for Multicloud Management — in this instance, Humio’s tool runs as a SaaS offering in the IBM Cloud, where Humio will monitor data health and notify users of issues, all while being simplified for end users via the one-click deployment that the IBM Cloud Paks provide. TBR believes IBM’s backing of Humio’s platform, despite being newer to market, highlights the validity of the technology in its early stages, and we predict that through the IBM Cloud Paks, which are based on Red Hat’s OpenShift platform, Humio will be successful in scaling its offering.

Red Hat builds the digital transformation autobahn, where developers are king of the road

Red Hat production systems curate community IP into a simplified horizontal platform, paving the way for scaled innovation

In a 2015 conference for financial analysts, Red Hat CEO Jim Whitehurst declared victory in commoditizing the enterprise OS market into RHEL and Windows Server, while outlining Red Hat’s intentions to do the same thing to the (then) emerging PaaS layer with OpenShift.

The closing guest speaker during the Red Hat keynote address at the 2019 summit was Microsoft (Nasdaq: MSFT) CEO Satya Nadella, who announced Azure Red Hat OpenShift. While it might still be premature to declare victory in fulfilling that aspirational objective from 2015, it certainly can be said that Red Hat has made significant progress in a short period of time.

RHEL and OpenShift represent the curation pillars for open upstream community innovations, coupled with Red Hat’s decades of open-source and service experience to deliver a capabilities-based advantage to its users. Red Hat represents the virtuous cycle of trusted platform delivery, user-contributed innovations, and Red Hat production-grade delivery of those innovations back to the community via a platform layer that is increasingly easier to deploy.

RHEL 8 delivers additional simplicity and automation capabilities to allow operators to better facilitate developer innovation

Red Hat heralds RHEL 8 as a significant improvement over RHEL 7, best illustrated by the fact that the upgrade process to RHEL 8 constitutes a simple point-and-click operation, after which automation can take over the rest of the process in seamless fashion.The latest release is said to be designed for applications to run across open hybrid cloud environments, addressing the enterprise hybrid reality. Before its official release to market at the summit, there were over 40,000 downloads of RHEL 8 in beta, which underscores pent-up demand for the release and also helped Red Hat to enhance the operating system based on invaluable feedback from those beta users.

TBR attended the Red Hat (NYSE: RHT) Summit, which featured the usual slew of product announcements. This year, the company focused intently on enhancements to Red Hat Enterprise Linux (RHEL) 8 and Red Hat OpenShift 4, which are the foundational products for the enterprise. However, more interesting were the general discussions throughout the summit about Red Hat’s business model and cultural uniqueness, which contribute to the company’s success in curating openly sourced IP into enterprise-grade technology products underpinning an ever-increasing share of business software. The value of its people and processes were regularly emphasized by reminding attendees that IBM (NYSE: IBM) is paying $34 billion for a $3.2 billion company that owns no IP.

Big Blue opens its arms, and its wallet, to Red Hat

On Oct. 28, IBM (NYSE: IBM) and Red Hat (NYSE: RHT) executives announced a proposed acquisition ― one that will be the industry’s third-largest acquisition should it gain approval. The deal, valued at $34 billion, would bring Red Hat into IBM’s hybrid cloud team, in its Technology Services and Cloud Platforms (TS&CP) group, where its IaaS (formerly SoftLayer), PaaS (formerly Bluemix) and hybrid management capabilities reside.

Sticker shock fades once you factor in the rest of the numbers

Historically, initial public offerings (IPOs) and sales of more traditional technology and software companies have been valued at around 5x their annual revenue. However, in recent years, as more cloud-native companies with subscription-based business models go public or get acquired, this multiple has steadily shifted upward. As a rather extreme example, Cisco (Nasdaq: CSCO) bought AppDynamics for $3.7 billion, a valuation of nearly 16x AppDynamics’ annual revenue, even though in the week prior to the purchase AppDynamics had been valued at $1.9 billion on an annual revenue of approximately $220 million as the company readied for its IPO.

