Everybody talks about the cloud - I even wrote a book about it, On Top of the Cloud. Today, however, I want to pose a thought experiment: What would happen if enterprise cloud computing went away?
It's a valid question, especially when you consider that the market for enterprise cloud services has essentially narrowed to two players, Amazon and Microsoft. To be perfectly honest, I really don't think Salesforce, Oracle and IBM are long-term serious contenders in the big-time cloud wars. At some point, they're going to slowly pull away from enterprise cloud offerings like IaaS (infrastructure-as-a-service) and PaaS (platform-as-a-service). That's my prediction.
Last week, Vince Martin wrote a great article for Investor Place in which he argues that Oracle is unlikely to catch up to its rivals. "When it comes to Oracle Corporation (NYSE:ORCL), there's one basic question. Is Oracle stock the next Microsoft Corporation (NASDAQ:MSFT)? Or is it the next IBM?" he writes. "The clear concern is that the transition to cloud is leaving Oracle behind. Similarly, the shift away from hardware has led IBM to struggle, with revenue dropping for 22 straight quarters before growth finally arrived in Q4."
From my perspective, the larger question is whether or not the enterprise cloud has a real future. There's no question that startups and SMBs (small-to-midsize businesses) benefit enormously from buying cloud services "by the drip." You can make a good case that Silicon Valley depends heavily on the cloud to sustain its startup community. That makes sense and I won't argue it.
But here's where I think many analysts and investors are missing the boat: Newer technologies and techniques will make it easier for large corporations to build and maintain their own enterprise architecture. In other words, they're not going to need the cloud. I know it seems like déjà vu, but that's exactly what's likely to happen.
So I'm throwing down the gauntlet. Let the debate begin: Do we need the "old" cloud or are we ready for a newer model?
The next stop on the HMG Strategy 2018 World Tour is the 2018 Dallas CIO Executive Leadership Summit on March 7. There's still time to register and we would love to see you there.