Tag: Cloud

Google and Amazon will win cloud wars

Posted on October 14, 2015 by Nick Farrell - News

Beancounters from Forrester believe that the future of cloud computing belongs to Amazon and Google.

Analyst John Rymer says “public cloud services,” which is where the future lies and even Dell’s EMC purchase can’t change that.

Amazon and Google now offer their own infrastructure to the rest of the world as cloud computing services. This will be bad news for Microsoft which is bigger than Google at the moment.

Forrester’s report, which draws on interviews with vendors and customers across the market, looks exclusively at “public cloud services” rather than private clouds.

Rymer and Forrester now call the public cloud a “hyper-growth” market. Its new report predicts that this market will grow to $191 billion by 2020. That’s 20 percent more than they predicted in their previous report, back in 2011.

“The adoption among cloud among enterprises, which is really where the money is, has really picked up steam. It’s a big shift. The cloud has arrived. It’s inevitable.”

The report encompasses a wide range of services, like Amazon’s EC2, which serves up virtual machines where you can run practically any software you want and Microsoft Office 365, a suite of pre-built and configured software applications you can tap into via the ‘net.

It said that companies like Amazon and Microsoft and Google continue to expand across all these areas. Amazon just introduced a sweeping array of new services last week.

According to the report, “cloud platform services” like Amazon EC2, where you can build and run your own software, will be a $44 billion market by 2020. Meanwhile, back-end business services will reach $14 billion, and cloud software applications will hit $131 billion.

“A lot of businesses are now saying: ‘I want to move my operational application, back office applications, into public clouds. That’s a big deal. In the past, so many people said: ‘I’m never going there.’ Now they’re actually working at it.”

The public cloud won’t take over the whole IT market, Rymer says, but this is where the big growth lies. According to Rhymer, software-as-a-service offerings such as Office 365 are growing the quickest at the moment.

The biggest winner here will likely be Amazon because it has a massive customer base and they’re been at it longer.

Amazon has revealed that its cloud operation is now a $4.6 billion business, and the company expects it to grow to $6.23 billion by the end of the year. The next-biggest player is Microsoft. In April, Redmond said it’s on track to reach $6.3 billion in revenue this year, including sales of its Office 365 and its Dynamics customer relationship management service. Google, in many respects, has a technical lead on Amazon and Microsoft, but it was slower to market. IBM, with its acquisition of a company called SoftLayer is also a presence.

Services from Google and IBM may not grow as quickly as Amazon’s. But they will grow. It’s where the world is moving, the report said.

Cloud no panacea as Citrix tries to sell itself

Posted on September 23, 2015 by Nick Farrell - News, Products

It would appear that tacking “cloud” onto your product list is not proving to be a panacea for IT company woes.

Citrix, a US cloud computing company, is making a final attempt to sell itself as a whole before it embarks on asset sales, according to people familiar with the matter.

Citrix, which had attracted the interest of private equity investors before it agreed in July to give a man called Elliott a seat on its board of directors, is having new conversations with buyout firms.

Apparently the outfit is looking to hardware makers like Dell who might want to create a product and cloud package.

Citrix announced in July it would explore strategic alternatives for its GoTo family of products, including videoconferencing and desktop sharing service GoToMeeting. However, a sale process for these assets has not started yet because Citrix wants to see if it can still sell itself at a satisfactory valuation, according to the sources.

If Citrix does not sell itself it will sell or spin off its GoTo products, and other methods to asset strip itself.

Citrix provides communications software and networking solutions for businesses. It reported net income of $251.7 million in 2014, down from $339.5 million in 2013.

Earlier this year, Elliott called on Citrix to sell some units, cut costs and buy back shares to make up for six years of underperformance. In addition to the GoTo business, Elliott has called for Citrix to explore the sale of NetScaler, which helps speed up Web-based applications.

Elliott clinched a deal with Citrix in July that gave Jesse Cohn, one of its senior partners, a seat on the company’s board. Citrix also said it would start a search for an independent board member, mutually agreeable to Citrix and Elliott.