Much of the speculation around this monstrous deal relates to how IBM can and will fund such a hefty purchase. To put this massive $34 billion figure into perspective, Red Hat’s trailing 12-month revenue for the four quarters ended Aug. 31, 2018, was just shy of $3.1 billion, indicating the deal is valued at 11x Red Hat’s annual revenue. Figure 1 shows that if Red Hat were to stay on its double-digit growth pattern and trajectory*, its revenue and operating income would be projected to more than double by the close of 2021, benefiting from access to IBM’s vast enterprise customer base.

Estimated revenue, year-to-year growth, operating margin and more for 2018 through 2021

These projections help IBM justify the large purchase price. Additionally, it is likely that the purchase price per share was set at least a few weeks ago, when there were more Red Hat shares available and at a higher price. On Oct. 1, Red Hat was trading at $133 a share, compared to the $117 per share price it was trading at on Oct. 26.

Big Blue opens its arms, and its wallet, to Red Hat

Red Hat’s projected growth is enough to justify the hefty purchase price

On Oct. 28, IBM (NYSE: IBM) and Red Hat (NYSE: RHT) executives announced a proposed acquisition ― one that will be the industry’s third-largest acquisition should it gain approval. The deal, valued at $34 billion, would bring Red Hat into IBM’s hybrid cloud team, in its Technology Services and Cloud Platforms (TS&CP) group, where its IaaS (formerly SoftLayer), PaaS (formerly Bluemix) and hybrid management capabilities reside.

While the sheer magnitude of the deal may surprise some, the underlying reasons do not. IBM’s cloud strategy was sorely due for a boost, and Red Hat has been looking for a potential buyer for quite some time. Stefanie Chiras, a 17-year IBM vet, joined Red Hat as the VP and general manager of the Red Hat Enterprise Linux (RHEL) business unit in July, likely to lead that group through the planned acquisition. The potential acquisition would also be aided by portfolio synergies around Linux on IBM hardware and Kubernetes. Additionally, IBM is pervasive in the large enterprise market while much of Red Hat’s revenue is channel-led.

What’s most important is that IBM listened to its stakeholders and the broader market, realizing that while its cloud business was growing consistently at around 20% to 25% year-to-year on a quarterly basis, that was not enough to move the needle materially to more effectively compete in cloud. The company’s recognition that it should not always promote all-IBM solutions is a noteworthy shift. Though IBM has had technology partnerships for some time, there was always the underlying perception that it would push its own solutions ahead of others, regardless of customer needs. Its recent and ongoing focus on hybrid IT enablement has changed this; and now, bringing on an open-source company could change the game for IBM.

Sticker shock fades once you factor in the rest of the numbers

Historically, initial public offerings (IPOs) and sales of more traditional technology and software companies have been valued at around 5x their annual revenue. However, in recent years, as more cloud-native companies with subscription-based business models go public or get acquired, this multiple has steadily shifted upward. As a rather extreme example, Cisco (Nasdaq: CSCO) bought AppDynamics for $3.7 billion, a valuation of nearly 16x AppDynamics’ annual revenue, even though in the week prior to the purchase AppDynamics had been valued at $1.9 billion on an annual revenue of approximately $220 million as the company readied for its IPO.
Much of the speculation around this monstrous deal relates to how IBM can and will fund such a hefty purchase. To put this massive $34 billion figure into perspective, Red Hat’s trailing 12-month revenue for the four quarters ended Aug. 31, 2018, was just shy of $3.1 billion, indicating the deal is valued at 11x Red Hat’s annual revenue. Figure 1 shows that if Red Hat were to stay on its double-digit growth pattern and trajectory*, its revenue and operating income would be projected to more than double by the close of 2021, benefiting from access to IBM’s vast enterprise customer base.

Estimates for revenue, year-to-year growth, operating income and more for 2018 through 2021

These projections help IBM justify the large purchase price. Additionally, it is likely that the purchase price per share was set at least a few weeks ago, when there were more Red Hat shares available and at a higher price. On Oct. 1, Red Hat was trading at $133 a share, compared to the $117 per share price it was trading at on Oct. 26.

