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Why private clouds will suffer a long, slow death

Bernard Golden | Aug. 16, 2016
While private cloud proponents have spent the last five years focusing on getting their IaaS offerings working, Amazon, Microsoft and Google have moved way beyond core computing services. And you don’t have to strain to hear the death knell sounding for the private cloud.

Private cloud is a concept propped up by legacy vendors desperate to provide enterprise IT groups a reason to keep buying their servers, storage, and network products, and that’s where the problem lies. It’s a solution in search of a problem. And not a very effective solution at that.

While private cloud proponents have spent the last five years focusing on getting their IaaS offerings working, the big three cloud providers have moved way beyond core computing services. They’re delivering the services IT groups will need in the future to keep their companies from being eaten by software.

Google, although its revenue is still small in comparison to AWS and Azure, offers an incredibly interesting machine learning set of services. I’ve worked with them, and they offer tremendous power at an affordable price, delivered in an easy-to-use framework. It’s clear we’re at the beginning of an AI-powered revolution, and Google is staking its claim to be the pioneer in the field, as demonstrated by its Deep Mind offering defeating the world’s champion Go player.

Microsoft is gearing up to make a big run at blockchain, with its Project Bletchley. I have written about Bletchley before, and it seems clear from what Microsoft has published that the company views blockchain as an enormous opportunity that will leverage Microsoft’s strength in middleware, cryptography and programming languages, not to mention its preeminent brand positioning, which will make companies getting started with blockchain initiatives comfortable working with a nascent technology. It’s early days for blockchain, but the technology holds the potential of restructuring a vast range of financial and governmental services.

Meanwhile, AWS has seemingly stumbled into being the hub of the smart home and workplace with its surprise hit, the Echo, powered by AI agent Alexa. Users can create and share Alexa skills by tying it into APIs front-ending external products and services, as in this video showing how one guy wired up Echo to his Tesla, automating the process of starting the car and backing it out of the garage.

What all of these offerings have in common is that they sit on top of cloud computing, but they are not IaaS services. The cloud providers are using IaaS to build the services that lie at the heart of the future of enterprise IT.

There are three elements regarding these services that are key to why they sound the death knell of the private cloud:

  1. Innovation. The cloud providers hire smart, really smart people and set them to solve interesting challenges. Supporting these people financially and placing them in organizations where they’re constantly exploring interesting problems means that the cloud providers create new functionality that legacy vendors with a private cloud could never discover the need for — and wouldn’t be able to create even if they understood the need.
  2. Scale. Machine learning is famous for needing massive data sets to train against. Having massive user bases solves the problem obtaining these data sets. Likewise, operating these higher-level services requires huge server fleets, well beyond the scale any single enterprise could hope to assemble.
  3. Network effects. By supporting lots of different data inputs and customer use cases, these cloud providers enrich their offerings. In essence, by providing your idiosyncratic needs, you help improve the quality of the services and define the need for new ones. These network effects are well beyond what one organization could possibly create within its own infrastructure.


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