Thoughts on the Cloud, IT Vendors and Enterprises

IT Vendors and Enterprises are in a middle of a generational change, as computing moves from On-Premise (from lots of customer data centers) to a smaller number of “super” Data Centers of IT Vendors: the Cloud.

This means that the IT as an Industry has caught up with other Network services e.g. Water or Electricity Networks where the production happens at the utility and else taps into the Network to consume the service. This allows taking advantage of the Economy of scale, commercialized labor leading to a better service at a lower price.

At the end of this change Enterprises will consume the data and IT from Utility Computing providers where all the complexity of running servers etc. is hidden behind a simple device such as the desktop Browser (similar to other Network providers using a water tap or power socket).

The Cloud provides all three layers: Applications (SaaS), Platform and Infrastructure as a service for consumption and more and more Enterprises are moving from buying on-Premise and Hardware to buying Cloud. This has been pioneered by Amazons.com’s AWS which provided basic computing services like storage and Servers in the beginning.

However, basic computing/storage (excl. Security and Reliability)has become a commodity like electricity. When buying commodities cost is one of the most important decision factors since there is no much differentiation. The major differentiation of Clouds is on the Platform and Application layer where the cost of these services can be looked at two days: the acquisition costs on day 1 or a more complex calculation of the TCO (Total Cost of Ownership) which is the cost of owning & running for a certain period of years. E.g. the TCO would also include estimated costs for the required integration of two or more Cloud applications.

A decade of Coexistence and a Unique differentiator for Oracle

For many of the Enterprise customers, the journey to the Cloud is increasingly combining on-Premise and Cloud Solutions and Oracles ability to promote a long term co-existence Strategy is a unique differentiator in the marketplace.

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