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How ecosystems turn cloud technology into solutions

As enterprise customers’ cloud deployments mature, they are exploring a greater variety of technology-enabled business processes. This trend presents a substantiative opportunity for cloud platform contenders but demands new ways of working with ecosystem partners. While independent software vendors (ISVs) add depth and breadth to portfolios, bringing solutions to market requires greater involvement from SI and consulting entities that understand the processes customers are aiming to modernize, particularly considering the resurgence of industry-led solutions and services.

In this exclusive TBR webinar, Principal Analyst Allan Krans and Senior Analyst Evan Woollacott will discuss the evolving ecosystem among cloud platforms, ISVs and professional services firms as well as best practices developing in the cloud space.

Don’t miss:

  • Review of cloud platform latest portfolio initiatives
  • The role of ISVs in platform programs, and how these programs are encouraging partner buy-in
  • Professional services and consulting firms acting as the tip of the spear to vendor go to market

Register today to reserve your space

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

IaaS utility pushes hosted private cloud leaders to ramp up investments in flexible, vendor-managed solutions

IaaS utility pushes hosted private cloud leaders to ramp up investments in flexible, vendor-managed solutions

Infrastructure services hosted as single-tenancy offerings remain desirable to customers that are looking to bridge the gap between utilizing public clouds and building their own private clouds on premises. The global COVID-19 outbreak weighed heavily on many IT vendors’ business models during the quarter; however, the hosted private cloud space was less susceptible to the economic impacts of the pandemic given the annuity-based revenue streams gained through cloud sales. Long term, TBR expects the hosted private cloud market to record pockets of growth as we expect COVID-19 to prompt greater cloud usage, and many customers will turn to private cloud solutions as a preliminary step in the digital transformation process. Further, benchmarked vendors will benefit from enterprises’ increasingly hybrid scenarios, which are generally purchased on a workload-by-workload basis.

The Hosted Private Cloud Benchmark analyzes different enterprise use cases and vendor strategies. For example, the benchmark looks at how workloads such as ERP will drive demand for hosted private cloud SaaS due to the mission-critical nature of those services and their associated data.

Streamline and extend: IBM’s play for what it calls ‘hybrid multicloud’ or ‘Chapter 2 of the Cloud’

IBM will use OpenShift to bring a consistent cloud value proposition, remaining agnostic toward delivery method, location or cloud provider

In 2015 Red Hat’s CEO made a statement at an analyst day presentation that Red Hat aimed to do to the PaaS layer with OpenShift what it had done to the enterprise operating system layer with RHEL. That strategy was thoroughly validated with IBM’s acquisition of Red Hat. At the core of the IBM Cloud Summit were discussions of how OpenShift was the only platform layer capable of running on multiple clouds, in what IBM describes as hybrid multicloud. In IBM’s definition, hybrid denotes the ability to run applications on premises, in private clouds, in public clouds and at the edge. Multicloud denotes the ability to mix and match different cloud providers across the hybrid continuum. Many vendors can deliver single brand — or monocloud — hybrid that is a new version of vendor lock-in. IBM asserts OpenShift is the only cloud operating system and development layer that can enable customers to code once and deploy on any form factor from any technology vendor.

Stefanie Chiras, VP and general manager of the RHEL Business Unit, articulated the central Red Hat value proposition as being an enterprise software company with an open-source development model. Involved in a variety of different open-source projects, Red Hat monitors these myriad projects, filtering the most powerful innovations from these upstream contributions into the RHEL operating system before hardening these projects into enterprise-grade products and adding the necessary security and DevOps deployment features needed for large enterprises.

This hardened curation of open-source community projects has seen Kubernetes container management rapidly emerge as a de facto deployment standard, which has Linux as the underpinning operating system. OpenShift stitches RHEL and Kubernetes together with additional development services, and IBM will pivot all its software into cloud-native deployment models resting on top of this foundation to enable the software to run anywhere its customers require.

IBM bets on Cloud Paks to simplify application modernization migration to the cloud in what it calls the ‘second chapter’

IBM’s point of view is that the cloud is entering its second chapter. In the first chapter, which has been the last 15 years, enterprises have moved some development and some customer-facing applications to the cloud, but the deep back-office systems of record have remained on premises for a variety of reasons, including the technical debt of the custom applications, as well as concerns around security and compliance.

Cloud Paks are the manifestation of three to five years of ongoing development work to refactor their monolithic middleware applications into containerized, cloud-ready services. From a packaging standpoint, the Paks simplify the sprawling IBM middleware portfolio into pre-integrated solutions that address the most pressing challenges to cloud migration and operations. All Cloud Paks sit atop RHEL and OpenShift, with IBM promising “single button push deployment” when running applications on the IBM Cloud. Being underpinned by RHEL and by OpenShift maintains infrastructure independence and enables enterprise customers the ability to choose any vendor cloud or underlying on-premises infrastructure to run these applications anywhere.

