The value and impact of the public cloud

"Editor's note" Zhang has been working in the IT field for more than 15 years and has served as a database technology expert, IT service Manager, Senior cloud computing architect, and senior Director of Strategic department. This paper tries to discuss the value and influence of public cloud from the whole angle, evaluate the development speed and current situation of the public cloud, and discuss how to combine the public cloud and the enterprise's future development strategy effectively in the development strategy formulation.

The value and impact of the public cloud

Cloud computing itself comes from innovation in it technology, and it achieves five basic features:

use on demand; resource sharing; network access; service measurable; expand on demand.

From the perspective of cloud computing, the public cloud is one of the cloud computing deployment patterns, in addition to the private cloud, mixed cloud deployment model.

Public cloud usually refers to third-party providers in the cloud mode for the user to provide IT services, generally available via the Internet, may be free or inexpensive, the public cloud is the core of the implementation of resource sharing services. The generation of public cloud can be seen as a common result of demand-driven, technological progress and business model innovation, which enables users to build their IT capability from the original purchase mode capex to the opex of the operation mode.

Note: This article mainly discusses the public cloud, in the public cognition, the cloud computing and the public cloud are basically identical, but, in the standard definition, the public cloud can be regarded as one kind of cloud computing, this article will compare the two concepts and the word strictly.

The core nature of the public cloud; the public cloud is essentially a way for it (information Marvell) capacity building and service delivery, with the core of providing it capabilities in a cloud-based manner, offering three classic service patterns for IaaS, PaaS, and SaaS. Public cloud This new type of IT capability acquisition is not a long time, but its impact and vitality is very strong, the enterprise's original it ability to acquire the way (buy and own) has formed a great impact.

Generally speaking, in addition to being able to offer attractive IT services to end users at low prices, the public cloud creates new business value and, as a supporting platform, integrates upstream services (such as value-added business, advertising) providers and downstream end-users to create new value chains and ecosystems. However, I think from the perspective of the overall macro:

The value of the public cloud the greatest value is that it will greatly enhance the overall level of IT capability of the whole society, can help enterprises to better globalization and higher it capacity based on higher level of innovation, so that competition at a higher level. The following two diagrams clearly show the status of enterprise IT capability and the future of public cloud.

Before the emergence and popularization of public cloud services, the level of IT capability of each enterprise is uneven, as shown in Figure 1, the histogram represents the level of IT capability of each enterprise, and the horizontal dotted line represents the overall average IT capability of the whole society, currently assumed at 40%. The solid black curve represents the capital invested by each enterprise in building it capabilities.

Fig. 1 Illustration of the level of IT capability of different enterprises at present stage

We can see that in order to achieve higher it capabilities to support business development, enterprises must invest a lot of money and resources, and this kind of input is closely related to the IT capability. From the money curve can also see different enterprises in the construction of the IT capacity of the same situation, capital efficiency is different, there are a lot of waste.

When the public cloud services become popular, the world will have a limited number of large cloud service providers to provide IT infrastructure services, service levels will converge, and this average level will be significantly higher than the current overall it average level. Companies can get higher it capabilities at lower cost, as shown in Figure 2, where the enterprise's capital investment is significantly reduced, but it capability levels are up to 70 and above.

Figure 2 Enterprise IT capability diagram after public cloud popularization

When building it capabilities, several large cloud service providers build it capabilities through the advantages of scale and experience accumulation, making the use of funds is very efficient, breaking the current individual enterprise fragmented, overall and inefficient it capacity building model, the future enterprise users only need to spend a small amount of money to buy it capacity services is enough.

The impact of the public cloud; from the macroscopic point of view, the popularity of public cloud will bring about a big increase in IT capability, which is the most direct impact, and bring the collaboration between enterprises, business innovation more efficient.

From a microscopic point of view, the popularity of public cloud will change the way enterprises in the acquisition of it capacity of resources, enterprises will be more easily low-cost access to relatively high it capabilities, and more flexible, faster. However, the other side of the coin is that it is hard for businesses to get a much higher level of IT infrastructure than others through simple rough.

At the current stage, enterprises through a large amount of resources input, can make it more basic ability than other enterprises, this kind of it ability advantage helps to form differentiated core competitiveness; In the future, the enterprise's investment in IT capability needs to be more refined, and the combination of business needs to be more intensive and the interaction mode needs more innovation. As the underlying IT infrastructure capabilities converge and at a higher level, enterprise competition will be based on the combination of the top application technology and business innovation capability.

Back to the present, the development of the public cloud to the IT enterprise subversion you have seen many examples, such as IBM's cloud transformation, HP's Mixed Cloud transformation, Oracle in the SaaS cloud layout, and so on. With the popularization of public cloud, the overall IT capability promotion, as well as the advancement of information technology, will be subversive to many traditional enterprises ' way of life.

For example: paper industry, stationery and other enterprises, with the digital wave, cloud service development, its traditional core business will be a big impact, simple paper and stationery will gradually be digitized equipment + cloud service mode instead, so that the market slowly shrinking, other such as manufacturing and other real economy of many industries will be very big impact.

The public cloud is growing fast, but still at a very early stage

The development speed of the public cloud; the industry's development rate for the public cloud is usually evaluated by the increase in revenue, and many consulting firms, such as Gartner and IDC, have a lot of analysis and predictions about the public cloud. The specific income figures are different, but they are basically at the same level. Overall, the annual growth rate of the public cloud in recent years is around 30%, the current more consensus of the public cloud income of about 65 billion U.S. dollars, and is expected to reach around 150 billion U.S. dollars by 2018. As shown in Figure 3 below, this is Gartner's forecast for Public cloud revenue (which includes ad revenue).

