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Cloud Computing

Do You Agree With Gartner That A Fifth of Enterprises Will Hold No IT Assets by 2012?

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Gartner is quoted in this discussion as saying: A fifth of enterprises will hold no IT assets by 2012 as Cloud Computing and Virtualization practices become commonplace.  Do you agree?

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  • While the key jewels will stay behind the firewall for a while, there's no doubt that enterprises will move in a big way to "clouding" (pun somewhat intended) datacenter capital assets.

  • Even though it sounds provocative, it probably is quite possible that it'll prove to be true or much closer to plausibility than we might think. It depends on what Gartner counts as "enterprises" - if you includ SMB market, then it becomes quite possible.

    The mid-market and large enterprises will still run servers but they represent a small number by count.

  • That's a fairly extreme position. It would seem to take an opposing position to the view that technology can be used to create strategic and tactical market advantage unless publicly available resources can be highly customized.

    Historically, many companies have used technology to lead their industries. And, entire industries like BFS have created technology based products. It seems like there is far more innovation ahead of us than behind us. So, would it still be possible to use technology to lead an industry if the company held no IT assets?

  • Well, let's analyze this a bit more. As a far as a fifth of all companies I could agree because almost all startups and many of the smaller size companies are, as Anthony put it, “cloudingâ€? their IT assets. But that does not mean a fifth of ALL IT assets will be in the cloud. I think the fraction of all IT assets that are “cloudedâ€? will be significantly less than one fifth as most medium and large businesses as well as the Fed will be skeptical about “cloudingâ€? their IT assets for the foreseeable future. Do I hear someone say “privateâ€? cloud?

  • This is one of those instances where the highly optimistic side of my brain says, "Yes, of course 20% of enterprises will have ditched all of their IT assets within a couple of years." But then the rational side of my brain kicks in, and I think of all of the trouble that even my small business has had shuttering software assets (QuickBooks, anyone?), and attaining that 1/5 number within the next 18 months sounds like a number that was just plucked from the air for the sake of being provocative. Large enterprises are not going to be moving to an all-cloud model that quickly, the mid-market will be further along but not close to all-cloud, and the SMB segment will be on the verge...but not quite there. Again, the optimist in me is cringing as I write this, but I've been out in front of too many predictions over the past few years and realize that as far off as 2012 sounds, the real number is probably closer to 2014...at which time we'll see the hockey stick curve for "IT asset-less" enterprises go into effect.

  • I have no doubt that more and more people will find they move IT assets to the cloud, but I have to agree with Michael that the 5th number does seem to have been plucked out of the sky...

    I think there are a number of issues with cloud computing, some of which will make it very hard for the enterprise to move all of the IT to the cloud. I still feel that the real benefit of cloud computing is for the SME, not necessarily the very large organisations, that will no doubt find their cloud computing costs are far higher than they imagine when they look at all their IT based content .....

  • I too agree that the 20% figure is rather optimistic when examining the enterprise space. Take a look at how many large corporations are still forced to used the archaic "Internet Explorer 6" due to sizable investments outdated hardware and software.

    It's going to take more than a few success stories or articles like this to sway the giants to jump in feet first.

  • I believe "a fifth" is too optimistic. Although Cloud will be the direction most of the organizations go, attaining zero IT asset level will be hard to achieve. Cost justification to replace the fully depreciated hardware, justification of premature termination of the contracts with existing hosting providers, and general security concerns will be the major roadblocks.

  • I do not agree. My definition of IT assets is broader than IT Infrastructure assets. It also includes Applications, Processes, Services and Data. Almost every Enterprise will possess assets of these types even if they will be located in an External Cloud.
    Even if it is based upon a asset definition as Servers, I doubt if it is a realistic estimate for 2012, unless it is about the S of SMBs standing for small.
    Few days ago IBM acquired Cast Iron majored in Integration of Enterprises and Clouds. Reading my first take of this acquisition at http://avirosenthal.blogspot.com/2010/05/integrating-saas-ibms-cast-iron.html , may clarify my view.

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    As an IT manager in a big small non-IT business operation, I think that 2012 is probably too soon - but the financial pressures in small IT shops bring with them a multi-whammy: increased risk aversion, reduced ability to attract./retain qualified IT staff, less and less capital for investment and increasing demands for solutions.

