back to article Big Mickey Dell is wrong: Cloud ain't going to eat all of IT

Public cloud will not consume all of IT. At least that’s what Michael Dell is claiming. In his opinion, cloud will become just another form of computing and a choice will be made by users to do cloud on-premises or rent from a cloud provider. Bearing in mind Dell is in the hardware business, we can hardly expect a comment …

  1. Anonymous Coward
    Anonymous Coward

    See "this BBC article" that inst a link but changes colour as you hover over it 3rd paragraph. ;-)

  2. gv

    IT as a resource

    The argument that IT is a resource like power or water is spurious. IT connectivity, i.e., the Internet, is a resource, but the business applications that differentiate one business from another and provide competitive advantage should be considered a core part of the company and managed accordingly. From the cloud providers perspective, the scope for customisation or adaptation of applications deployed in the cloud has to be minimised.

    1. Anonymous Coward
      Anonymous Coward

      Re: IT as a resource

      > The argument that IT is a resource like power or water is spurious.

      Agreed. The analogy applies to SaaS: if you can replace your in-house mail server with a cloud mail server, then fine. Similarly for your accounting apps, your personnel apps, your word processing apps. What you are buying then is a fully managed application, and for those applications, no IT staff are required at all.

      But IaaS is something else. You are still managing software and operating systems, installing patches, performing data backups, monitoring performance and so on; all need skilled IT staff.

      Sure, if the hardware dies, they will transparently restart your server on another box; and the underlying storage is probably replicated too. But you aren't going to save anything on your IT headcount, since basically the only job you're relieved of is ordering and racking equipment.

      In some ways you get additional jobs: like checking there are no old VMs or unused data volumes, happily sitting there and silently consuming dollars.

      1. OnlyMee

        Re: IT as a resource

        I fully agree that IT can be core part of company's competitiveness, BUT that competetiveness is surely not coming from racks full of big vender hardware running standardiced enterprise software and impletement with common industry datamodels!

        That just gets you to same line as anyone else. If you host the same thing in cloud again you are just on same line as anyone else.

        In my mind competetiveness what IT brings must come from inhouse written code, analytics and automation scrips for menial backoffice tasks. Why? Because here you can drive real difference in how business operates.

        For example I see most financial institutions still filling compliance docs manually with hundrads of staff to a word docs before submitting to review in Luxemburg. Now few organisations have automated this together with autocollecting data from their fraud deparments to used in these reports. This is faster, less error prone and much cheaper. Its the software that makes a difference not if you run it on cloud or on prem.

        Why cloud is gaining popularity is that it is making easier to build something like this compared to on premise alternative. You get SQL services, API gateways, NoSQL, MQ services, , object storage with map reduce and many other things.

        When I talk to on prem folk I just get VM and some storage, then spend 80% of the project time wiring up stuff that cloud already gives with nice API... If on prem vendors actually figure that this where they lose to the cloud and start offers services rather than VM's from booting the box I have no issues with on premise. If not on prem IT can go the way of the dinosaurus...

  3. Nate Amsden

    cars and phones terrible analogies

    My last company years ago was a startup all in on amazon (CEOs brother heads amazon cloud). Bills were over 500k a month at peak.

    That company is long dead

    Current company was well on the way to 200k a month before we moved out 4 years ago. Absolute cost savings was just a small part of the savings. That was IaaS cloud. We still use many many SaaS cloud solutions. IaaS is a load of shit, SaaS makes sense in a lot of cases.

    Companies spending such high dollars on cloud because they don't know any better is quite common. Here is a story i found a couple years ago about a very extreme case where a startup was spending 25% of REVENUE on cloud. They moved out, CEO was pissed they got fucked out of millions per year because they didn't know any better

    http://www.techopsguys.com/2014/01/30/more-cloud-fail/

    Some executives don't know any better on the costs. Some are smart enough to realize they are getting fucked by the service provider though.

    If you can really do it right cloud can make sense. Getting it right is hard. MANY developers still struggle with things like single points of failure and multithreading.

    If cloud were the magical thing it's marketed as(to many execs it sounds like 100% uptime and low cost) then it would be great. But it's not. Cloud companies like to blame the customer for their own outages (google may be an exception).

    Biggest challenge I see to avoiding getting fucked by the cloud companies is adequate staffing to run shit internally. Companies seem more comfortable paying millions in extra cost to a cloud because they don't know any better but paying the salaries required to attract and retain talent to do it yourself (even if it means saving millions ) doesn't compute in their heads. Sad.

    1. Preston Munchensonton

      Re: cars and phones terrible analogies

      IaaS is a load of shit, SaaS makes sense in a lot of cases.

