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Virtual Panel: VMworld 2017 Recap

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Yesterday, we hosted a Virtual Panel on VMworld 2017 talking about the news that came out of VMworld 2017 in Las Vegas last week. The panelists are:

  • John Allwright, Pivotal Inc
  • Rob Bissett, Virtustream
  • Scott Fulton, The New Stack
  • Bryan Friedman, Pivotal Inc
  • Krishnan Subramanian, Rishidot Research (Moderator)

We discussed many topics ranging from the recent cloud announcements by VMware, Multi Cloud Strategy, Pivotal Container Service, Enterprise use of Kubernetes and whether BOSH can emerge as a standard for infrastructure services orchestration. Watch the video below.

 

 

Pivotal Container Service – A Quick Analysis

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Yesterday, at VMworld 2017, Pivotal Inc announced Pivotal Container Service and a partnership with Google for Hybrid Cloud. Pivotal Container Service (PKS) is made available based on Kubo project which integrates Kubernetes with BOSH. The infrastructure orchestration plane for CloudFoundry. Pivotal Container Service if the commercial offering for Kubo and the partnership with Google will allow customers of Pivotal Container Service to use a hybrid environment between VMware infrastructure inside the data center and Google Container Engine (GKE) on the public cloud.

What it means for Pivotal

Pivotal CloudFoundry (PCF) has gained good enterprise traction in the past several years (which is reflected, in some sense, on the revenue claims made by Pivotal for the past few years). However, the momentum around Docker containers since 2014 and the momentum around Kubernetes project in the past two years are adding pressure on Pivotal as they march towards their rumored IPO. Pivotal CloudFoundry platform got their traction in the market due to the developer centric approach they took in building their platform. Even though Kubernetes has its operational roots, some of the developer centric platform offerings in the Kubernetes ecosystem, like Red Hat’s OpenShift and others, is creating competition to PCF in the market. Based on our conversations with enterprise decision makers and our conversations with vendors, it is pretty evident that Pivotal sales teams face questions about Kubernetes as they go into the market. Clearly, Pivotal needs a response to the Kubernetes story.

One way to compete is to highlight the technical strength of CloudFoundry platform against Kubernetes and find a way to sell into enterprise accounts. But the momentum in Kubernetes is too strong for Pivotal to spend their sales cycles fighting Kubernetes. A smarter move is to support Kubernetes and add a layer of abstraction to hide its complexities. This is exactly what Pivotal is trying to achieve with this announcement. The key thing to notice here is BOSH as the glue to Kubernetes world (more about it later).

What it means to VMware

Ever since public clouds pulled the rug from underneath VMware, they are struggling with a credible public cloud story. Finally, they are narrowing down on a hybrid cloud story with a multi-cloud component. Moreover, containers are turning out to be an Achilles heel in VMware’s cloud playbook. The reality facing VMware is to have a credible story involving public cloud and containers. In spite of recent announcements in VMworld, they are far away from having a credible story on this front. With Pivotal’s investment in BOSH and VMware’s efforts to build a credible hybrid story in the multi-cloud world, there is an opportunity in front of them. They have started with a partnership with AWS where VMware’s Cloud Foundation is available for customers to use. Let us cut the slack here and call out the customers who will benefit from this partnership. They are the existing VMware customers wanting to go the AWS route without much of disruption. If VMware has to gain interest in new customers who are doubling down on the cloud, they need to go much beyond v-services on AWS and other public cloud providers. They need to make vSphere the orchestration plane for infrastructure services (be it public or private). Selling multi-cloud infrastructure services is difficult because of the user experience problem with multi-cloud infrastructure. This becomes even more damning when VMware is not one of the public cloud providers in this multi-cloud world. This is where Pivotal’s investment on BOSH comes handy. If Pivotal, through their application platform route, can make BOSH the standard for orchestrating infrastructure services in the multi-cloud world, VMware with their v-services as front end can stay as a credible player attracting newer customers focussed on digital transformation.

