All Signs Point To The Cloud, But Will IBM i Crowd Follow?
February 15, 2016 Alex Woodie
You don’t need a weatherman to see that clouds are quickly building. American companies are moving workloads to big public computing clouds from Amazon, Microsoft, IBM, and others at an unprecedented rate, spurring a massive data center building boom. But will IBM i shops fall in line and move to the cloud? That’s where the forecast gets a little iffy.
There’s an abundance of signals reflecting big uptake of clouds, including public clouds run by the aforementioned companies, as well as private clouds run by managed service providers (MSPs) and IBM business partners.
A January study of more than 1,000 tech pros from RightScale, a provider of cloud management software, shows that private cloud adoption grew from 63 percent of surveyed companies to 77 percent. The survey found that four out of five companies have a hybrid cloud strategy (unchanged from 2015), but that nearly every company (95 percent) is running or at least experimenting with infrastructure as a service (IaaS) in the cloud.
The 800-pound gorilla in the space is Amazon Web Services, which was used by 57 percent of the companies in RightScale’s survey. That was flat year-to-year, but Microsoft’s Azure IaaS showed big gains, growing from 12 percent of the surveyed companies to 17 percent. About 10 percent more enterprises (defined as companies with more than 1,000 employees) are at least beginning their cloud journey compared to small and midsized businesses (SMBs), but more SMBs relying heavily on the cloud.
Meanwhile, a new survey from IDC finds a close correlation between the adoption of mobile and big data technologies on one hand, and the adoption of a hybrid cloud computing infrastructure among enterprises on the other. The study, which was funded by storage giant EMC, goes so far as to state that hybrid cloud technology is “the great enabler” of digital transformation, as defined as the embrace of big data and mobile tech.
This digital transformation has completely changed customer and consumer expectations, says Jeremy Burton, EMC’s president of products and marketing. “They expect everything to be online, connected, and immediately accessible via mobile apps, so they can do what they want, when they want, from anywhere,” he says. “I don’t think I’m going too far in saying that our new digital world is a massive opportunity for the companies that embrace it, but a potential extinction-level event for the ones that don’t.”
Infor, which knows a thing or two about the intricacies and peculiarities of the IBM i thanks to a paying customer base of 14,000 IBM i customers, also investigated cloud adoption trends recently. But in this case, it focused on distributors, which make up a good chunk of its Infor LX (BPCS), System 21, Distribution iBusiness (A+), and M3 customer base.
Infor’s new cloud survey, which was conducted by an outfit called TechValidate, found that 40 percent of survey respondents are very likely to consider investing in a cloud solution during the next 12 months, while 32 percent are currently hosting technology in a cloud. That gives means roughly three out of four survey respondents are either using the cloud or planning to, which meshes quite nicely with the RightScale survey figures cited above.
The cloud provides distributors new opportunities for growth, says Kelly Squizzero, Infor’s industry and solution strategy director for distribution. “Migrating to the cloud can help distributors deliver maximum value for customers, because critical information, such as inventory levels, can be accessed in real-time from various locations,” she says. “This can give decision-makers more visibility to help them make the best choices.”
At this point, your average IBM i shop will be saying “The cloud sounds great. I don’t want to go extinct and I want my business to adapt to the digital transformation occurring around me. But how exactly do I get there?”
This is an excellent question, because, as we all know, IBM i shops are not like “normal” companies, insofar as your average companies (the kind that are heavily represented in surveys like the ones that RightScale and Infor did) are more likely to be relying on business applications that run on Windows and Linux. IBM i shops, alas, rely on IBM i-based applications to run their businesses.
This is a concern because all the public cloud platforms like AWS, Azure, IBM SoftLayer, and Google Compute Engine only offer Intel X64-based systems to cloud customers. Power-based clouds are available, but only in a hosted environment offered by a handful of MSPs. While you can run your IBM i environment in a cloud, do not get the same type of elasticity and economies of scale that you see from public clouds based on X86 servers.
For IBM i shops, moving to a “the cloud” right now is more like outsourcing your server to an application service provider (ASP), hosting bureau, or co-location facility than participating in the utility-like grid that AWS and Azure offer. While the clouds hosted by MSPs do offer IBM i shops benefits–such as reducing cost of administration and maintenance and moving to an operations expenditure (OpEx) model as opposed to a capital expenditure (CapEx) model–they simply don’t add up the same way they do for “normal” companies moving to an IaaS platform hosted on a public cloud.
Nevertheless, there are signs that IBM i shops are moving ahead with cloud plans, or at least considering alternatives to running their own hardware.
In its second annual IBM i Marketplace Survey, HelpSystems found that about 9 percent of IBM i shops have already outsourced their boxes, about 8 percent are using a colocation facility (while managing their server themselves), and about 8 percent of IBM i shops are considering adopting an MSP. That means about 25 percent of IBM i shops have either gotten out or are working to get out of having their own hardware. However, the vast majority of IBM i shops–72 percent according to HelpSystems figures–have no plans to outsource or adopt an MSP.
Clearly, the numbers show that IBM i shops are moving to the cloud more slowly than the population at large. (Interestingly, the split–roughly 25 percent cloud, 75 percent on-premise– is the inverse of general population of companies). This shouldn’t come as a surprise when you think about the libertarian streak that runs so strongly through the midrange. Considering the types of administrative costs and headaches that Windows and Linux machines have historically brought to companies, it’s not surprising that big swaths of American enterprises and SMBs would look to offload the day-to-day management of those platforms to somebody else.
In that respect, the total cost of ownership (TCO) advantages that the IBM i platform has historically brought to those companies that adopted it run counter to the whole public cloud trend. IBM i shops are already running leaner and meaner than their brethren that rely on Windows and Linux business apps, so the move to the cloud brings fewer advantages.
Nevertheless, the move to the cloud is a generational shift, and it will eventually impact IBM i shops. No server is an island these days, and companies are finding the need to integrate at an application- and data-level more than ever before. IBM i shops would do well to prepare themselves and their applications to embrace the cloud way of being, even if only means supporting Web services and data formats (like REST APIs and JSON documents, respectively) that are fast becoming the lingua franca for doing business on the Web.
EMC is right when it says a digital transformation is at hand that will separate the business haves from the have-nots. Mobile computing and big data analytics are the materiel that startups are employing in their battles against incumbents. IBM i shops in every industry will eventually start feeling these competitive pressures, and will be dragged into a war for customers.
The good news is IBM i shops are already partially armed, thanks to a rugged business platform that’s proven to be secure and reliable for decades on end. IBM i shops are clearly aware that something is going on, owing to the fact that nearly 60 percent identify application modernization as their top concern, per the HelpSystems survey. The question is whether they will go far enough in preparing themselves for the coming digital disruption.