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Cloud Computing: Winners and Losers of 2009

Cloud Computing: Winners and Losers of 2009

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Published by Krish
This research brief looks at what some of the vendors of cloud computing have done in 2009.
This research brief looks at what some of the vendors of cloud computing have done in 2009.

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Published by: Krish on Jan 01, 2010
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Cloud Computing: Winners and Losers of 2009
Krishnan Subramanian, Researcher and Analyst, www.krishworld.com
As we are winding down the year 2009, it is time to look back and take stock on some of thewinners and losers this year in the field of cloud infrastructure and platform market. Before Iproceed further in this brief report, I would like to make the following disclaimer. This analysisis not based on any new releases or new features offered this year and may as well be aboutthe repositioning or evolution of the vendors in the marketplace. The conclusions made in thisresearch brief are not based on any scientific methodology and it may include my personal bias.These conclusions are more about how I feel about certain vendors and their offerings thanabout their market positions.
Winners in 2009Amazon Web Services:
The biggest winner is Amazon Web Services. Well, they may nothave cracked the enterprise markets just yet. They may not have adopted open standards oreven be part of any serious standards process right now. But, they have consistently innovatedin this space taking baby steps towards the market domination. No, I am not saying they arethe clear market leader. I still feel the market is in the early stages and the winner will not bedecided anytime soon. But they have positioned themselves in such a way that they currentlylead the pack in the marketplace, by forcing everyone else, including the giants like IBM,Microsoft, etc., to do the catching up. When everyone was whining about their prices, theymoved in with the reserved instance pricing to make them competitive with the traditionalhosting providers. When it appeared that Microsoft might indulge in a pricing war with them,they not only cut their prices to make them more attractive, they also opened up an entirelynew marketplace called Spot Instances (right now monopolized by Amazon itself) which couldpotentially reshape the cloud economics in the future. In spite of the fact that Amazon is an oldhorse from the dot com generation, they are moving fast like a startup. This agility is keepingthem well ahead of other players in this category and, even, forcing some vendors towards apossible "loser" tag.In spite of all the momentum on the side of Amazon, they still couldn't crack the enterprisemarketplace. Their attempt to attract enterprises with Virtual Private Cloud offering didn'tmanage to break the traditional enterprise inertia and the uneasiness towards the security of cloud computing. Even though some pundits expect 2010 to be the year when Amazon will crackthe enterprise space, I am not optimistic about it. It will be 2011 or 2012 before they could getsome traction on the enterprise side. Let us not forget that for enterprises, economics is justone of the many factors.
Losers in 2009
I will talk about some of the vendors whom I consider as losers, either they have lost the gameor facing big troubles right now. Once again, I want to emphasize that these are my perceptionsabout their market positions and not analysis based on any scientific methods. Having mademy disclaimer clear, I want to talk about the three companies that hasn't lived up to the initialexpectations.
Sun Microsystems:
Of all the "giants" trying to position themselves as Cloud players, SunMicrosystems can be considered as the biggest loser. They started off the year on a verypromising note with soundbites about their plans to offer a public cloud similar to Amazon WebServices but much more "open" than Amazon Web Services. Their briefings excited many of thepundits in the cloud blogosphere. Then, Oracle announced their plans to acquire SunMicrosystems and everything went quiet on their side. But, as late as April, they assured thateverything is on track with their cloud strategy. However, by June, we started hearing abouthow they have put their plans on hold in order to reprioritize their strategy. Since then, wehaven't heard anything significant from them except some really good whitepapers on cloudsecurity, usecases, etc.. Even though it is too early to write them off, I think they have lost it.
The Oracle's acquisition of Sun Microsystems doesn't appear to bode well for their cloudcomputing plans even though some people I spoke to after the announcement of the mergerare confident about Sun's cloudy future.
Even though some of the pundits were not so sure of GoGrid's ability to crack the IaaSmarket, I was pretty excited about them because they made some right moves early on. Theyoffered free load balancing even before some in the AWS team heard about the term. If mymemory is correct, they are the first ones to offer what we now call as Virtual Data Centers.More importantly, thanks to the then CTO Randy Bias, they offered their API specificationsunder creative commons license, thereby, empowering their clients and ecosystem players. Inspite of all these right moves, their market position is still very weak and I am not seeinganything to suggest that it can be turn around quickly. I also feel that Rackspace's entry in thefield has affected their position as an Amazon alternative.
Bungee Connect:
This PaaS provider started off with very high expectations from the punditsand, at that time, it appeared that they are going to revolutionalize the way we develop andintegrate applications on the enterprise side. In fact, they can be called as one of the earlyPaaS pioneers. Ever since the early buzz, I haven't come across any news/information thatreally excited me. Even though I am making a guess here, I think Bungee Connect can betagged as a "loser".These are some of the vendors whom I thought were going to stir up the marketplace but loststeam on the way and, possibly, going towards a big thud. All three of them can still turnaround and make big but their journey is going to be really difficult. Even though the emotionalside of my brain wants them to win, the rational side tells me that they have lost theopportunity.
Neither Winners Nor Losers in 2009
After talking about the winners and losers of 2009, let me briefly talk about some of the cloudcomputing providers who are neither the winners nor the losers in the year 2009. The fortunesof these companies could go either way based on various market conditions, their strategies,execution, etc..
The winner of the previous desktop computing era is struggling hard in this era of cloud computing. Well, they are not struggling hard in terms of their cloud offerings. Aftertrying to resist cloud computing initially and dismissing it as a non starter, they came around tooffer a compelling set of services that has the potential to get the enterprises excited. There isno doubt about the market potential for their Azure based services but I have placed them inthe neutral category for entirely different reasons. This only happens to very few companies inthis world. Their success in the cloud era is directly dependent on the loss of their existing cashcow. The issue is not about whether Microsoft can win the cloud game. If they go all out in themarket, they will definitely emerge as a winner. The issue is about how they can win the cloudgame while killing the products that are currently filling up their coffers. The very success orfailure of Microsoft in the cloud era depends on how they are going to manage this situation.Remember, Microsoft has too much fat in terms of employee number to be agile in the cloudera. Trimming this fat will put a dent on the employee morale and will make Microsoftunattractive for younger talents. This, in turn, will make it difficult for Microsoft to innovate inthe fast moving cloud marketplace. Already, people are talking about whether the old age of Microsoft employees are affecting their ability to innovate. This is a tricky situation and thevery success of Microsoft is dependent on how they overcome this dilemma. On the SaaS OfficeSuite side, Microsoft is clearly going to end up on the losing side as they cannot fight the freeofferings from Google and Zoho (disclaimer: Zoho is an exclusive sponsor of Cloud Ave, a blogwhere I am a contributor).
Joyent has been offering infrastructure for web applications even before many of usheard the term cloud computing. To defend themselves against the onslaught of what we nowcall as cloud economics, from players like Amazon Web Services, Joyent repositionedthemselves by offering highly optimized vertical offerings like MySql Accelerator along withothers like Cloud Control and Joyent Smart Platform. At one point, it appeared that Joyent can

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