What it means to Kubernetes

To be blunt, nothing. Kubernetes community doesn’t care how the software is packaged. Whether it is VMware or Red Hat or AWS or Microsoft or any of the startups in the community, all they care is about having Kubernetes in more places. But I am long arguing that Kubernetes is the Google’s trojan horse in the enterprise to eventually get the enterprise workloads on Google Cloud. This strategy is nothing new to Google. They successfully used Chromecast as the trojan horse to gain market share in the home media room market. It is a similar gameplay with the enterprises. Google doesn’t care who takes Kubernetes into enterprise data centers. All they care is to provide an easy on-ramp to Google Cloud in their competition against AWS and Azure. This partnership with Pivotal provides them another opportunity.

What it means to Enterprise Customers

If you are a satisfied VMware shop, your IT modernization story runs through VMware and you are well-taken care off. If you are a Pivotal customer, you just put a check against Kubernetes in the Modern Enterprise checklist. If you are a customer wondering what is right for you, here are your choices:

  • If you are ok to outsource your infrastructure decisions to Pivotal/VMware, betting on Pivotal is the way to go
  • If you prefer Pivotal’s approach to application platform against, say, OpenShift, this will help you with multi-cloud strategy
  • If you are not sure, we strongly recommend you do the homework on the acquisition costs, lock-in costs, training costs, etc. to make a decision. There are other multi-cloud platforms available in the market

In short, Pivotal’s offering is a credible path to a digital transformation involving a multi-cloud story but it is important for you to decide if you want BOSH to be your multi-cloud orchestration engine.

Virtual Panel on VMworld: We are hosting a Virtual panel to discuss the announcements at VMworld on Tuesday, Sept 5th 2017 at 11 AM PST. You can watch it live here.

Briefing Notes: Oracle IaaS

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Oracle announced their IaaS offering late last year and they briefed analysts of their offerings and roadmap. Rishidot Research makes a quick analysis of the briefing to highlight our clients and readers on the status of Oracle IaaS offering from our vantage point.

Market Overview

Ever since Amazon announced public cloud infrastructure services, the IaaS market has been growing steadily with increased enterprise adoption in the past 3 years. Amazon Web Services is leading the pack with annual revenue of close to $13 Billion as per the latest financial results. After some initial missteps, Microsoft is investing heavily on Azure making them a credible competitor to Amazon. Google Cloud and IBM Cloud are the distant 3rd and 4th place vendors in the public cloud infrastructure landscape. In spite of the threat for lock-in and open source efforts to enable a federated market place for cloud infrastructure providers, public cloud infrastructure market is tending towards oligarchy with Amazon, Microsoft, Azure and IBM as key players. After a delay, Oracle is finally taking steps to enter public cloud infrastructure market (IaaS).

Oracle IaaS

Oracle is betting their IaaS on three factors that may be attractive for enterprise customers, performance, security/governance and lower cost than AWS. When it is compared with Oracle’s SaaS and other products, they can easily become the one throat to choke for enterprise customers. The performance and security claim comes from the fact that their IaaS is built with bare metal servers as building blocks and they are hoping that the physical isolation provided by bare metal servers will be attractive to enterprises worried about cloud multi-tenancy. With their marketing on better performance provided by bare metal servers, Oracle is betting on enterprises wanting to forklift legacy applications to cloud. The bare metal performance advantage becomes less important for cloud native applications unless it is in the niche area of HPC workloads but when you forklift legacy applications to cloud (an approach Rishidot Research strongly discourages but many enterprises are faced with situations where they cannot move some of their mission critical applications to cloud native architectures), compute and network performance matters. Oracle IaaS is pushing ahead with their marketing on better performance than other public clouds (an independent verification on this claims is needed at this point) and hoping that their enterprise customers will prefer Oracle IaaS over AWS or Azure. The cost advantage and governance are not big differentiators as it is easy for competitors to close the cost loop and many higher order services (including 3rd party services) can provide the necessary tools for governance.

