Sean Jennings is the first vice president, Solutions Architecture at Virtustream.
There is no secret that most new industries are consolidating as they age, and the cloud business market is no exception. In recent years, mergers and acquisitions have made headlines as cloud vendors are fighting for a place in the relatively new and rapidly growing enterprise cloud market.
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According to Gartner, by 2016, most new spending, it will be in the cloud, so the choice behind acquisition targets clouds will be key for cloud providers seek to enhance their offerings.
The companies have become better at what they want from the cloud, putting pressure on suppliers of all types and sizes to provide the capabilities they require. If you think that the acquisition of a business (or to be acquired) will help you better serve your customers, secure new and stand out in the crowded cloud market, here are three rules to consider:
1. performance is king
If you are asking CIOs to make a list of the best characteristics they look for in a cloud provider, safety and costs are often cited first. None of these criteria are surprising.
In the wake of the NSA surveillance revelations, the sophistication of malware today and increasing threat landscape, all eyes are on capacity cloud providers business security and compliance. Policymakers are considering a transition to the cloud - especially in a corporate environment - are under enormous pressure to reduce costs while ensuring their business and customer data are protected.
Security and cost savings are extremely important attributes of an impact cloud - but are completely irrelevant if the service to end users and customers below. Smart companies - including outsourcing of savvy shops -. Performance SLAs also placed at the head of their list
If the mission critical applications of a company do not work well in the cloud, cost savings and security benefits are reduced and potentially canceled . Poor performance can have the same impact on the company as a denial of service. Consider the wasted resources if you acquire a company and need to re-architect its products to meet the new performance standards you scale investment.
Finally, priority performance is a key means to compete with the cloud gorilla 500 pounds, Amazon and IBM / soft layer because it is impossible to compete with these companies on price .
Consider cloud provider CenturyLink, which has made several acquisitions to strengthen its portfolio a little more impact than others. Understand that it needed to improve its performance to remain competitive, intelligently acquired Tier 3 last year to fill this gap.
2. The future is [hybrid] disorder
Gartner predicts that by 2017, half of the large companies will be operational on a hybrid cloud model. However, most large companies today using the cloud already have some sort of hybrid environment in place.
While some companies still feel compelled to be keeping some data on site, even companies that have been timid cloud, or only willing to use a private cloud in the past will probably open to a hybrid cloud in the near future.
One of the main barriers to the adoption of hybrid cloud is the lack of visibility for the CFO, CIO and IT management in cloud operations and spending. They need access to a "single window" or holistic view of all their assets and applications and the ability to deliver, manage, and migrate as needed between the Federated suppliers worldwide.
providers who can deliver on this will rise to the top of the heap. Providers that support hybrid will be well set themselves up for a healthy pipeline of income that their client companies move progressively more workloads on the side of the CSP hybrid environment.
Some of the major players are late in delivering strong hybrid cloud capabilities, including Amazon, a company crippled by custom work in its infrastructure that makes the transition between environments almost impossible. While the acquisition-hungry companies are looking to add hybrid capabilities focused on alignment, no currently hitting out of the park. Currently, the field is ripe for the taking.
3. Know your customers
One of the biggest traps companies fall in the acquisition is the purchase of a company well try to offer something for everyone. Instead, you must stay focused on your own target market and following the needs of your customers.
The companies with mission critical legacy applications architectures that have been developed over decades and which contain millions of lines of legacy code that leverage traditional persistent data stores (including SQL DB) need another service provider that companies born in the Web 2.0 era.
IBM is an excellent example to follow. IBM knows that he will never beat Amazon on the cost (and will someone else). So rather than trying to compete on price, it is doubling down on improving its competitive position in the company. IBM was looking for companies to clouds that bring specific types of innovation to the battery, such as application migration from legacy and enterprise level security.
HP, on the other hand, targets small businesses, and is more concerned to be able to offer a low cost, scalable server commodities.
Ultimately, it is impossible to be all things to all people with a cloud offering - even Amazon falls short when the support of big business. One size approach does not work, as companies and start-ups have radically different computing needs. But by acquiring strategically with an eye on these three rules, your enterprise cloud solution can be everything to someone.