The Cloud rains on a brittle market

Market trends gain strength from the correctness of their promises. Is it cheaper, faster, more secure? Dilute the promises and a forceful market becomes brittle. Crack a brittle market and revenue disappears.

By the way, what ever happened to Netbooks? Four years ago Netbooks were going to save the PC industry. Now they are gone, victims of the brittle market. IT departments loved Netbooks as their convenient answer to popular tablets. In a brittle market Netbooks were swamped by BYOD.

The market for enterprise computing equipment versus cloud services is in the brittle stage. The promises of the cloud gain strength while counter forces are losing at the flanks. This post is not about the cloud. This is about the market. Promises of lower cost, ease of use, scalable power are strengthening. The opposition is brittle and when it breaks the flow of dollars will shift dramatically.

The dollars in question are those spent by corporations on servers, storage and networking – the data center. Corporations buy name brand equipment. Cloud providers develop their own equipment and save money and by doing so. They also change the dynamic of revenue growth and profit generation in the IT market. A shift from corporate computing to the cloud means more than a redirection of dollars. It means a fundamental shift as cloud service providers challenge OEM equipment vendors in the development of new technology.

The cloud does to IT management what robots did to manufacturing so, naturally, there is internal management resistance. Management’s main and plausible objection has been security.  They also point to the increased cost of data connections. While conceding that these are crucial, and without in any way diminishing their importance, realize that one day security will be solved and the cost of data transport will continue to decline.  As this happens the brittle market will crack.

What happens then? Well, consider that Google, like all of the large scale cloud providers, does not use state of the art high end servers of the type you see at Interop. They optimize their cost, power consumption and space utilization with a vast array of commodity systems. On top of that, the Google file system competes directly with the value delivered by classic storage system vendors, demonstrating that cloud providers dilute the need for major manufacturers.

Imagine a world where pick up/ drop off laundry service was incredibly cheap and effective. Would you own a washer and dryer?

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