IT Choices for the Cloud
By Zhou Xiaohong, Senior Market Analyst, Market Insight Dept., Huawei IT Product Line
The enterprise cloud era has arrived and many companies have no choice but to join the bustling crowd. A primary driver for market growth, cloud technologies have already improved operational efficiency and provided their users with a competitive edge. The key to success in this market is in the ability to choose the right type of cloud — open or closed, public, private, or hybrid.
The global IT market reached US$1.1 trillion in 2013, with cloud services and infrastructure accounting for 10 percent of that. By 2018, that figure is expected to increase to 22 percent. Huawei and consulting firm Bain & Company estimate that, when the global IT market grows approximately 6 percent per year, 60 percent of that yearly growth will come from cloud-related purchases.
Given this phenomenal growth as a background, the question is not if to deploy cloud services, but how? The secret is choosing the right type of cloud for your business.
Open or Closed?
Closed cloud systems currently dominate the global IT market. Examples include the Amazon Web Services (AWS), and private architectures from VMware and Microsoft. After years of development, closed systems have built many advantages in the areas of functional integrity, system stability, and reliability, while securing healthy market shares and significant profits. But, there are problems.
AWS, a public cloud leader, maintains a large market share and has pioneered many advances. Customers questioning its closed ecosystem have complained AWS “kidnapped” them because numerous tools they developed on AWS-based public platforms cannot be migrated to other cloud platforms.
On the other hand, open source systems have begun to upset the dominance of the dominant closed systems. Representing the collective wisdom of hundreds of companies and thousands of developers, open systems can be quickly and iteratively developed at lower costs. Linux-Windows and MySQL-Oracle are good examples, and there are plenty of open source communities and projects such as the Open Compute Project (OCP), Kernel-based Virtual Machine (KVM), OpenStack, CloudStack, OpenNebula, Eucalyptus, and CloudFoundry, too.
Take the virtualization and cloud management fields as examples. After being plagued with high license fees from VMware, many large corporations expressed strong support for OpenStack, an open source platform. In 2014, Wells Fargo, Walt Disney, Sony, Bloomberg, and Fidelity Investments publicly announced plans to deploy OpenStack in the future.
Leading players in the IT industry have joined and are contributing to the OpenStack community with the aim of building a truly open cloud platform that is compatible with both underlying hardware and uppermost applications. OpenStack has become a de facto, standards-compliant platform, with wide recognition from enterprise IT staff and service providers.
According to 451Research’s report The OpenStack Pulse 2014, the global OpenStack market reached US$600 million in 2013 and will grow at a Compound Annual Growth Rate (CAGR) of 40 percent, with the possibility of hitting US$3.3 billion by 2018. A recent report on enterprises selecting cloud platforms jointly published by Huawei and Bain reveals that 18 percent select OpenStack, nearly on par with the VMware, the number two option, and only two percent lower than the number one preference, AWS.
So is an open or closed platform the best? After fully considering key elements such as cost-effectiveness, portability, ecosystem status, and custom development, Huawei believes that open cloud platforms appear to have the long-term edge over closed clouds.
Public, Private, or Hybrid?
In 2013, AWS reported annual revenue of US$3.3 billion. This remarkable business performance demonstrates the attraction of public clouds. The global public cloud service market reached US$48 billion in 2013, with a year-on-year increase of 29 percent. With features such as ease-of-use, pay-as-you-need, and high scalability, public clouds are clearly appealing to many companies.
However, virtualization, including server consolidation, virtual resource pools, automatic deployment, and self-service are popular with enterprise IT departments. IT systems behind enterprise firewalls are shifting from simple virtualization to private clouds.
While private clouds ensure secure and controllable data, public clouds are more economical and flexible. A hybrid cloud may be the ideal choice.
There are surveys that show hybrid clouds growing more popular than either private or public clouds, and that hybrid clouds are now the preferred model for enterprises, especially large ones.
According to Gartner’s report Public Cloud Services, Worldwide, 2014, hybrid clouds are expected to rise from 27 percent to 43 percent of the market between 2012 and 2016 to become the most common model.
In practical applications, enterprise IT departments select hybrid clouds for four typical scenarios:
•Fluctuating business demand and reluctance to invest heavily to meet peak demand.
•Requirement for strong development and testing support.
•Support for non-critical applications and data.
•Redundancy backup and disaster recovery.
Hybrid platforms must allow the free flow of data and on-demand migration of applications and Virtual Machines (VMs) across the private and public clouds, and must also provide centralized portal management, unified network settings, service scheduling, Service Level Agreements (SLAs), and security policies for both types of clouds to achieve a consistent experience.
More complex than simply using the private and public clouds simultaneously, companies that make the most of hybrid clouds set up a public platform that seamlessly spans both private and public clouds for central management.
For the enterprises that choose hybrid clouds, the challenges include balancing the operational advantages of private and public clouds against factors such as regulatory compliance, cost-effectiveness, and security. Choose right and your company will be ready to join the cloud era.