Figure 3 Public Cloud Service Market Forecast

The public cloud is in its infancy, like a child of a few years old, and the public cloud has only been around eight years, and if it is carefully evaluated, its market impact will find it very rudimentary. In theory, the public cloud will in the future replace it software, hardware and services, which currently have a value of about 1.2 trillion dollars and are slowly growing every year; The simple calculation ratio will find that the actual popularity of the public cloud less than 5%, while the Chinese market is lower, about 3%.

So although the public cloud has gained momentum in recent years, but his actual output is still very small, if the age of the man to metaphor, like a child, although has shown a good potential and a certain intelligence, but to grow up, it will take many years, may be 20 years to initial maturity, 50, It will take 60 years to enter the age of old.

The public cloud has not yet crossed the Rift Valley; a book that crosses the Rift Valley (crossing the Chasm) is interesting, introducing the theoretical model of the application of new technology in the market, called the "Technology Acceptance Lifecycle" (Marvell Adoption Life Cycle), Is like the five stages shown in Figure 4, which, as the name suggests, is a model for measuring acceptance of new technologies. One of the deepest and most feared cracks between early adopters (Early adopters) and early mainstream users (Early majority) in the practical application and popularization of a new breakthrough technology in the marketplace We can call it a Rift Valley (chasm) in the technological acceptance lifecycle. The Rift Valley is the most dangerous because many people are unaware of its existence.

Fig. 4 Technology Acceptance Lifecycle diagram

After the new technology was accepted by the early adopters (Early adopters), they expected a jump-discontinuous development. Whether it is to reduce costs, speed up business delivery, better customer service, or other competitive advantages, they can accept the new technology caused by the discontinuity of the original way. As the first to use the new technology, they can endure the resulting minor problems and failures, but the early mainstream users (Early majority) is not the case.

The popularity of new technologies in the marketplace is likely to be premature if early adopters are less receptive to new technologies. In a simple mathematical model, the likelihood of a new technology dying is high if the market share of new technology is slow to cross the 13.5% ratio.

So far, the public cloud has undergone eight years of development, the current market penetration is about 5%, although still at a higher rate of growth, is expected to reach around 2023 13.5% of the market share, but the future remains a big variable, whether the Rift Valley is still unknown.

There are selectivity risks in the adoption of public cloud in enterprises; Image point for the public cloud is still a child, if you invest too much in the future of the child, you have the possibility of an endless cost, because the child may die prematurely.

For businesses it means that the public cloud is a new thing if the premature choice to invest in a new technology and application model is a risk of failure. For most businesses, eating crabs (innovator) is extremely risky and early adopters are at relatively high risk. At present, enterprises with large public cloud use can be regarded as early adopters, such as Netflix. In the early mainstream stage, it is usually the best choice for ordinary enterprises.

Figure 5 Selective risk with public cloud

For the use of public cloud, most enterprises should be very cautious, although now just over the stage of eating crabs, still need to put the risk awareness in an important position.

The influence of uncertainty of future situation of public cloud on enterprise strategic choice

As the most influential cloud computing in the future of information technology change, enterprises should think deeply about the influence of public cloud on the future enterprise strategy, and the strategic thinking is the basic quality that should be possessed by the high-level enterprise. In short, I think there should be a few points here:

The popularity of the public cloud makes it difficult for companies to gain a unique competitive edge by investing in simple it infrastructures; As already mentioned, the public cloud will increase it capabilities to a higher level, and if the enterprise relies entirely on its own resources to build IT infrastructure, will be an efficient and inflexible strategic choice. Can analogy with the real world after the popularization of electricity, there are few enterprises to use their own generators to generate electricity, enterprises can be based on the current status of electricity popularization in its upper application of innovation, build their own core competitiveness and business advantages, the popularization of cloud services will result in similar results.

Enterprises need to make full use of the synergy advantage brought by public cloud; the popularization of public cloud will promote the cooperation and innovation among enterprises more efficient and common, will bring great help to the enterprise's own business development, so it should start from now to use the reverse thinking of scenario planning to carry on the strategic thinking after the enterprise business and public cloud combine. The thinking of the value of cloud computing should be measured in terms of both holistic and individual benefits. The investment in cloud computing will produce many synergies that are not currently visible, and not just see the current cloud landing on the cost savings of the enterprise, management complexity of the reduction or cloud migration complexity of the consideration, which will be Maiduhuanzhu, And ultimately affect the enterprise and cloud computing related strategic decision effect.

In the future, the core competitiveness of enterprises depends on the differentiated IT capability building on the public cloud, and the convergence of the underlying IT capability makes the enterprise have to build the ability of differentiation on the upper level. Therefore, the enterprise should start from now gradually to pay attention to, understand and practice the change and impact of the public cloud, combine their own situation, set a long short-term plan, there are steps to strengthen the public cloud services in the enterprise within the landing and use, and reverse thinking on the public cloud on the enterprise how to build their own differentiated ability advantages.

"Manuscripts proposal" in recent years, cloud computing has become the core driving force to help enterprise transformation, not only the enterprise's IT Infrastructure management brand, but also to bring more intelligent operation. At the same time, cloud computing is leading the industry to change the way people live. Although the cloud computing in the rapid development, but from the start, research and development, application, promotion and other aspects, in China, the development time is relatively late, which has many problems, can be described as opportunities and challenges coexist. In order to promote cloud computing technology development, better service providers, CSDN cloud computing channel for the cloud service provider, start-ups and individuals, such as collection of manuscripts, invites the company's doers to talk about your technical combat, as well as case-sharing, but also welcome a hot topic or technology to share your views.

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