    All of this plus increased complexity, hosting options, cloud options, and executive awareness of these options - are impelling small businesses to build extra-structure through hosted services, saas, and cloud computing (with partners) so that we can offer our organization reliable and evolving capabilities.....

    so 2012? I don't think so.

    20% without IT "backbone" infrastructure by 2015? You bet - we'd probably do it tomorrow if ...... but that's another story.

  • "A Fifth of Enterprises" and "Will Hold No IT Assets" - I think we need more qualifiers around these phrases. Just as they are, doesn't look plausible.

    Of all enterprises, we would need to rule out any enterprise that has been in existence for at least 2 years and holds IT Assets that process 50% plus of their business needs. That number is definitely going to be huge.

    And "holding no IT assets" is the real problematic phrase. In order for a company to leverage 100% externally owned IT Assets, that's a major leap of faith! Do we assume that the front end desktops, laptops, communication network, email infrastructure to more critical and central business infrastructure based on IT - would all be externalized, I think we're asking for too much if we consider all enterprises without qualifiers.

    If we say, out of all the companies that may get formed in the next 2 years, 20% may end up not owning any IT assets, that may be possible.

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    Enterprise level customers would not go in for cloud computing out side their Data centers, they would only go for flexible private clouds. This is a typical analogy for what we had said before for Application Service Provider models earlier which never became a reality in general.

    May be some data centers are shared by some related sister companies.

  • That really depends on two things. First, what do you call an enterprise? Second, that you do not consider the access device as IT. If you go to SMB, down to 1 person companies, then Gartner is surely right. But the companies that do not use IT will be the low end SMB's and start-ups, no large enterprise will go that way in the forseable future.

  • I agree if it is 20% of all businesses and that would mean only small businesses. Just a question: is the PC or iPad that they will use is regarded as IT asset?

  • For such a prediction, 2012 is too close, and it doesn't seem plausible. But a few years out, it's not too far-fetched to imagine all those small companies and startups out there (at least 20% of the total) running without a formal IT department. As others have said, it's not clear if PCs or devices are part of this prediction. Gartner seems to be saying that in one out of five cases, IT infrastructure will go to the cloud, and client devices will be the personal property that end-users bring to work. But the pendulum is always swinging in this industry.

  • I think that while the idea has some attractions it is not feasible with the current 'cloud' supporting infrastructure.

    In most of these discussions people seem to forget the corporate demand for bandwidth. So called 'cloud' computing has a greater proportion of shared bandwidth providing infrastructure. That is where many of the cost savings come from. The problem is that the carriers do not have sufficient capacity to support such a large demand.

    Secondly, there is an increasing regulatory requirement for confidentiality and segmentation at a physical level. This imposes commercial constraints that no amount of theory is likely to overcome. For example a PCI audit extends to those areas of the infrastructure that carry qualifying data. If such systems were clouded then the audit would extend considerably with consequent costs. Of course that is a simplistic view but the impact should be clear.

    A further point is that most businesses like to control their own systems and data. It is accountants who seem to get excited at third party and outsourcing / offshoring and regardless of the reasons for such arrangements it is the owner of the information and not necessarily the owner of the system it is on who owns the risks. Risk ownership cannot be transferred - only responsibility for its mitigation. However the accountability to ensure that it is mitigated remains with the owner of the risk. Clouding just complicates that.

  • With due respect to Gartner, a statement like this dosen't give enough of a clue about its validity. We need to understand Gartner's qualifiers and research data available to provide a view.

  • OK, I know I'm late to this party, but while I tend to agree with most of the other commenters that 20% by 2012 is too short a window, I do go back to an idea that I had in a blog post last summer which was "Who will be the first to offer cash for infrastructure".

    The concept was that cloud providers should be offering trade-ins on existing IT assets as an incentive to move to the Cloud (even in the form of credits for computing resources). Since the Cloud business is subscription by nature, it should be worth it for Cloud providers to incur short term costs to acquire long-term customers.

    Now if anyone takes me up on my idea, it's quite possible that businesses, especially SMB's with equipment nearing retirement age might accelerate their adoption of Cloud Computing and make Gartner's prediction not sound quite so crazy.

  • Agree on the statement though not on the timeline. Already a lot of mid sized businesses are going completely serverless. Whether that percentage will rise to 20 in the next 2 years is a question only time can answer.

    What I see happening is a lot of focused effort from platform vendors to make cloud technically, and from a business sense, more relevant to the SMB space which could drive trends like these.

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