      This is perhaps the BOFH/PFY restatement of the thought that Michael Dell was putting forward. For certain, business consumers will make decisions on what makes sense for their circumstances, regardless of the "right" way to do thing according to "architects".

    2. richardcox13

      Re: cars and phones terrible analogies

      > IaaS is a load of shit

      Often yes. The costs of buying VMs in the cloud is.

      But not always.

      For example your steady state is a couple of decent servers and a moderate database: using IAAS will cost more than putting your own servers into a DC. However if you need to scale that to eight servers and a big database (black Friday, sales, run up to Christmas, and similar periods) then suddenly the numbers change.

      If your peak load is not much more (within a factor of two say) then having fixed resources makes sense. But if you sometimes need far more for short periods then outright purchasing makes less sense even if the "normal" periods are more expensive. Not paying for those extra six servers 80% of the time is enough of a saving to more than cover the cost of IAAS rates for that 80% of the time.

      And that's before considering there are significant savings on IAAS when you purchase your base capability on an annual basis rather than daily.

      For a non-trivial business the sums may be very different depending on which LoB application you're talking about.

  4. Ken Moorhouse Silver badge

    Hardware versus Data

    The issue arguably is not so much to do with buying or renting hardware. It is more about where you store your data. The analogy is that you have a warehouse full of stock. Would you care to have that stock under your own control, in your own warehouse, or would you prefer to rent space from a warehouse space provider?

    One reason you might not want to do the latter is what happens if you fall behind with the rent? Who owns your stock, can it be confiscated by the owner of the rented resource in order to offset against your debt? In which case, how will you trade without data? Data has no value to the entity storing it, but then again, there is a big incentive to not lose it.

    In this country it may be the case that a liquidator may say you have a right to that data, even if you can't pay for its storage, but if it is stored in a foreign jurisdiction that may not be seen as an enforceable right.

    Companies probably don't think about the inability to pay for something as it is an admission that failure is a possibility. However, trade disputes are a much more frequent occurrence, and this is where the provider has you over a barrel.

    1. richardcox13

      Re: Hardware versus Data

      > Would you care to have that stock under your own control, in your own warehouse, or would you prefer to rent space from a warehouse space provider?

      Neither. I would prefer the supplier keeps it in their ownership until I call for it (and take ownership) when I have an immediate use for it (this can lead, because I've already got an order for it, to me effectively having ownership for a negative amount of time).

  5. Anonymous Coward
    Anonymous Coward

    > Would you care to have that stock under your own control, in your own warehouse, or would you prefer to rent space from a warehouse space provider?

    Whichever is cheaper. If you are as big as Tescos then it's probably most cost-effective to build your own (and get it tailor made to your requirements); if you're a small corner shop then you rent.

    > One reason you might not want to do the latter is what happens if you fall behind with the rent? Who owns your stock, can it be confiscated by the owner of the rented resource in order to offset against your debt?

    That's a pretty feeble argument. If you can't pay your bills, then you're bankrupt anyway. Also, a court order can confiscate your stock even from your own property.

    1. Loud Speaker

      However, if your ISP can disconnect you from your own data, then court orders don't enter into the discussion.

      I company I was in some years ago was destroyed because their ISP had lied to its parent company about the volume of business it was doing, and multiplied our debts by 10 (together with those of other customers) to explain where the money had gone. If your cloud floats away, you are toast.

  6. Anonymous Coward
    Anonymous Coward

    Internet Weak Link

    One issue with cloud that no one ever thinks about is "what if something disrupts the Internet" ??

    I have had vendors point blank say that that cannot happen. I point out the U.S. President's kill switch, any trouble between the U.S., Russia & China and information warfare is part of that which could massively affect the Internet, what about worms, etc.

    I agree that for certain use cases cloud is great but for workloads that must always be up and are critical to your business--not so much. I just get worried when I am told by multiple vendors that a technology "cannot fail". The Titanic couldn't sink either right ??

  7. Dinsdale247

    Disagree... sort of

    The age old problem of core competency in a business vs. out sourcing. Intel has started ramping up the number of cores they can provide for "on-site cloud" per hardware unit which will drive the cost down. If software companies are smart, they'll lower their per instance costs, but MS and Oracle want you in their clouds now too. The truth is many companies shouldn't be doing their own IT because they suck at it.

  8. streaky
    Big Brother

    Hardware/Dell

    we can hardly expect a comment that doesn’t categorically state the future is buy rather than rent

    I dispute this statement from the ground up. For M Dell as long as people are computing Dell will see sales. Be it in the "cloud" or via hardware directly. Any company who can leverage sales of hardware to anybody who does virtualisation or docker or whatever for any reason is going to make money, and more of it. Also people are still going to compute directly onto servers. There's loads of opportunities in the software space with this too.

    TL;DR: Dell make money either way, no reason to distrust his views.

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