Synergies make the acquisition possible; success will come down to execution

Organizational structure

The proposed acquisition poses significant integration challenges for IBM if approved. Though the company has been successful in the past with integrating software acquisitions, it has yet to make a purchase this large, and this is the first major software acquisition since the company reorganized and brought software subgroups across its various business units a couple of years ago, eliminating a dedicated software business unit. Additionally, none of the formerly acquired companies have run as stand-alone units as Red Hat is expected to be.

Red Hat’s proposed position as a stand-alone unit in TS&CP could have varying results. IBM Services’ culture and cumbersome processes could stifle Red Hat’s software-led mindset, culture and innovation. Alternatively, Red Hat’s products could be pulled through in an unprecedented number of Services engagements the company has yet to see due to its much smaller size and scale. This second scenario, however, would only be possible if IBM Services and consultants can differentiate from Red Hat’s existing systems integration partners to maintain IBM’s status as the largest services provider around Red Hat and Linux. Whether or not those partnerships will stay at the strategic levels they are at today, or at all, remains unclear.

Red Hat CEO Jim Whitehurst would report to IBM CEO Ginni Rometty. While it is very likely he would stay with IBM for the year or so required and then retire, there is the possibility, and this is pure speculation, that IBM could be priming him to be a contender for the position of IBM CEO should Rometty look to retire soon.

Go to market

Undoubtedly, IBM has set its sights on reaching more midmarket customers as its large enterprise customer base is slower and more resistant to move to cloud. Red Hat’s prevalence in the midmarket will surely help open the doors to cross-sell IBM solutions and services to these companies, if pricing is adjusted for smaller companies. Additionally, IBM will gain access to a Red Hat developer community of more than 8 million. On the other side of this, Red Hat also can bring its solutions upmarket to IBM’s largest enterprise customers.

Much of IBM’s focus as of late has been on helping customers link on- and off-premises environments and sharing data across truly hybrid environments. Its large Services arm and broad portfolio set have helped offset some legacy software and services revenue erosion in past quarters. While Linux is already relatively pervasive across the market and OpenStack has yet to garner significant demand or traction, Kubernetes is the open-source solution of choice at the moment and will be in coming quarters. IBM continues to update its IBM Cloud Private portfolio centered on Kubernetes, which can also run on OpenShift, presenting an area of immediate portfolio synergy between the two companies. The incorporation of additional open-source technologies into the mix as well as Red Hat’s interoperability with third-party cloud and software solutions only help position IBM as an increasingly technology-agnostic hybrid enabler.

Peer implications

Despite the size of the acquisition and the attention it is garnering, IBM’s cloud competitors will not face substantially altered challenges should the deal go through. Amazon Web Services (AWS) and Microsoft (Nasdaq: MSFT) will continue to dominate the public cloud IaaS and PaaS market. The two have increasingly embraced open-source technology integrations in their proprietary ecosystems, only enabling them to get bigger as they can also work with RHEL customers.

We believe that if this acquisition were to materially impact any single company, it could be Google (Nasdaq: GOOGL) and/or Oracle (NYSE: ORCL). Google struggles to compete at scale with AWS and Microsoft and does not yet have the same permission to play in the large enterprise segment. With IBM, Red Hat would gain that permission almost immediately. Oracle’s Linux offerings are based on RHEL, which could complicate a competitive relationship between IBM and Oracle. While Oracle may have more pressing areas to focus on and invest in, such as Kubernetes in tandem with its peers, the company could, should it choose not to work closely with IBM when Red Hat is integrated, look to acquire another Red Hat-like company with expertise and capabilities in open source and Linux in particular, such as Canonical or SUSE, which was just sold by Micro Focus (NYSE: MFGP) to private equity firm EQT for $2.5 billion.

Customer preferences are forming around hybrid and shifting around open source as vendors focus on acquisitions

Prebuilt devices are a ray of clarity amid the fogginess of hybrid

Hybrid can be a difficult thing to define in cloud computing. The term “hybrid” is overused by vendors but underused by customers, causing general confusion over its definition as well as solid examples of hybrid solutions. An area of the market that cuts through those areas of confusion is hybrid cloud integrated systems. These are physical devices (appliances) that are designed to integrate with public cloud services and can be used in customers’ own data centers. The idea that customers can physically touch the box and also integrate with external cloud services makes integrated systems one of the easiest and most obvious hybrid scenarios.

