NexGen Cloud: Cloud Is Still A Gold Rush

Glenn O'Donnell, research director at Forrester Research, delivered the opening keynote of the NexGen Cloud Conference on Tuesday, telling a roomful of channel executives that the IT business is changing so dramatically that in a couple years, it’s not ’going to look like what we’ve known it to be.’

Its cloud that’s driving the transformation, he said, and cloud is still a gold rush.

’You got to stop fighting cloud,’ O’Donnell said. ’People out there fighting cloud are going to lose.’

[Related: NexGen Cloud Speakers: How Partners Can Win In The Cloud]

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O’Donnell told the solution providers gathered in San Diego for the event -- sponsored by CRN's parent, The Channel Company -- that their job "is to put some indemnification in front of cloud services," O'Donnell said.

Cambridge, Mass.-based Forrester's research shows that many potential customers still find security a hang-up, fearful of putting their data "somewhere else." Solution providers can thrive by helping those businesses understand that major cloud providers have unparalleled expertise in implementing security, O'Donnell said.

While they can do much to add a level of trust to cloud offerings, solution providers should be careful about what they promise customers, he said.

SLAs are a slippery slope with the cloud, O'Donnell said, because providers are wary of offering uptime guarantees as they can't control the network connection between their infrastructure and the end user.

O'Donnell also told attendees that the cloud has already been saturated with systems of engagement -- the sexy front-end business applications that are frequently modernized.

But the systems of record that power the back office are a different story -- they typically have much longer life cycles and slower refresh rates.

Many systems of record built on outdated technologies are still humming along in production, with little penetration into the cloud. They present solution providers with a significant opportunity to drive migration business, O'Donnell said.

Solution providers must accept wholeheartedly that their industry is one that is constantly changing, O'Donnell said, bluntly telling attendees that if they don't like change, they shouldn't be involved in IT.

And in an IT environment that is increasingly software-defined, the product builder of yesteryear is becoming a software designer, O'Donnell said.

"If you're not writing code today, start," O'Donnell advised attendees. That includes code to manipulate underlying infrastructure as well as application development, he said.

In addition to programming chops, solution providers need to adopt high-speed, agile development thinking for continuous software delivery, rather than sporadic development, he said.

Jason Wilcox, chief information of Chess Inc. -- an IT consultant based in Denver that focuses on small businesses -- and a self-described "research junky," said he found that the data O'Donnell presented dovetails nicely with what he's seeing from his own customer base.

"Our biggest issue with our customers is security. That's probably our largest revenue growth opportunity right now," said Wilcox.

Informed users understand that cloud providers do security well, he said. But they also realize that migrating to the cloud, and launching complex hybrid environments, means their security footprints will get a lot larger.

"That's the concern," Wilcox told CRN. "[There are a] crazy number of entry points and number of security problems that have grown."

Chess works with a lot of schools, many of which have gone from managing 100 devices to managing thousands, Wilcox said.

Through those academic engagements, Wilcox has been encouraged to see how much software development education is taking place in the classroom.

"There's going to be a need for it," he said. "We're bringing in software developers of our own and we never did that before."

Chess started hiring programmers about 18 months ago in an effort to build tailored applications that bundle the company's own intellectual property with the cloud services it sells.

"It's massively important," Wilcox said. While Chess sells components like Office 365, Microsoft Azure and Amazon Web Services infrastructure, and security products from leading vendors, "we want some of that to be ourselves."

In his keynote, O'Donnell assessed the public cloud industry, noting that the four hyper-scale providers that stand out are Microsoft, Amazon, IBM and Google.

While there are many other providers with lesser shares of the market, competition down market is getting more heated, and an increasing amount of business is going to that handful of top-tier providers.

While AWS and Azure are well ahead of the pack, the other hyper-scale contenders shouldn’t be underestimated, he said.

IBM is "doing good things" with its SoftLayer public cloud and BlueMix Platform-as-a-Service product, according to O'Donnell.

"Google in the past hasn't understood enterprise very well because they've believed everyone should do things like Google," he said.

But that's changing, and with the recent hire of VMware co-founder Diane Greene, "we believe Google is a major force," O'Donnell said.