Business intelligence, artificial intelligence and large data are the most common applications of the cloud.
More than half of businesses want to become the first cloud enterprise by 2020, according to the latest 451 study, which largely attracts public clouds and SaaS services.
The most popular business areas that want to use the cloud are business intelligence, machine learning artificial intelligence, and large data, suggesting that information processing is the most compelling reason to move to the cloud. Layer based cloud instead of on-premises solutions.
Although businesses want to move their data management to the cloud, in reality more than 60% of them lack the strategy to drive successful conversions.
Melanie Posey, research vice president and general manager of research, said: “Survey shows a lot – but certainly not all – organizations have finally reached the point where they can concentrate. In the effort to help distinguish the business, rather than just maintain the light, the Business Intelligence Unit 451 of the Research Division.
In 2018, we hope that with many of these efforts we will focus on new ways of optimizing and analyzing data. “
A survey of 451 studies shows that Microsoft and Amazon Web Services (AWS) have become the largest providers of cloud technology strategies for businesses, with Microsoft holding 35% of the market in 2019 versus current at 33% and AWS will increase from 7% today to 17% in the next two years.
Nearly one-third of businesses say that machine learning and AI are a priority in business transformation, although only 12% use technology today. Twelve percent of respondents explained the importance of blocking as part of their reorganization plan, but is expected to increase in the next 12 months as businesses start deploying technology this year.
All this being said, we are talking about a pricing and contracting change that can be imitated by other vendors. I would expect that Amazon Web Services and Google Cloud Platform will continue to work on a granular basis in charging by the second and perhaps digging down into milliseconds, megabytes or whatever unit provides additional specificity. Based on my two decades of experience on telecom and IT billing across both providers and enterprises, I think that rate cuts and increasing pricing granularity will continue. However, these cuts will reflect the increasing efficiencies of scale that these vendors build out and will not provide massive benefits. This pricing is built on attracting initial business and earning lock-in. But there is a reason that Amazon Web Services is currently the main source of operating profit for Amazon as a while: cloud computing is very profitable as it is currently priced, bought and used. Amalgam Insights estimates that in the average enterprise cloud environment that has been up for 2+ years, 30 percent of current services is either unused or represents excess and unnecessary capacity. Not surprisingly, this matches up well with the around 30 percent margin that Amazon receives on Amazon Web Services.
Oracle is leading the way as the first cloud provider to provide true enterprise pricing options. I believe Microsoft should follow suit, as it can compete in some respects and Azure clients need the flexibility to build more robust and complicated applications on the Azure Cloud over time. It would make sense for Microsoft to support the need for flexibility for established clients. IBM should also take this route with the additional ability to expand credits to other products such as the zSeries mainframes.
This split would lead to the first true vendor bifurcation in cloud infrastructure as Amazon Web Services and Google Cloud focus on the technical developer and architect buyers and Oracle, Microsoft and IBM focus on the business buyers who seek to take advantage of purchasing at scale to gain consistency and broad-based support. There is room for both approaches as the cloud computing market starts to engulf the traditional data center market. Whether this happens or not, I’ve provided my perspective.
Regardless, Oracle has provided a real alternative to its competitors in offering a Universal Credit approach across IaaS and PaaS. Although it’s not going to be an apples-to-apples comparison, I think that fast moving companies that understand their organization’s current positioning on the “edge vs. distributed” computing spectrum will be well suited to work with Oracle and provide a broad cloud services toolkit. Although I would recommend for other cloud infrastructure providers to follow suit, I believe that the complexity of supporting this model will be difficult to quickly replicate in the near term.
As much as we all talk about the cloud, it is easy to forget that the cloud computing market is still relatively new. As providers start to figure out exactly what their business models should truly be to provide consumer satisfaction and success, my key recommendation to fiscally responsible IT departments is to follow the pricing units. Pricing is a key differentiator in cloud, but the differences are less about understanding 2.63 vs. 2.64 pricing differences and much more about tracking the units, transferability, and service levels across all relevant vendors being considered.
In conclusion, my key recommendation for CIOs trying to get cloud expenses under control is: Look at how your cloud services are being charged and decide whether the pricing is aligned with your preferred model of cloud procurement and management. This business decision will differentiate executive CIOs from operational CIOs in managing the cloud. CIO-based cloud management decisions will end up fundamentally shaping the strategic importance of IT managers. Choose wisely.