Both IBM and HP have made rather significant announcements.
Each announcement is interesting in its own way, and -- despite my obvious competitive biases -- I will try and share why I find each so interesting.
And I come away with a simple observation: clouds can easily confuse both customers and the vendors who serve them.
The Transformation Of The IT Industry?
Early on (2007?)) it was clear to many of us that this cloud thing was going to be far bigger than most might appreciate at the time.
IT was going to shift from being based on difficult-to-consume products to easy-to-consume services. Everyone in the industry was going to have to figure out what their new position was going to be, and how to get there -- hopefully without savaging their existing business model in the process.
As we sit here in 2012, it's rather obvious that every IT vendor, integrator, reseller, etc. has two positions -- the one they came from, and the one they're trying to achieve.
The pundits of the time weren't of much help, so we at EMC were left to our own perspectives. Our thinking eventually boiled down to a simple equation: what enterprises needed from IT really wasn't going to change all that much -- they still needed performance, availability, security, agility, and so on.
What was really going to change was how enterprises wanted to consume and deliver those IT capabilities.
As I reflect back, I think we at EMC were a bit smart -- and bit lucky. Smart in that we had a pretty good model of how the market would likely evolve, and able to clearly identify a handful of strategic dead ends to avoid. Lucky in that we had some great assets to build upon, and great customers and partners to talk to about how they were thinking about things.
And as I look at recent industry events, I remain more convinced than ever that we collectively have made very wise choices indeed.
Let's Start With IBM
Say what you will about IBM -- I see them as a formidable competitor worthy of great respect. That doesn't mean they always get everything right. Their strength lies in their breadth and diversity. It's also their downfall in many cases.
Under the brand of "SmartCloud", IBM herded many of their software assets to start to resemble the tools you'd need to run a cloud. IBM consulting now offers a reasonable set of professional services to do all the heavy lifting while you watch.
And, of course, the best destination for your workload is one of IBM's own data centers.
While I'll give them points for completeness, I've never thought of their offers as particularly compelling: either individually, or in aggregate. It seems so heavily biased to the traditional IBM way of doing things, and hardly transformational -- either for IBM or for the majority of their customers.
One notable IBM gap has been on the infrastructure and operations side: where was the pre-integrated "cloud-in-a-box" product that accelerated IT transformation? On paper, IBM has more than enough assets to build almost anything they want -- what would they settle on as their preferred approach for this important market category?
When we started to wrestle with this opportunity at EMC several years ago, we quickly realized we had to make some difficult choices.
We first realized we couldn't incorporate every aspect of our portfolio (or VMware's, or Cisco's) into the "private cloud product" -- we'd have to make some very hard choices about what was in, and what was out. One of the reasons I think the VCE Vblock is so successful is that it doesn't include the "kitchen sink" of all possible options -- choices are highly constrained.
If you work for a company that makes a lot of different (and sometimes competing) products, that's not a popular internal conversation.
We needed a team (actually, a free-standing company) that was completely focused on the opportunity at hand, and wasn't comprised of dozens of individual corporate stakeholders with slightly overlapping agendas.
Hence the formation of the VCE Company, and their product -- the Vblock.
The VCE/Vblock strategy has worked quite well so far, and shows every sign of accelerating. If you're close to this part of the market, there's only one word to describe its impact: disruptive.
Now we can fully appreciate IBM's new PureSystems announcement, which -- at first glance -- seems very Vblock-ish. In a nutshell, pre-integrated, pre-configured infrastructure aimed at rapid and simplified deployments. Take a page from the VCE playbook, and re-write it with IBM-speak. Throw in a little IBM wizards-behind-the-curtain magic-speak. That should work well for them, no?
For starters, IBM hasn't yet made the required hard choices when it comes to paring down the technology portfolio.
As one example, you'll have your choice of processor architecture: x86, or IBM's own POWER. You'll have several choices when it comes to hypervisors. And many, many more choices -- all from the IBM extended portfolio -- all of which are intended to be integrated (over time) into a seamless operational product.
With complexity comes cost -- a lot. That's true for everyone, including IBM.
IBM claims they've invested $2B around this effort. Given the breadth of diverse technology they intend to integrate, I'd offer they'll need probably 10x as much investment over time. And it's going to take time. A lot of time.
