How IBM Predicted the Dominance of the Hybrid Cloud Model

IBM leading hybrid cloud movement

About 8 months ago, when I spoke to IBM’s Cloud CTO Dr. Jim Comfort about IBM’s cloud initiatives, one of the things that struck me was the emphasis he placed on IBM’s strategy in the hybrid cloud space. His assertions of nearly a year ago are now increasingly becoming reality in a world where the entire cloud segment is growing at an extremely fast pace.

Even now, more often than not, when we talk about cloud we always talk about the public cloud and how the whole business world is moving towards it. But what we keep missing is the number of big enterprises that have chosen to retain their own infrastructure but at the same time exploit the scalability and flexibility of public cloud.

In short, companies that went the hybrid cloud route.

And Dr. Comfort’s – and, hence, IBM’s – focus on hybrid cloud was validated by the 2016 Future of Cloud Computing survey, conducted by North Bridge Growth Equity Venture Partners and research analyst firm Wikibon, which found that the hybrid cloud model is still the predominant strategy for most companies – at 47 percent, followed by purely public cloud use at 30 percent.

Here are a few excerpts from that interview that I’d like to share with you at this point because it’s more relevant now than ever before, especially in light of the emerging dominance of hybrid cloud over public cloud.

Jim Comfort on how SaaS-PaaS and IaaS are not three different things for a customer, and how the lines are being blurred

Jim Comfort: “It’s the ability to integrate across many environments – there’s no such thing as one cloud. And that’s what the whole Bluemix experience is about. It’s a PaaS (Platform-as-a-Service) but it’s also a set of tools, it’s a set of integration capabilities that makes it easier to discover and integrate APIs and create applications and run them.

We talk about building a single ID experience. If you want to work in infrastructure you can. You want to work with VMs, you can; or the platform or container level… so we’re blurring the boundaries between the pieces and where they come from. And then that upsell that we’ve developed is a choice within the single cloud experience.”

Why Hybrid Can Be Much Bigger than Public Cloud

Jim Comfort: Recognize another point: cloud things are still measured as large in the 1 to 10 billion range. The IT industry and enterprises that we serve, it’s an 800 billion to a trillion dollar industry. It’s a couple of orders of magnitude.

So this is why we talk about… the reality of the world is there will be things that exist that were created in the enterprise world that they’ve lived in that have to co-exist with, be integrated with, share data with or be a part of the overall cloud solution. Even though there’s a lot of attention on the cloud side: the fast-moving, the new mobile application and so on, it still has to talk to, share data and integrate with the rest of what’s going on in an enterprise. That’s what hybrid means.”

Shudeep Chandrasekhar: “Do you see that as an essential difference in paradigm between how IBM looks at its clients and how Microsoft or Amazon look at their clients?”

Jim Comfort: “I don’t think Microsoft sees it any differently. That’s why they’re doing Azure Stack. They recognize the need to integrate to the on-prem (on-premises) piece. I think that Amazon says everything should move to Amazon. I don’t think that all enterprises will agree – I think some will and some won’t. You see them making announcements with Ericsson on the local thing – they have partnerships with HP for integration to on-premise. I think they’ve chosen to focus only on the piece that they’re very, very good at, which makes sense. That’s not to say that that’s enough for enterprises. Again, how does the $1 to $10 billion become $800 to a trillion?”

Shudeep Chandrasekhar: “I’m interested in learning about any new services that are in the pipeline that are coming out in the next few months.”

Jim Comfort: “I don’t know that we forecast in quite that way but if you look at what we did through InterConnect, I’ll give you three examples and I think they’ll all expand. We’ve done a lot of work to bring the middleware estate to the cloud world in a more consumable fashion, making it easy to expose both our and anyone else’s capabilities as APIs, and to have those APIs discoverable – which makes them available for integration in Bluemix or other environments. That theme will continue: How much more can we do around what we call API Connect, which is the life-cycle management on the cloud side? That is a huge piece in the hybrid integration story.

Analytics – we have done a tremendous amount of introduction in analytics, around both traditional databases, around Spark and around emerging technologies in that space.

And then, of course, cognitive. We’ve been very aggressive in introducing more and more differentiation around Watson and Watson capabilities and making that more and more relevant to enterprises – and to more and more partners.

So analytics, cognitive and hybrid integration. And of course, the core services in tooling around containers – that’s another area where we continue to be very aggressive.”

IBM’s cloud growth is comparable to Microsoft’s or Amazon’s, all of which are growing at above the 50% level year-over-year every quarter. But IBM’s focus has always been on the hybrid cloud model, which is here to stay and that, too, with big ticket clients.

Newer and smaller companies do find it easier to shift entirely to cloud but the same cannot be said about companies like Citibank, J.P Morgan or Walmart, Tesco or Exxon Mobil and Chevron. These are large-scale enterprise companies that want to stay in control of their own infrastructure because they are accountable to very large groups of stakeholders. They may also have decades of archived data that’s not only expensive to move to a public cloud, but often unnecessary and most certainly time-consuming.

Such companies are not averse to cloud, per se, but they want the freedom to leverage just the parts of their business that will benefit from being on the cloud. If they can reduce latency for a particularly critical service, if an application requires greater computing power than they have in-house or if they need additional storage space until they expand their own capabilities, they’ll use the cloud.

But that model is out and out hybrid cloud, and one that IBM is fully equipped to exploit over the next several decades.

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