From 451’s report on Google Next:
Google believes that a hybrid architecture will persist in the coming years as enterprises continue to migrate workloads to various clouds. Its hybrid cloud architecture revolves around its virtual private cloud. Google VPC is an instantiation of GCP that can dedicate compute, storage and network resources to an enterprise. It is built upon Google’s proprietary private global network designed for high reliability, low latency and hardened security. Kubernetes acts as the orchestration and operational backplane for hybrid implementations. Elasticity and scale are achieved by linking to Google public cloud services.
It also has many numbers on market-share, SI/channel development, and geographic foot-print.
Source: Google Cloud Next 2017: Slow and steady race to greater enterprise public cloud adoption
Earlier this month I did a webinar with Nick at 451. He does a great job summarizing all the digital hoopla going around and I finish up with, predictably, why and how Pivotal can help out there, along with a few customer examples. Check it out!
From William Fellows at 451:
> AWS Managed Services (AMS) includes change management, provisioning and configuration management, event and incident management, security management, patch management, continuity management (backup/restore), and reporting, supported via APIs and AWS services. AWS Managed Services infrastructure building blocks include managed VPC within a specific AWS region; isolation of applications via subnets and security groups; shared services, such as authentication, collaboration and intranet; DMZ access to the internet; and DirectConnect for internal connectivity and access management via corporate AD/Auth systems versus native IAM. (AWS says IAM does not work for the data plane, and is only for the AWS control plane. It uses IAM for the AWS components – the customer can also do an ADFS-to-IAM integration to use their AD credentials for control/data plane access.)
Source: ITIL for cloud: AWS reaches for the soul of the enterprise
From Jay Lyman:
Mesosphere says it is adding enterprise customers and building up deal sizes. The company has also grown its number of employees to 200, up from 150 in March. Mesosphere declined to comment, but 451 Research estimates its annual revenue is in the $25m range.”
And, from a recent survey on container usage:
Our Voice of the Enterprise (VotE) Software-Defined Infrastructure, Workloads and Key Projects survey, conducted in April and May, indicates that out of 718 enterprise IT decision-makers polled 23.7% have implemented containers. By comparison, 25.1% have implemented Software-Defined Networking, 26.7% have implemented Software-Defined Storage and 92.9% have implemented server virtualization.
Source: Mesosphere rises where containers and big data come together in the enterprise
451 Research estimated this week the application container segment reached a robust $762 million in 2016 and is forecast to grow at a 40-percent compound rate over the next four years to $2.7 billion.
And, on usage, from an April/May 2016 survey:
451 Research’s Voice of the Enterprise: Software-Defined Infrastructure Workloads and Key Projects survey conducted in April and May 2016 showed that of the roughly 25% of enterprises we surveyed who use containers, 34% were in broad implementation of production applications and 28% had begun initial implementation of production applications with containers.
I’m somewhat suspicious that there’s $762m in container software and services sales, but who knows, really?
I haven’t read through their entire cloud enabling technologies market sizing yet, from Dec 2016, (basically, private cloud software and services, any things used by *aaS vendors, not the actual public cloud services, which are another market) , which is more than just containers. That market is pegged at $23bn in 2016, going to $39bn in 2020:
More on 451’s blog.
Source: “Container Market Pegged at $2.7B by 2020”
As represented with the star in the map above, according to CPI data, at labor efficiency of 1,000 VMs per engineer and 66% utilization, these enterprises are poised to beat public cloud on price regardless of whether they use a commercial orchestration software package, an OpenStack distribution or the OpenStack source.
And, on IaaS pricing:
But price still does matter: In a 451 Research custom study commissioned by Microsoft earlier this year, the biggest reason to change primary provider was price, cited by 34% of respondents. Consumers don’t necessarily want the cheapest cloud service, but they don’t want to feel ripped off. If there is a cheaper option elsewhere, it appears end users will take it into consideration.
Announcements on price cuts gather attention, and are a great publicity and discussion tool for service providers. We think cloud prices will continue to come down through 2017, and may spread beyond virtual machines into object storage, and perhaps even databases – virtual machines came down 7% globally in 2015, but the cost of our small application only came down 2.4%. The fact that margins are still healthy suggests providers aren’t sacrificing huge amounts of gross margin to give such cuts. If they are, it might be a few nickels and dimes here and there, but it’s more likely that they are reducing costs through better procurement and management. If we are in a cloud price war, we’ve yet to see it really get off the ground.
