Part 1: A VC and Entrepreneur in the Cloud, Cloud 101 & The Future of Cloud (1 of 3) by Tiffine Wang & Nelu Mihai
Hi everyone, I don’t believe that 2018 is coming to an end. This year, I decided to stay put in the Valley. It’s eerily quiet with everyone gone, making it the perfect time to finish this piece
The last few months, I have been exploring the cloud with my friend Nelu Mihai — who happens to be a computer scientist, tech executive and serial entrepreneur and we want you to be part of the discussion. These articles will save you months of research and meetings. If you’re a cloud expert or entrepreneur, we would love to hear from you. Please email us at: tiffinewang@gmail.com.
We’ve broken down the topic into 3 parts.
Part 1: Introduction to the Cloud of Clouds
Part 2: Multi vs. Hybrid Cloud
Part 3: Serverless, Containers and the Future of Cloud
Part 1: A Brief Introduction & Overview
Although cloud computing has recently come to the forefront of attention, the idea of the cloud isn’t new. The premise is, rather than paying up front to own, and then later paying to maintain IT infrastructure, companies can rent the needed infrastructure on demand — including servers, storage and networking. Consequently, the cloud enables companies to scale easily without worrying about it. The main providers of Cloud Infrastructure-as-a-Service (IaaS) today include: AWS, Microsoft Azure, Google Cloud, Vmware, Oracle Cloud, and Alibaba Cloud.
AWS alone has reached $27B in revenue with 46% year-to-year growth, which in absolute figures is more than $2B in annual growth. Moreover, AWS commands 52% market share, delivering more than 140 services. From blockchain infrastructure, to robotics software to launching satellites, AWS wants to be a part of everything.
Cloud of Clouds:
So where is the cloud going? At the beginning, the internet was a collection of separate networks and in time it evolved into a “Network of Networks”. We think that the cloud will evolve the same way; in time, it will become a “Cloud of Clouds”. In a matter of years, core, edge and fog cloud will effectively fuse into one single logical centralized computer with proprietary distributed cloud implementations which will interoperate with each other using a universal almost standardized interface.
Different, like Everyone Else: What makes each one unique?
Sun Microsystems coined a great term: “The Network is the Computer”. Paraphrasing this, we can anticipate that “Cloud will be the Computer”. The Internet has been built with several principles in mind but one of them is essential: survivability by any means.
The Cloud has required development of a more sophisticated architecture with efficiency, performance and security becoming paramount. Clearly, cloud providers are working hard to differentiate themselves along these criteria. Paradoxically however, the more that providers try to differentiate by innovation, the faster the cloud will become a commodity, available to everyone, regardless of their programming ability.
AWS, Clear Leader
AWS is the clear winner for now, and the most innovative. The amount of open source software aggregated on AWS is simply astonishing. They are moving fast and are building the next generation of distributed IaaS and PaaS global network. One of the main design principles in AWS is “cell based architecture for everything”. This is a distributed architecture, logical centralized, but architected to minimize the impact of failures and to reducing the blast radius.
While AWS includes almost every other cloud’s features, it has distinctive competitive advantages: AWS has created Lambda serverless service, a functional model of programming the cloud and has focus on correctly designing or redesigning all applications for large scale distributed architectures. This focus is essential for a new generation of native cloud applications.
Azure, King of Enterprise Computing:
Azure is making tremendous progress. Microsoft’s priority is on the hybrid cloud, as Microsoft is still the king of enterprise computing. The Azure cloud naturally enables a smooth transition from private enterprise data centers to a public cloud inside the Microsoft ecosystem.
Google, AI and Kubernetes:
The Google Cloud Platform (GCP) has two clear competitive advantages: AI and Kubernetes. The most used AI software frameworks originated in Google. Kubernetes has become almost the de facto standard for container programming. It is used by Google as a beachhead to penetrate the enterprise private cloud market and as a universal bridge for multi-cloud. Google intends for the trio, K8, Istio and Knative to become the next generation of native cloud operating systems.
Oracle, It is all about Cloud Databases and Blockchain:
By contrast, Oracle is focused on blockchain platforms (simply said, blockchain is a distributed database which allows secure peer to peer transactions). Although Oracle was late to the cloud, it remains the dominant vendor of enterprise databases and accordingly has made more progress on cloud-based blockchain databases than any other cloud player. While AWS is redesigning all open source databases for distributed architectures, Oracle is building a secure cloud specialized to support databases better than its competitors. We should not discount this late entrant to the cloud business arena.
Vmware is defending its enterprise virtualization business by adding container support (see Heptio acquisition) to its product line, and partnering with Google and AWS for hybrid cloud. Its business strategy is in a way, similar to Microsoft’s. However, by not being a public cloud player, they depend on partners to promote hybrid cloud. Vmware is, latently but surely, becoming a significant security player for private cloud and SD-WAN
IBM: By acquiring Red Hat, IBM hopes to enter the hybrid cloud business and become dominant. Many have considered this acquisition to be a victory of the open source movement.
On its own, Red Hat’s revenue and market share growth had slowed. As a part of IBM, with its extensive sales channels, Red Hat’s revenue should significantly increase, allowing IBM to become a major player in the hybrid cloud marketplace. This acquisition is good for both companies. However, Red Hat was the flagship of successful companies commercializing open source software and currently there is no other one with the same business mass to replace it.
Chinese Cloud Providers: In the same time, we tend to discount large Chinese cloud companies which are growing rapidly due to the huge market available locally to them. AI and blockchain are an important part of their strategy. Chinese companies have a significant advantage for building and testing clouds at very large scale with their local market of 1.5B users. They will become more and more relevant and a formidable competitive force on a global scale.
Up next, we will discuss Part 2: Multi-Cloud and Hybrid Cloud. We would love to get input from the community whether you agree or disagree with us. These thoughts are our personal thoughts and do not represent the companies we work for. Please email us at tiffinewang@gmail.com. Chat soon!
Tiff & Nelu
December, 2018
