Only today I went to a great presentation by Cisco CTO Kevin Bloch and he told the audience that we will not be buying servers in 10 years time. Yet if we all move to the cloud how will this impact the traditional big IT companies?
Cloud companies like Facebook, Google and Amazon buy their hardware directly from low-cost asian original design manufacturers and their underlying core software is based on open source.
How will the big traditional IT companies compete against low cost, low margin cloud
providers? When customers choose easy to use SaaS business solutions that sit on top of cloud the traditional IT vendors will not only lose infrastructure hardware and software revenue, they will also lose services and all the infrastructure support software and clever SaaS providers will choose the lowest cost middleware and databases that can serve customers well so there will be another huge loss of revenue.
Cloud is IT centric, SaaS on top of low cost commodity cloud business centric.
Up until now the internet disrupted many businesses and now it is big IT’s turn to have its business model disrupted. Ironic that IT is radically disrupting big IT companies!
Examples of Cloud First policies:
US Government
UK Government
NSW Government
Update 21/10/14:
http://www.finance.gov.au/sites/default/files/australian-government-cloud-computing-policy-3.pdf
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