Notes from the Goldman Cloud Conference

I spent 6 hours yesterday at the Goldman Cloud conference. I figured I would write up the highlights...

It was a full room of investors and a few industry insiders. The panelists were all mid-cap to large-cap firms.

What was interesting is some of the missing companies. No IBM or HP, which I don't mind since they take such a portfolio view of the world and seem to not be on the cutting edge. But the big missing company was Amazon. It was funny to hear companies like Rackspace diss them as a niche vendor.

The one data point I heard was Cloud Computing will grow to $44B (10% of IT spending) in 2013, up from $17B (5%) today. SaaS is big driver. CIOs accept it.

One of the banks that was there talked about how they are doing private and public cloud now and saving about 20%.

Brian Byun of VMWare was on two panels. I found him to be the brightest start int he room. Very direct and clear on their vision and obviously executing well. He had a numebr of statements in his first panel I found interesting. To paraphrase: "Today, IaaS is more important than PaaS since so many existing apps and technology want direct access and control at the hardware, network and OS level. However, new apps will want a PaaS to give them lower cost and more agility. Customers will want a PaaS that is open, hence Azure and Google are bad and VMWare is good." That last sentence I am really paraphrasing, and of course he said it in a smoother way than I can - but I definitely got his meaning. He also made a good point that a lot of cloud adoption is from the bottom up.

Goldman's CIO talked about how their internal Compute Cloud and Desktop Cloud are fully implemented. They are now working on a general purpose internal Cloud and next year will expect 50% of new apps will be deployed on that.

Hitachi's CIO said that there is less concern about security relative to using the public cloud or SaaS services. These issues are being addressed and it is becoming much more of a normal operating process for IT departments.

Finally at 2:15, the sessions I had been waiting for was on - "Cloud Platforms - Building On-Ramps to the Cloud". VMWare, Red Hat, Citrix, Rackspace and Savvis. Not only was the topic interesting, Brian Byun of VMWare and Paul Cormier of Red Hat really got into it. So often these panels are so boring and politically correct. Best line was when Paul called VMWare "borderline delusional" and Brian fired back something like we have customers paying us $3B this year, so we can't be all that delusional. Anyway, some of the highlights:

VMWare says that 30-40% of their business will be from external cloud providers in 3-5 years. I think this is a decent proxy for the growth of the public cloud. They have 3,000 service providers - so while there will be some big ones, there will also be industry specialization (like a cloud for financial service firms).

RHT says that customers want to have their apps run on private and public clouds. He was really driving at the fact that many apps are written to the OS and to middleware. Or said more bluntly, since everyone uses RHEL in house, why don't more service providers run RHEL for their Cloud offering? He was blunt in saying that apps don't run on hypervisors...

On the Private Cloud. VMWare says it is kind of like training wheels for companies as they eventually will migrate more and more toward the public cloud. Citrix went so far as to say that most private clouds are a rehash of bad data center practices.

VMWare and RHT also got into a battle about who is more open and the importance of that. I think the key things that came out of that discussion was a need for PaaS to use open source that would be standards based and give customers an easy path away from a vendor. There are at least 12 "standards" emerging at the IaaS level. I found Paul's statement that standards move too slowly, and that is why they came out with the open source Delta Cloud project 3 years ago pretty ironic...

Not sure how much I got out of the day, although Goldman provided a very good sandwich in the box lunch. And it is clear from the early SRO crowd and many of the statements from the vendors and CIO's that the Cloud is the next big thing...


Sacha Labourey said…
Thanks, cool summary. Any feedback on pricing model?
Bob Bickel said…
No real pricing discussions. A lot of it was people repeating the message "The Cloud is the future". That's why I implied I am not sure it was worth 6 hours - although they had a good Internet connection and I got some work done...

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