Profiting in a multi-cloud world

Posted by Mike Vizard on Aug 16, 2016 9:43:32 AM

multi-cloud.pngWhen it comes to competition in the era of the cloud, it’s increasingly apparent that one size will not fit all — not even for a single customer. An IT organization may very well decide to run one class of application workload on one cloud and then in the next breath decide to deploy another type of workload on an entirely different platform.

In fact, this week Workday made it clear that employing multiple clouds is now the new normal. While the provider of software-as-a-service (SaaS) applications will continue to use Amazon Web Services to host its production applications, Workday revealed that it will be using the IBM SoftLayer cloud to host its application development and testing environments. Terms of the seven-year deal were not released, but for IBM any win of this scale in the cloud against AWS is significant.

From IBM’s perspective, partnering with Workday provides multiple benefits. Via the IBM SoftLayer cloud, IBM will surely seek to expose Workday developers to the IBM Watson platform to add cognitive computing capabilities to, for example, a human resources application. At the same time, IBM is naturally hoping that many of those Workday applications will find their way on to the IBM SoftLayer cloud when they are finally deployed in production.

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Of course, this all assumes Workday survives. Competition from both Oracle and SAP in particular has increased dramatically all across the SaaS category. Following the acquisition of NetSuite by Oracle, speculation about the long-term viability of any SaaS application provider is now rampant.

It’s even within the realm of possibility that IBM might one day acquire Workday to further its own cloud ambitions. IBM already moved to acquire Meortix, a provider of IT services that specialized in Workday deployment. What's at issue is how profitable any one of these SaaS application providers can be ultimately be given the costs associated with first signing and then renewing multi-year contracts.

Benefits of spreading out workloads

In the meantime, the DevOps process that Workday will use to bridge the gap between its application development and production environments isn’t likely to be any more complex than developing applications in a cloud and then deploying them on premise. Other IT organizations are likely to take note of the fact that multiple clouds will soon be routinely used first to develop applications and then possibly to host them elsewhere.

Rather than putting all their eggs in one cloud basket, both independent software vendors (ISVs) and internal IT organizations want to keep their options open if for no other reason than to make sure healthy competition between cloud service providers continues to endure. The rate at which price cuts have been applied to core cloud services has slowed considerably.

Spreading workloads across AWS, Microsoft Azure, IBM SoftLayer, Google, and other cloud service providers enables those organizations to force concessions. Over time, that may wind up increasing their integration costs. But for now at least, pitting cloud service providers against one another creates a critical governor for controlling cloud costs.

IT services providers, of course, benefit from this approach in multiple ways, starting with an increase in the number of integration projects and followed by more demand for managed services expertise all across the cloud spectrum. In fact, at this juncture every deal that AWS loses to another cloud service provider could wind up benefiting IT service providers the most. The rise of multi-cloud computing may turn out to be the best thing that has happened to IT service providers in a very long time indeed.

Intronis blog

Topics: Cloud Trends

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