Examples of integrated systems solutions include Azure Stack from Microsoft and its hardware partners and Cloud at Customer from Oracle. While adoption and usage of these hybrid cloud solutions remain limited, the trend is picking up momentum and is prompting vendors such as Amazon and Google to move closer to competing in the space, particularly as customer demand from heavily regulated industries favors local versions of vendor-hosted cloud infrastructure. For example, Amazon Web Services (AWS) and Microsoft are the two front-runners in the race to win the U.S. Department of Defense’s Joint Enterprise Defense Infrastructure (JEDI) contract. While AWS has largely been seen as the overall favorite, its Snowball Edge offering does not meet the same bidirectional synchronization requirement of the tactical edge device that Azure Stack does.

Kubernetes season is in full swing as OpenStack falters

For large enterprise customers, open-source technologies have garnered much interest as part of their cloud strategies. The ability to utilize solutions that provide the same backbone as large cloud providers while maintaining the control associated with open source has been an attractive value proposition for those with the resources to implement and manage them. However, predicting which technologies will be the most commonly adopted has been more challenging, creating uncertainty around frameworks such as OpenStack, which has yet to garner significant momentum in the market.

Compounding the hurdles for OpenStack to overcome continues to be the ongoing explosion in growth among public cloud IaaS front-runners AWS, Google, Microsoft and Alibaba. OpenStack founders and former OpenStack pure plays are making notable shifts toward Kubernetes. The difference, though, is that Canonical and Red Hat are still holding onto OpenStack, while others, such as Rackspace, Hewlett Packard Enterprise, IBM and Mirantis, de-emphasize it.

Customers increasingly understand the benefits of containers and container orchestration platforms and embrace the portability and interoperability they provide. According to a recent interview done as part of TBR’s Cloud Customer Research Program, a retail SVP, CIO and CTO said, “You need to make sure there are escape clauses in your contracts in case you need to get out. Once you’re in it, you’re pretty much married, and that divorce is really bad. That’s the reason we have a container. … Because if it starts to get too expensive, we want to pull it off quickly.”

This is just one example of the immediate enterprise benefits of container and container orchestration platforms, which can change the game for enterprises in terms of their cloud adoption road maps and long-term cloud plans.

Hybridization is becoming even more widespread than customers realize

While pre-integrated devices are the most obvious examples of hybrid usage, the vast majority of activity is occurring in more subtle situations. This activity is driven by the desire among vendors to sell broader solutions and the desire among customers to implement services that integrate with existing and other new technologies. The good news for both sides of the market is that there are more capabilities than ever to put those more cohesive, integrated solutions in place.

Salesforce, whose solutions are commonly integrated into hybrid environments, has taken a notable step into the hybrid enablement space by acquiring MuleSoft. The acquisition, which closed on May 1 at the start of Salesforce’s FY2Q19, brings MuleSoft’s well-known integration Platform as a Service (iPaaS) solution and services into Salesforce’s arsenal. The implications for Salesforce, its customers and the market are vast, as the company can create connections between its applications and the variety of other cloud and legacy systems residing in customers’ environments. Salesforce quickly leveraged the iPaaS technology, bringing Salesforce Integration Cloud to market within the first few months of having MuleSoft on board, enabling customers to augment their Salesforce applications and derive greater insights from their non-Salesforce data.

Canonical’s growth play: Make customers’ and partners’ lives easier (and more economical)

TBR perspective

At Canonical’s 2018 Analyst Day, CEO Mark Shuttleworth laid out a very compelling construct for Canonical’s vision of being the link between the operating system (OS) layer and the cloud control planes. Canonical has Ubuntu OS versions to run from the largest high-performance computers with NVIDIA graphics processing units to the smallest device OSes at the heart of offers from niche vendors such as Rigado. Throughout the event, Canonical stressed multicloud interoperability through Kubernetes. The big unknown on the horizon is how to provision infrastructure for edge analytics, which sits at the heart of the strategic relationship Canonical has with Google Cloud as Google donates Borg to ensure Kubernetes does not challenge Borg the way Hadoop forked from MapReduce.

