In the first article of this series, I spoke about how and why cloud IT providers use lock-in. I'll briefly revisit this and then focus on strategies to maintain buyer power by minimizing lock-in.
Here are two predictions for differences in industry evolution between Cloud IT and 20th century autos:
- The Cloud IT sector will consolidate an order of magnitude faster (perhaps two) than the auto industry did
- Future Cloud IT oligopolists will work to maximize customer retention by maximizing switching costs (creating lock-in)
By allowing administrators to partition up underutilized physical servers into ‘virtual’ machines, they could increase utilization and free up capital. Unfortunately that hasn’t happened for the most part. It’s a poorly held secret that server utilization in enterprise datacenters is much lower than most people think as virtualization reaches saturation with about 75% of x86 servers now virtualized.
Avoiding assets by owning no cars is a key part of Uber’s strategy, so why would Uber invest in data centers?
While most people working for cloud providers (I used to work at one) will tell you that Disaster Recovery is a great use case for cloud, our panelists weren't so sure. The feeling in the room is that utilizing cloud environment in addition to traditional on premise environments created a bunch of operational complexity and it was safer to keep both production and DR in-house.