The IBM Cloud Summit 2019 combined several main IBM initiatives into a full day of executive presentations for the analyst community. IBM’s presentations on strategy and innovation centered on the opportunity to migrate 80% of the workloads still run by traditional IT delivery methods to the cloud. IBM’s legacy strengths, combined with more recent investments, make the company well suited to help customers address the remaining 80% of IT workloads, most of which are mission critical. IBM’s recent landmark investment was the purchase of Red Hat, and IBM laid out in even greater detail how that will benefit customers. This was followed by a series of presentations taking aim at the untapped market opportunity as well as the various middleware services and professional services IBM can bring to bear on the application migration and modernization efforts for its customers resting on the foundational elements of Red Hat Enterprise Linux (RHEL), Red Hat OpenShift and Kubernetes container management clusters.

Technology Business Research, Inc. announces 3Q19 webinar schedule

HAMPTON, N.H. — Technology Business Research, Inc. (TBR) announces the schedule for its 3Q19 webinar series.

July 24          Quantum computing leaps into customer’s transformation-centric conversations        

Aug. 14        The evolving background for winning private cloud customers

Sept. 11       Leading webscales tackle the connectivity problem; CSP business model under threat

Sept. 18       Cloud pairs well with partners

Sept. 25       IoT in 2019: New strategies, new ecosystems

TBR webinars are held typically each Wednesday at 1 p.m. EDT and include a 15-minute Q&A following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

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The evolving battleground for winning private cloud customers

Of the 200 enterprises surveyed in TBR’s 2H18 Cloud Infrastructure & Platforms Customer Research, 85% have adopted private cloud and TBR projects the hosted private cloud IaaS market will grow to $24 billion in 2022, from $18 billion in 2018. This growth creates opportunity for providers across the value chain and encourages the entry of new disruptive market players.

Join Angela Lambert, Cassandra Mooshian and Stephanie Long on Aug. 14 for a discussion on current market trends and opportunities in private cloud and supporting technologies as well as the questions providers should be asking to capitalize on those opportunities. Additionally, we’ll highlight strategies deployed by market disruptors. The team will dig into the evolving private cloud market, including:

  • Overarching customer adoption trends, vendor developments and market opportunities
  • How hyperconverged technologies are supporting private cloud expansion
  • Market impact of disruptors such as AWS Outposts
  • Key questions vendors should ask to assess their market position and capitalize on the private cloud market opportunity

TBR webinars are held typically on Wednesdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.

For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

Operators are partnering more deeply with webscales to support multicloud and hybrid environments

Combined Cloud as a Service revenue for telecom operators in Technology Business Research, Inc.’s (TBR) 4Q18 Carrier Cloud Benchmark rose 13.2% year-to-year in 4Q18, primarily due to investments in new data centers and portfolio expansion in growth segments such as SaaS and hybrid cloud. All benchmarked companies sustained year-to-year Cloud as a Service revenue growth as significant opportunity remains for carriers to target businesses seeking greater cost savings, scalability and efficiency by migrating traditional infrastructure and applications to the cloud.

Combined IaaS revenue among benchmarked companies rose 11.2% year-to-year, driven by portfolio expansion and data center investments to reach customers in new markets. IaaS revenue growth will decelerate over the next several years, however, as operators increasingly emphasize supporting in-demand IaaS solutions from third-party providers such as Amazon Web Services (AWS) (Nasdaq: AMZN) and IBM (NYSE: IBM) over first-party IaaS platforms.

Other Cloud (which includes SaaS, PaaS and BPaaS) revenue rose 16.8% year-to-year, driven by the adoption of services including unified communications, CRM and office productivity solutions. Operators are capitalizing on the demand for SaaS and PaaS applications by cross-selling the solutions with IaaS platforms and other network services.

The bulk of revenue is being generated in APAC and EMEA as local operators benefit from data sovereignty laws that require cloud data be stored in local data centers, which is slowing the momentum of U.S.-based webscale providers. The Americas accounted for only 15% of Cloud as a Service revenue in 4Q18, as AT&T and Verizon are no longer competing in the IaaS market and Asia- and Europe-based operators are primarily targeting foreign-based multinational customers with operations in the Americas.

Graph showing 4Q18 total Cloud as a Service revenue

TBR’s Telecom Practice provides semiannual analysis of Cloud as a Service revenue in key segment splits and regions for the top global carrier cloud operators in its Carrier Cloud Benchmark. Operators covered include Bharti Airtel, British Telecom, CenturyLink (NYSE: CTL), China Telecom, Deutsche Telekom, Korea Telecom, NTT, Orange, Singtel, Telefonica (NYSE: TEF) and Vodafone (Nasdaq: VOD).

IBM marries on-premises, private and public-cloud data

Offering a multi-cloud, portable hybrid integration solution is important for IBM in a few ways, said Cassandra Mooshian, a senior analyst with Technology Business Research. It greatly reduces the perception of vendor or platform lock-in, which in the world of hybrid IT is attractive, Mooshian said.