By comparison, VCE has been at this for a few years now, and has made some important -- and difficult -- choices around what they intend to integrate, and what they don't. Less complexity = less cost = more speed = deeper integration = more optimization around the task at hand = better results for everyone.
The strategic decision to "go simple" around technologies is an important yet difficult one. VCE went one way, IBM appears to be headed in another under the banner of "customer choice".
It's a stark comparison.
The second issue is structural. Most industry observers might miss this, but it's very important based on my observations -- it's the need to organize for success.
But IBM didn't make that choice. It looks like they simply put up some nice wallpaper over their existing complex and byzantine organizational structure.
And that's going to hurt them badly, as we'll see before long. By comparison, VCE has an organizational structure that gives them the freedom to focus and invest around the opportunity at hand. They're not directly beholden to the hundreds of corporate stakeholders at the parent companies.
IBM PureSystems has that decided "designed by committee" look to it.
The strategic focus at IBM appears to be different as well. When it comes to pre-packaged infrastructure, there are two distinct camps. One camp is clearly focused on "keep doing what you're doing today, just do it a little better". The second camp is "invest in fundamentally changing the way you do things, we're here to help".
I see IBM PureSystems as yet another embodiment of the first idea, and VCE Vblocks as an embodiment of the second.
What do I expect? A drumbeat of tech marketing for the next six months, supported by familiar IBM-friendly customers - the same names tend to show up frequently. And then it will sort of go quiet, and things won't have changed much.
Until IBM makes the hard choices, I don't think they'll have an effective response to the success of VCE and Vblocks. And I think many customers and partners will agree.
HP Does Cloud -- Again
I'm not going to pick on HP. They're a good company, and they're working their way through some tough times. I don't count them out.
The industry perception of HP's new Converged Cloud services is relatively easy to understand -- it's described in the popular press as a competitive IaaS (infrastructure as a service) response to the success of other established IaaS players -- Amazon AWS, Rackspace et. al.
But unless you have an appreciation for the scale of EDS's legacy outsourcing business -- for which HP paid a hefty price -- you might not appreciate the deeper motivations at work here.
Traditional outsourcers are now getting brutally savaged by easy-to-consume "enhanced IaaS" models: IaaS capabilities complemented by whatever migration and operational services are needed by the customer. The new offers are far more flexible (and less sticky) that those of a few years ago. As a result, the legacy parts of EDS (now HP) has to quickly learn a new way of doing business.
But I think the press missed it.
The real competition -- as I see it -- is the explosive success of CSC's BizCloud offering. CSC and EDS have long gone head-to-head around large outsourcing pursuits. My impression is that CSC is now kicking some major patootie by using an enhanced IaaS model that leverages their traditional strengths around a new consumption and engagement model
And, yes, CSC is a great EMC and VCE partner.
CSC made a strategic choice to focus their investment on changing the way they do business with their customers. HP has made a strategic choice to focus their investment on building an IaaS cloud.
We'll see which strategy ends up being more successful.
Where Does That Leave Us?
In times of rapid industry change, you can play offense or defense. Cloud represents rapid industry change in the IT sector.
If you've got a successful legacy IT business, there's a strong motivation to choose strategies that tend to preserve, defend and hopefully extend your existing legacy businesses vs. face the stark realities about how the world is changing around you.
As an IT vendor business stakeholder, you tend to sit in conference rooms with your peers and look at all the revenue you're getting today, and all the customers you've earned in the past.
You see the future as a linear extension of the past. You want to double down on the things that have worked in past years.
I can clearly see that line of thinking in play with the "cloud strategies" of *all* the traditional industry players: IBM, HP, Oracle, Microsoft et. al.
Or you can bet big on a new day.
You can work hard to create new ways of doing business with your customers and partners. You can focus on helping to fundamentally change the way your customers do IT vs. perpetuating traditional approaches.
You can invest in the new skills and certifications that will be needed. You can create compelling new use cases that aren't so burdened with taking 30 years of IT legacy forward. You can create a powerful ecosystem of aligned and compatible partners who share your vision.
And, if you're clever, you can grow your established businesses into this new world, and never miss a beat.
I consider myself lucky that I work for a company that has chosen the more aggressive path.