Over the last two months, we have visited with more than 50 Fortune 500 firms to discuss their thoughts about adopting and harnessing the disruptive technologies and services that are driving the next generation of IT. Inevitably, our conversations focused on the cloud and its potential impact on the price point and flexibility of IT delivered and consumed at the enterprise level.
But most of the firms we met with expressed disappointment in the support they are currently receiving from their incumbent hardware and software providers. We heard time and again that the providers are eager to engage in conversations (often confusing and contradictory) about the power and relevance of the cloud, and each pointed to the groundbreaking products and services they have, or soon will. However, when it came to presenting an actionable roadmap to for planning and/or actually implementing production-ready solutions, the providers launched a major back-peddle. They suggested that despite the hype, the client was already close to best practice, as it was well down the road to virtualization, or that the offerings were not appropriate for firms of its size or industry. If pushed further, the providers stated that the solutions under consideration were not practical because of security and or regulatory issues.
What’s going on?
It is clear that most large enterprises are giving serious thought to actively adopting cloud-based solutions for at least some of their workloads. And fearing they will be left in the dust by the new breed of cloud-specific competitors – including Rackspace, Amazon, and Savas – the incumbents feel they must, at a minimum, engage in conversations with their clients about cloud. When pushed to deliver a public/private cloud solution, the major hardware and software providers are investing considerable time and money on solutions with unacceptable quality, performance and/or resilience. They also lack the internal expertise to implement the new solutions. Perhaps most troubling for the incumbents is that they face a huge conflict of interest as the next generation of IT solutions replaces the existing infrastructure at a fraction of the cost and, hence, dramatically cuts into the providers’ revenue.
In short, their strategy is to obfuscate, delay and criticize. And while enterprises are looking to their existing providers for leadership, and would much prefer to have one familiar throat to choke, the frustrating and confusing conversations they are having with their current incumbents is driving them further into the waiting arms of the challengers that have, solid offerings, real capabilities, and strong value propositions.