Cisco joins the list of Public Cloud casualties as the big four continue to exert market dominance
The world was hardly shocked by the recent announcement by Cisco that it is to kill its public cloud project, Intercloud, at the end of Q1. Having already seen off the likes of HP and Verizon, the public cloud market continues to consolidate as the ‘big four’ market players (Microsoft, Amazon, IBM and Google) increase their dominance.
So what does this trend mean for public cloud users? Well, right now, while the race is on, the consumer of cloud services is benefiting from price competition and what seems like almost daily supplementary service rollouts from the likes of Microsoft and Amazon as the former continues to aggressively eat into the latter’s market share, particularly through exploitation of stronger Hybrid and PaaS (Platform as a Service) approaches.
However, as data volumes, compute requirements and connectivity requirements continue to experience explosive growth, public cloud vendors still do not have all the answers and the erosion of real vendor choice is a concern in the longer term.
Already, from a purely financial standpoint, we have seen many examples of ‘The Boomerang Effect’ in enterprise cloud deployments. Organisations are bringing workloads back, primarily to combat cost escalation in their public cloud deployments and achieve tangible savings that can be made by returning to the Data Centre (in a recent US survey, over 60% of CIOs stated that they have returned sizeable workloads from public cloud services).
In 2016, we saw significant service interruptions for Google, Salesforce, Apple, Amazon (storm damage) and Microsoft (Office 365 in January and two Azure outages in September), so despite the headline ‘belts and braces’ assurances of the sales paraphernalia, 100% availability is never a guarantee, and in practice, rarely achieved over longer terms. An additional concern for public cloud clients is the lack of access to resources to deal directly with availability or security issues (or someone to get answers from when the lights are off).
In summary, while the top public cloud vendors will continue to prosper, the CIO or CTO needs to step back from the colossal sales and marketing resource employed by these industry giants and make certain that they fully understand the real costs, security/availability concerns and overall control issues relating to their public cloud strategy. More often than not, private cloud deployment (particularly for compute and memory intensive environments) can remain the better option for their business.