Enterprise CIO’s have a difficult job these days. In my discussions with many fortune 1000 CIOs, the constant theme from all of them is the enormous pressure they have in balancing between providing innovative value to their business and keeping the lights on. Carving out just 20 to 30% of their budget for net new initiatives in their digital transformation journey for cloud enabled applications isn’t cutting it. They need to find money from the other 70% of their current spend on the traditional enterprise applications. Their agility is also hampered by the decade or more old static infrastructure their existing applications run on. Digital transformation of their entire footprint is the billion-dollar challenge in front of all these CIOs.
So, what gives? While the intent is to move to the cloud for agility, to foster innovation and better TCO, why do enterprises still have a 70% on-premise footprint? The answer lies in decades of innovation and investments that have gone into building and running these applications. When more than 40% of Windows licenses are still running Windows 2008, even after Microsoft deprecated its support, should tell us the severity of this problem. Skills gap, the risk averse nature of Enterprise IT and the fear of losing control all contribute to the enormous inertia within Enterprise IT to move this large swath of workloads to the cloud.
Public Cloud Providers want to bring all these workloads to their platform and provide a ramp to the world of digital transformation. SAP started this trend almost 7 to 8 years ago but supporting a very similar on-premises environment in the public cloud making it easy for enterprises to leverage the elasticity and agility of the cloud, reducing and relieving them of managing these complex environments and getting out of their Data Centers. VMWare followed this trend by moving and enabling their infrastructure to run on these kinds of clouds followed by NetApp. I predict it’s only a matter of time before all existing providers of infrastructure move into this class of cloud called Dedicated Cloud.
Please stay tuned for my next blog on what are the characteristics of these Dedicated Clouds.