As The Cloud Consolidates Ever More Workloads, Aligning With Cloud Service Providers Is Key To Surviving

The future of IT is in the cloud, and solution providers who do not align themselves with one of the key players in the cloud services arena risk fading into obsolesce.

That's the word from Thomas Del Vecchio, director of research at Enterprise Technology Research, who told an audience of solution providers and cloud providers at this week's NexGen Cloud conference that the IT landscape is changing rapidly to revolve around managed hosting and the cloud, and in particular around Amazon Web Services and Microsoft Azure.

It is growing more and more important for channel partners to make sure their solutions are aligned with the key vendors whose platforms will be the focus of a large part of application development going forward.

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"Your job is to have great arrows in your quiver," Del Vecchio said. "If you pull out an arrow and it's blunt and doesn't penetrate the customer, why are you there?"

Based on studies that Enterprise Technology Research conducted with C-level executives from Fortune-500 and Global-100 companies and other large entities, it has become clear that public cloud adoption is quickly disrupting traditional architectures and IT stacks, Del Vecchio said.

At the same time, Microsoft and Amazon are constantly expanding into new product areas, which is hurting pure-play and legacy vendors, he said. "That's why we're seeing a lot of consolidation," he said.

Supporting customers with cloud-ready technology will make partners more relevant with customers than focusing on what Del Vecchio termed "monolithic technology" going forward. "If you're not cloud-born and cloud-ready, you're in trouble. … You'll be competing with AWS and Microsoft."

IT spending in general is moving from such areas as storage, networking, IP telephony, video conferencing, servers, virtualization, and enterprise content management and more towards managed hosting and the cloud, analytics and big data, security, and data warehousing, according to the most recent Enterprise Technology Research studies, Del Vecchio said.

As examples of the shift, Del Vecchio said cloud storage is replacing in-house storage, cloud applications are replacing monolithic applications, and virtual machines are being replaced by containers, server-less platforms and cloud infrastructures.

This means channel partners have to look at smaller, more focused tools that work with the cloud when looking at customers' future IT infrastructures rather than at larger monolithic platforms, he said. And that is almost an oxymoron. "Everything is getting smaller," he said. "But it's being driven by two players."

There are, however, a few exceptions to the rule where smaller companies can win, Del Vecchio said. For instance, he said that while AWS and Microsoft have huge platforms that are expanding into and taking over many parts of the IT infrastructure, they know that other companies can offer better solutions, including within the security industry.

Certain markets such as banking, HIPAA-related processes, or content sharing have yet to be rolled up because they cannot be easily rolled into larger platforms, Del Vecchio said. "These companies don't want to be under the eye of regulation," he said.

Another thing that helps mitigate the rolling up of IT into a couple of key public cloud providers is the hybrid cloud, which allows businesses to keep mission-critical data on-premises and move processes like dev-ops and customer-facing operations to public clouds, Del Vecchio said.

"We're not at the point yet where [vendors] are disrupted all the way down to the pure play. ... But they're moving there," he said. "They want it all."

The squeeze on the IT business by companies like Microsoft and Amazon Web Services is already apparent, said Santos Garcia, president and founder of Inspire Data Systems, a Phoenix-based Microsoft Office 365 and SharePoint consultant.

Focusing on Office 365 and SharePoint has become much easier as customers move all or part of their operations to the cloud, Garcia told CRN.

"Now that SharePoint is in the cloud, we don't need to worry about on-premises," he said. "We just have to do development in the cloud."

Inspire Data Solutions has already made the move from traditional infrastructure business to focus on cloud applications, Garcia said.

"A lot of other companies are trying to manage on-premises hardware or develop applications that compete with Microsoft," he said. "Like Del Vecchio said, they will be left by the wayside."

Microsoft may not always be the best when it comes to the vendor's applications, Garcia said. "But Microsoft will go in cheaper, do a good job, and get better," he said.