And, see more commentary on the topic of IaaS pricing.
Source: Cloud gross margins: The price war has yet to really kick off
Investors are betting 2017 will be better. Renaissance Capital pointed out that the average total return of I.P.O.s in 2016 reached 23 percent, a sharp reversal from the negative 2.1 percent return of 2015 offerings and surpassing the 21 percent return of two years ago.
So says a startup IPO wrap-up from Meanwhile, in the enterprise tech space, Brenon over at 451 reviews 2016:
The number of enterprise-focused companies that have set sail to Wall Street this year is once again mired in the single digits. That’s a disappointment given the abundant IPO-ready tech vendors and a bullish investor base that has pushed the broader US equity market to record levels in 2016.
By our count, just eight enterprise tech firms have made it public on the two major US exchanges so far this year, matching the total from 2015.
||Date of offering
||April 22, 2016
||June 23, 2016
||July 29, 2016
||September 23, 2016
||September 30, 2016
||October 10, 2016
||October 28, 2016
||October 28, 2016
But, the reason isn’t a lack of exits, there’s been much M&A in tech this past year, as Scott says:
Total M&A spending on infrastructure management jumped 57% to $15.2bn, with the volume of transactions rising to 152 from 146 as we near the end of 2016.
There are some big chunks in there – like the weirdly structured HP/MicroFocus deal for HP’s Software and cloud software groups which was $8.8bn, but left HP owning 51% of the combined company…so whatever you call that kind of deal.
It’s be even more helpful to see what the profits/returns on these deal were. Brenon has this on those eight tech IPOs:
The valuation of these acquisitions underscores the fact that December dealmaking has featured more ‘value’ than ‘growth’ strategies. All five of this month’s biggest deals have gone off at less than 4.4 times trailing sales, which is the average multiple for the 50 largest transactions announced overall in 2016, according to the M&A KnowledgeBase. On average, buyers in December have paid 3.3x trailing sales, a full turn lower than they did in the previous months of the year.
From Al’s report on the recent OpenStack Summit:
Based on a 451 Research Advisors survey of midsize and large enterprises, increasing operational efficiency and accelerating innovation/deployment speed are top business drivers for enterprise adoption of OpenStack, at 76% and 75%, respectively. Supporting DevOps is a close second, at 69%. Reducing cost and standardizing on OpenStack APIs were next, at 50% and 45%, respectively. The survey further shows diversity in vertical markets using OpenStack, with 80% of respondents being outside the tech industry.
The latest biannual release of OpenStack is Newton, and the community supporting it also shows diversity among the contributors. As of this 14th release, there are 64,549 community members from 187 countries, up from 50,000 six months ago. There are also 643 supporting companies, up from 578 for the same period. Newton also had a record number of developers contribute to the code: 2,581, versus 15 in the first release.
Source: OpenStack: the Sagrada Familia of cloud software?
Google is able to automatically reward end users a discount for loyalty through a sustained-use pricing scheme – the company claims its method for high utilization means reservations do not hugely benefit them, and so it would rather reward users for loyalty rather than for paying up front and forecasting capacity. Google also offers a per-minute billing model (as opposed to per-hour offers from many providers), and this advantage can also be attributed in part to containers. However, as we show, the benefit of per-minute billing only becomes important when workloads are very bursty.
Source: Google economics: Containers are the key
Microsoft helping out ABB with some cloud ‘n’ IoT fun:
The most significant of these is a new alliance with Microsoft, whose Azure public cloud has been chosen to underpin ABB’s cloud, IoT and digital services across the ABB group. The companies will also work together on projects and services, although the extent of this will emerge over time. ABB also announced an internal reorganization and the appointment of a chief digital officer. All of these moves are part of ABB’s Next Level strategy, now in its third iteration, which sets out targets and priorities aimed at maintaining or increasing growth, profitability and value.
The agreement with Microsoft will help ABB offer cloud-based digital services across all its divisions. Functions such as monitoring, analytics, control, billing, forecasting, machine learning and many others will be delivered via applications and services hosted in Azure by Microsoft.
It has annual revenue of $35.4bn (2015) from operations in 100 countries, supplying switchgear, breakers, substations, generators, uninterruptible power supplies and power electronics, as well as management software.
Source: “ABB says the Next Level is digital, and Microsoft will help it get there”.