 | | | | Where The Cloud Is Raining Money | | October 23rd, 2015 / by Tom Krazit | This week, we'll talk about cloud profits, the continuing saga of Dell-EMC, and a (another) turning point for HP. | | | ARE PUBLIC CLOUDS REALLY SAFER THAN PRIVATE DATA CENTERS? |  We're less than a month away from Structure 2015, and the agenda is really rounding into shape. After outlining five of our top themes a few months ago, the good people at Fortune were kind enough to let me write a guest post for them on a particularly hot-button topic: security. Security has long been used as a scare tactic by legacy IT vendors hoping to deflect the public cloud, but in practice, the public cloud has actually proven more secure for a lot of users. But can that last forever as more and more business moves into public clouds and criminals start poking around? That's just a few of the security-related topics discussed in the post and scheduled for Structure 2015, so if you want a preview, pay Fortune a visit. | | | | INDUSTRY NEWS | | CLOUD EARNINGS: AMAZON'S BLOWOUT QUARTER, MICROSOFT DOUBLES AZURE GROWTH | The easiest way to judge the way the tech winds are blowing is to follow the money. Amazon Web Services posted an amazing 78 percent growth in revenue last quarter to reach the $2 billion mark, with operating income greater than the operating income generated by that pretty big online store Amazon also runs, as noted by Quartz. Microsoft isn't quite at that level, but it said Azure revenue doubled compared to last year, and Bloomberg reports that overall cloud revenue was the only segment that grew at Microsoft. EMC, VMWARE FORM CLOUD UNIT BUILT ON VIRTUSTREAM The post-Dell plans for the EMC Federation are starting to come into focus, although they remain committed to complication. As reported by ZDNet, EMC's Virtustream cloud unit will be spun out from the Dell-EMC conglomerate and combined with business units from both VMware and Dell and run as a joint venture between VMware and EMC, which will be part of Dell at some point. There are Russian novels that are easier to understand than this operating philosophy. AZURE CTO PLOTS THE FUTURE OF CLOUD BUILDING The Platform (which we are big fans of here at Structure) has a very detailed interview with Microsoft's Mark Russinocvich, CTO of Azure and arguably one of the most important people in the company in the Satya Nadella era. Russinovich talks about Microsoft's internal IT deployment strategy (it increasingly favors Azure, believe it or not), containers, and the mythical ARM server processor. IBM CEO PLEDGES TO STAY THE COURSE Does the elephant need to learn a new dance? Decades after Lou Gerstner re-invented IBM for a new generation, Ginny Rommety is having trouble replicating that turnaround, as evidenced by yet another disappointing earnings result this week and subsequent interrogation at The Wall Street Journal's (subscription required) WSJ Dive conference. Rommety wasn't dealt a great hand, but it's clear that AWS/Microsoft and other cloud providers are hurting Big Blue. DOCKER FILLS BIG HOLE WITH TUTUM ACQUISITION You know that a hot startup has really achieved escape velocity when it starts buying other startups. Docker acquired Tutum this week in order to boost a part of its story -- actually running those transformative containers -- that it has lacked until this point, according to Techcrunch. | | | | BIG PICTURE |  Has the market opportunity for the public cloud already closed? After HP decided to throw in the towel on its Helion public cloud this week, which is probably a mercy killing at this point, it's getting harder and harder to imagine that one of the legacy enterprise IT companies is going to be able to mount a true public cloud infrastructure service. Instead, the vanguards of a bygone era of IT appear to be retrenching on hybrid cloud approaches (which we think have promise) and private clouds (which, um…). By contrast, the new triumvirate of enterprise computing -- AWS, Microsoft, and, to some extent, Google -- are counting their money and smiling, as noted above. AWS, which owned this market for years, has actually increased its growth since Microsoft and Google committed themselves to tackling this market. Microsoft CEO Satya Nadella is beyond committed to the cloud as the future of Microsoft, and as Structure 2015 speaker Urs Holzle will tell us in a few weeks, so is Google. Personally, I think cloud advocates tend to get a little ahead of themselves when predicting the demise of old-school tech vendors at the hands of the upstarts. One of the original dinosaurs, Digital Equipment Corp., survived (somehow) into the late 1990s before it was absorbed into Compaq, and then later, somewhat amusingly, HP. We've talked at length about the conservative nature of IT customers and the ability of vendors to exploit lock-in for profits, and the HPs, Oracles, and IBMs of this world aren't going to go out of business this decade. (Please remember that I said this and feel free to torment me in late 2019 with this prediction.) But, as Bloomberg noted in the wake of the stunning earnings news this week, the power in enterprise technology has already shifted. Licensed software packages and server racks are going to be relics of the 20th century, the Palm Pilots and Zunes of an iPhone world. I think we'll look back at 2015 as the year the cloud went from oft-dismissed buzzword to the linchpin of a 21st century IT strategy. The conversations we're planning for Structure 2015 in November will be quite interesting. | | | | | | | | |  |
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