“It underscores that IBM is willing to play in a multivendor world (rather than promoting IBM IaaS as the technology underpinning ICP and solutions atop it), it can help bring IBM to the table more often in enterprise and midmarket organisations now that it is ‘playing nice’ more often with peers, and it addresses a fundamental pain point that IT departments are facing, linking on-prem apps and data to cloud apps and data such that processes can become more efficient and customers can get the most business value,” Mooshian said.

Full article

Commoditization economics and emerging workloads disrupt the data center landscape

Commoditization mitigation strategies require business model shifts and an ever-watchful eye on exascale cloud entrants

Volume or value?

Toward the end of 2018 in the data center market, two distinct vendor strategies emerged: Vendors began either increasing sales volume or selling lower-volume but higher-value solutions. TBR believes that in 1H19, now that vendors have determined their camps, they will begin to craft competitive strategies directly targeting specific peers. For example, Dell EMC has publicly stated its intent to increase its market share in both servers and storage, and we believe the vendor will target key competitors to gain this share. Similarly, Lenovo’s large-scale data center investments imply significant competitive goals.

In February Lenovo unveiled TruScale Infrastructure Services. This directly competes with Hewlett Packard Enterprise’s (HPE) GreenLake and Dell EMC’s Cloud Flex. It also addresses customer demand for private cloud infrastructure that is financed like a public cloud offering. TruScale is available for Lenovo’s entire stack of data center infrastructure solutions. In April Lenovo unveiled a server portfolio refresh, which likely reinforces its TruScale solutions and increases its competitive edge against Dell EMC and HPE.

TBR believes that during the next few months, Dell EMC and HPE will fight back against Lenovo’s marketing tactics to preserve market share. HPE has an advantage in that it is pursuing value-centric data center sales, so it is likely willing to concede less-profitable sales to Lenovo or Dell EMC. Dell EMC’s stated objective to increase market share in servers and storage will increase competition between the company and Lenovo as both aim to scoop up HPE’s lower-margin customers.

ODM participation heats up as commoditization drives provisioning simplicity

Because data center hardware becomes increasingly commoditized as software capabilities become more advanced, we believe data center vendors will increasingly find themselves competing against ODMs, especially for larger deals. Smaller customers will still show a preference for OEMs as they need the additional software and services provided with OEM data center solutions. Lenovo’s manufacturing capabilities give the company an advantage in the hyperscale space, where Lenovo’s past financials illustrated some successes, and enable the vendor to differentiate from its OEM peers.

On the hyperscale front, ODMs are rising to dominance, but OEMs such as Lenovo remain a force to be reckoned with in the space. As cloud becomes an increasingly central piece of IT environments, public cloud providers seek ways to expand their environments as cost-effectively as possible to preserve profits. TBR believes very large enterprises are likely to explore leveraging hyperscale vendors as well for their on-premises environments if it is cost-effective.

Consumption-based pricing models tie to the commoditization march

TBR’s Hyperconverged Platforms Customer Research continues to highlight the correlation between private cloud installments and HCI. Most recent findings indicated that 80% of respondents leveraged their HCI purchase for a private or hybrid cloud environment. Since customers are already turning to HCI for cloud, it is a logical next step for vendors to price HCI like a public cloud solution to deepen the competition.

With their channel partners also engaged, Dell EMC, HPE and Lenovo are the three main players in the consumption-based pricing space. Their solutions are not limited to just HCI, but HCI is one of the solutions that can be purchased in this manner. The key value proposition of consumption-based pricing for data center vendors is the ability to bundle software and services into hardware consumption-based deals. This is likely to boost the margin on the solutions. Further, it guarantees larger deals, as in many cases, these consumption-based pricing deals lock customers in for a predetermined duration that has early termination penalties.

Public Cloud Vs. Private Cloud: Top Pros And Cons Of Each

“If you had a new initiative — say if you wanted to do a new marketing campaign — with private cloud, you still have to go buy all the servers, hook them up and orchestrate it before you could even get to executing that. With public cloud, the IT resources are ready whenever the business is ready to execute the new initiative.” — Senior Analyst Allan Krans

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IT budgets are shifting in HCI’s favor

Infographic discussing TBR's hyperconverged infrastructure research for 2H18

Key findings from TBR’s hyperconverged infrastructure (HCI) customer survey

87% of respondents indicated that they were likely to make their next HCI purchase from their current HCI vendor.

80% of respondents are leveraging HCI for a cloud installment.

68% of respondents cited their desire to purchase hyperconverged directly from teh vendor rather than through channel partners or systems integrators — an increase from 59% in 1H18.

66% of respondents indicated software quality and reliability and 63% indicated hardware quality and reliability were important factors in their HCI purchasing decision.

 

For more information, contact Data Center Analyst Stephanie Long at [email protected].