It also said at the time that Chief Executive Mark Templeton was retiring and that it would search for a new CEO.

Earlier this month, Citrix said it would repurchase up to an additional $500 million of its common stock.

Oracle’s cloud deals questioned

Posted on July 13, 2015 by Nick Farrell - News

Oracle appears to be forcing corporate clients to buy its cloud products using a complex orchestrated legal maneuver in the dark.

Business Insider claims that Oracle is pressuring some of its customers to add cloud to their contracts that they neither want nor plan to use by using a tactic insiders call “the nuclear option”.

After stuffing up its revenue and profits in the quarter that is traditionally its strongest, Oracle is under pressure. However Oracle’s CEO, Safra Catz, said analysts blew past its own internal expectations for cloud computing sales. Cloud accounted for about $2.3 billion out of $38.2 billion in revenue.

Chairman Larry Ellison said that was great because every $1 million of cloud contract is worth $10 million over the life of the deal, compared to being worth $3 million for a typical software contract.

But Business Insider claims that Oracle is using its software licences to force customers into these lucrative contracts.

Oracle licenses its software under complex legal conditions. Users have to pay for Oracle software using a variety of metrics such as how many are using the software and which features of the software are being used.

Oracle makes it extremely easy for admins to turn on new features or add more users, and then pay for that increased usage later. That system involves an “audit.”

Much of the time, an audit is used as a sales tactic. Instead of simply paying a big bill, the customer agrees to buy more over the long haul.

If Oracle thinks the customer is really abusing the terms, it whips out the “breach notice,” which warns a customer that they are in violation and must stop using all Oracle software in 30 days.

That’s risky, because it allows the customer to walk away from its Oracle contracts.

They can’t really do that because it can take years to change a database and Oracle is giving them a month or forces them to negotiate.

When they do Oracle says they will have to pay an outrageously high out-of-compliance fine or add cloud “credits” to the contract.

Until this year, Oracle didn’t lightly use the “nuclear option” breach notice but now it is using it even more.

Oracle had an especially good quarter selling cloud in the EU were it was used six times so far in 2015. Business Insider said that it is being used more and more and Oracle is becoming more aggressive

Cloud channel support is slack

Posted on June 9, 2015 by Nick Farrell - News

The Cloud Industry Forum has warned cloud customers are not getting the levels of support they need from channel partners when it comes to help migrating to the cloud.

In a report the Forum said that part of the problem is that there are some inexperienced channel players who are yet to really grow into being cloud providers and customers needed to make more careful assessments of potential partners.

Customers were having to deal with the result of poor integration with existing legacy systems and a failure by the partners to thoroughly assess the ability of the user’s network to deliver a stable product.

Overall the CIF findings were positive with 90 percent of customers expressing a positive satisfaction rating and 70 percent of IT buyers expecting to increase their use of cloud in the year ahead.

But since cloud migration is a key part of the whole business it does seem to be that more work needs to be done.

The CIF findings also come on top of a recent report from LogicNow that seems to suggest there is a worrying disconnect between service providers and customers.

The gap between customer expectations and partner service plans is a wide one, according to the LogicNow ‘Global IT Service Providers Harmony Report’.

The research suggested that most IT buyers started out a discussion with a service provider with the intention of getting help with a specific, business critical need. But the research found that the channel saw the chance to push wider services and tended to follow their own agenda.

Speaking last month, on the launch of the report Dr Alistair Forbes, general manager at LogNow, said that service providers needed to be patient about rushing into talk to a customer about a range of investment options, rather than dealing with the specific concern brought to their attention.

“Pushing strategic consultancy too early in the relationship gives an impression of under-valuing the immediate concern weighing heaviest on the customer’s mind. IT departments engage with Service Providers because they have a particular problem that needs solving. This must be addressed first to earn the opportunity of a strategic engagement later on,” he said.