January 13, 2016
Photo Credit: PicJumbo
I made a prediction a couple of years back, and we’re beginning to see signs that it might just come true, a bit sooner than I expected, but still coming true.
The public cloud market is getting more and more crowded, to the point of saturation of the marketplace by hundreds of players of various and assorted sizes. Massive media attention has brought thousands of customers into those cloud platforms, at all different levels. The result is a highly segmented, nearly fractured, industry that cannot hold in its current form. The logical conclusion of this phenomenon – to use a term coined by a co-worker of mine – will be “Cloud Condensation,” and we’re already beginning to see it.
Cloud Condensation is the phenomenon of public Infrastructure as a Service cloud shrinking and creating two types of fallout:
1 – Through mergers, acquisitions, and corporate collapse; fewer public cloud companies will exist, and
2 – Companies who had begun to move resources to public cloud will reduce the amount of resources they place there, and in fact will begin pulling back many of those resources into private datacenters and/or traditional co-location facilities.
This is not to say that cloud itself will disappear – far from it. The cloud principle is strong and will continue to grow and expand over time. Cloud Condensation simply refers to the mind-shift of moving from public cloud to private or on-prem cloud platforms. There are also a lot more types of cloud platforms than just IaaS, and public SaaS and PaaS continue strong growth.
We are, however; seeing the beginnings of Condensation in public IaaS, and there are a few strong indicators that it’s happening:
– HP dropped Helion Public Cloud late in 2015. While they will continue to focus on HP Enterprise Cloud (their private cloud offering), they began to realize that public IaaS cloud was too crowded a sector.
– Citrix sold off Cloud Platform just recently. OpenStack and CloudStack are still strong, but both are designed for hybrid clouds and converged architecture. Cloud Platform is the tool for managing public clouds in their portfolio.
– Several smaller public cloud players are being acquired by larger players. This is pretty normal in any business, and only points to Condensation when combined with other factors.
– Verizon is winding down its public cloud offerings
– Several other traditionally public cloud platforms are beginning to focus more on managed services
Taken together, there is an industry push to private and on-prem IaaS cloud, and away from public cloud. Once again, this is NOT a death-knell for cloud at all, just a shift in how the cloud looks in the modern world. I suspect we’ll continue to see more of this consolidation and contraction in the market, with larger public clouds taking over market share from smaller shops – absorbing them or driving them under – and the rise of services and platforms designed for private and managed clouds taking the fore. My revised estimate is that we’ll see Condensation kick into high gear within the next 8 months, and extend out for another 12-18 before we have the new paradigm.
Cloud – in all its forms – is here to stay. I just suspect (and we’re starting to see some indication) that we’ll see many companies moving to managed, private, and on-prem cloud platforms.