SWOT Analysis

Strength

  • Oracle has the enterprise market power and they can leverage that position to push Oracle IaaS to their enterprise customers. This will clearly stem the bleeding that is happening as enterprises wanting to move to cloud look towards AWS or Azure for their cloud needs. With Oracle IaaS, offering a cheaper price (at least in the short term), can be a good carrot to dangle in front of their existing customers. If Oracle can get to $1 Billion in IaaS revenue by the end of 2017, I can confidently say that their enterprise cloud strategy is on a strong footing
  • With bare metal IaaS, they can easily target diverse workloads including high performance, virtualized and containerized
  • There have the necessary financial muscle to do whatever it takes to compete with AWS and Azure
  • Having a strong SaaS portfolio helps gain traction for custom apps on their cloud

Weakness

  • Lack of higher order services on top of Oracle IaaS is definitely a problem. Without these services, it is difficult to get developers to use Oracle IaaS for their needs. They definitely have a database service that will be useful in the enterprise app dev segment but not enough to make a play in the public cloud market. AWS, Azure and Google Cloud all have a good set of services developers can tap and it is critical for any IaaS platform to not just succeed but also to lock in their users
  • The delay in entering the public cloud infrastructure market will definitely be a drag. How they ramp up adoption in the first year is going to decide the longevity of their IaaS ambitions
  • The success of AWS is solely due to the success they had with developers. Even though Oracle has the attention of Java developers, it is going to be a tough climb for Oracle to gain developer karma. It is going to depend on their community outreach in the first year to see how far they can go on this front

Opportunities

  • Their leadership in database market will help them gain enterprise interest in their IaaS.
  • By leveraging their Java platform to Oracle IaaS and making Java apps first class citizens on Oracle IaaS, Oracle can gain widespread enterprise developer trust
  • Oracle IaaS (and their strategy in the coming years for Oracle IaaS) is going to help them go head to head with Microsoft targeting enterprise customers. This puts them in a position where they can target Microsoft for the second place in public cloud market. It is not going to be an easy path but they are better positioned than Google to compete with Microsoft for enterprise customers

Threats

  • Lack of a rich cloud services ecosystem like AWS but this can be easily overcome once Oracle gives the trust that they are serious about their IaaS offering
  • With AI getting widespread adoption since 2016 and Google, Microsoft and Amazon investing heavily on AI services on their cloud, Oracle is at a disadvantage. Google is using AI as a way to compete hard against AWS and Oracle will need an enterprise AI strategy to make their IaaS stay competitive in the coming year(s)

Conclusion

Even though they are late by close to a decade, Oracle has moved into the public cloud space. They are clearly disadvantaged at this point in terms of richness of developer and other higher order services on top of their IaaS. But we expect them to fill the gap through acquisitions and compete hard with AWS. If they can take their IaaS revenue to $1B in 2017, I can confidently say that they will be a major force in enterprise public cloud market. It will be interesting to watch where they go from here.

Competitors

Amazon AWS, Microsoft Azure, Google Cloud, IBM Bluemix

Document Source

Briefing Note: https://github.com/rishidot/Briefing-Notes/blob/master/2017/Oracle-IaaS-Jan.md
SWOT: https://github.com/rishidot/SWOT/blob/master/Oracle/Public-IaaS.md

Open Conversations: OpenStack

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At Rishidot Research, we strongly believe in having transparent and open discussions on topics related to our research areas. As a part of this move, we are planning to run a series of Google+ Hangout discussions on some of the topics of interest. We believe that every analyst firm should have open conversation with the community as a way to strengthen the industry.

The first conversation in this series is on OpenStack, the open source cloud infrastructure platform. OpenStack held a design summit and conference last week and there was lots of enthusiasm among the partners and practitioners. We want to bring interested people in the community together to discuss where the project is heading in the coming years. We welcome you to join us on Google+ Hangout which will also be livestreamed on Rishidot Research Youtube Channel.

When: April 26th 2012 (Thursday) at 2:15 PM PST

Where: To join the discussion, visit my Google+ page at the time or add me to your Google+ circles. It will also be livestreamed on our Youtube Channel.

The following have confirmed their participation in the event.

  • Dave Cahill, Director of Strategic Alliances at SolidFire
  • Narendar Shankar, Senior Director of Product Management at Nexenta
  • Boris Renski Jr., Co-founder & CMO at Mirantis
  • Alex Williams, SiliconAngle
  • Matt Weinberger, SiliconAngle
  • Ben Kepes, Diversity Limited
  • Niki Acosta, Evangelist, Rackspace CloudBuilders
  • Florian Otel, HP

We are hoping to see you on Thursday and let us take the OpenStack conversation forward.

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