Existing virtualization economics has stalled, with premium pricing models emerging from the major and better-established competitors Red Hat (NYSE: RHT) and VMware (NYSE: VMW). The Canonical play further compresses the economics of the infrastructure abstraction and OS components, where parts will be provided for free and the services and update provisions will become the basis for the monetization model. Akin to how free Android disaggregated the device OS space and gained share against Microsoft, Canonical bets on market projections showing devices used/owned per person growing from two to three devices today to as many as 20 devices within the next five years.

It is from this vantage point that one open-source Linux distro, Canonical’s Ubuntu, was taking direct competitive aim at another (Red Hat), while likewise suggesting VMware’s time as the market maker would quickly start to fade as more and more app modernization efforts move code from virtual machines (VMs) into lightweight Kubernetes containers (clusters).

 

Canonical hosted its 2018 Analyst Day in New York City on Sept. 20, 2018. The event featured presentations from the top leadership at Canonical, including Shuttleworth, Finance Director Seb Butter, SVP of Global Data Centre Sales Jeff Lattomus, and VP of Global Sales, IoT & Devices Tom Canning. Canonical focused on business and go-to-market updates as well as key presentations by partners, such as Paul Nash from Google Cloud, outlining how Canonical has accelerated or added value to their businesses. At this year’s event, there was a noticeable blurring of the lines between cloud and IoT discussions in comparison to years past where there were more definitive tracks. Regarding both Canonical’s own strategy and its conversations with customers, it is exceedingly difficult to have a discussion about one and not the other, which is reflected in the broader IT landscape as of late.

Postcards from the edge: Complexity is here — wish it were not

“Analog dollars to digital pennies” is a phrase used to discuss the continued compression on technology price points as Moore’s Law economics, coupled with continued IP abstraction, creates economic trigger events aimed squarely at legacy business model best practices. Recently, I attended analyst events in New York City — one sponsored by Lenovo and one by Canonical — that outline these economic trigger events, albeit from different sides of the same coin.

Canonical CEO Mark Shuttleworth used the term “economic trigger events” often in his opening remarks. The idea is that technologies and new price points create trigger events that result in new economic fundamentals where some participants will be disruptors and some will be disrupted.

The rise in the hype cycle around edge computing as it joins forces with cloud, artificial intelligence (AI)/machine learning, and Internet of Things (IoT) creates a veritable Gatling gun of economic trigger events. These events accelerate business model disruption as we pivot to the Business of One era.

The disruption sits atop the continued economic pressure from commoditized hardware. What’s behind it all is that while infrastructure is valuable, it is not valued. In short, the margin moves out of infrastructure and into the business outcome. Technology enablement is less constrained by affordability and more by determining what business value can be derived from the application or use case.

Rather than being the lead decision in business investment decision making, infrastructure acquisition becomes the derived decision. The service attach rate or services drag becomes the fuzzy guide point for new inventions and new business models. Broad, ubiquitous ecosystems become imperative to generating sufficient margin in the digital penny world to justify the ongoing development, monitoring, and maintenance of secure flexible infrastructures that won’t break and will keep data secure and private.

For Canonical, this means focusing on the connection between operating system and cloud control planes to ensure a single code set operates silicon as large as high-performance computers (HPCs) and as small as single-purpose IoT devices. Compute infrastructure is assumed to work, until it breaks, and then users realize just how valuable that hidden infrastructure provisioning is.

As Canonical is hardening the abstraction layer to ensure seamless interoperability, Lenovo (and many other hardware manufacturers) create purpose-built appliances optimized for edge workloads. In some instances, these will be small appliances simply capturing data and routing it back to clouds for ingestion into massive analytics engines. In other situations, it will be very-high-performance compute engines with GPU accelerators in simple, easy-to-operate form factors where AI inference in real time has to be performed at the edge. Here again, the assumption will be that the edge appliance can operate (in a retail convenience store, for example) without the need for any technically savvy personnel to monitor, manage or provision the device on-site.

Look for more detailed special reports from TBR on the Lenovo and Canonical industry events in the next few weeks.