The cloud/hosting Magic Quadrant audience

Simon Ellis over at LabSlice has posted a blog entry in which he notes that the recent Cloud IaaS and Web Hosting Magic Quadrant has, in his words, “an obvious bias towards delivering ‘enterprise’ cloud services“. He goes on to say, “Security, availability and professional services — Gartner is clearly responding to dot-points mentioned to them by the large corporates that consume their material. And I daresay that these companies may not be needing cloud IaaS, but just want to be part of the hype.

I think his point is worth addressing, because it’s true that the MQ is written to an audience of such companies and is very explicit in the fact that we are rating enterprise-grade services, but not true that these companies just want to be part of the hype. That seems to be part of the confusion over what cloud IaaS is about, too. At Gartner, we’re excited by the whole consumerization-of-IT trend that intertwines with the cloud computing phenomenon. But we’re not writing for the individual dude, or the garage developers, or the rebels who want IT stuff without IT people. We’re writing for the corporate IT guy.

Our target audience for a Magic Quadrant is IT buyers — specifically, our end-user clients. They typically work in mid-sized businesses and large enterprises, but we also serve technology companies of all sizes. However, the typical IT buyer who uses this kind of research is the kind of person who turns to an analyst firm for help, which means that they are somewhat on the conservative and risk-averse side. It’s not that they’re not willing to be early adopters or to take risks, mind you. And they’ve embraced the cloud with a surprising enthusiasm. But they’re cautious. Our surveys and polls show that overwhelmingly, security is their top cloud concern, for instance — far and above anything else.

We expect that the IT buyer in our client audience is typically going to be sourcing cloud IaaS on behalf of his organization. He is not an individual developer looking to grab infrastructure with a credit card; in fact, he is probably somebody who is explicitly interested in preventing his developers from doing that. He might work for a start-up that’s looking for a cost-effective way to get infrastructure with no capex, but chances are he’s post-funding or post-revenue if his company can afford to be a Gartner client, so he he shares many so-called “enterprise” concerns — security, availability, performance, and so forth. Managed services options play into a lot of thinking, too — for established companies more in an “offload my hassle” way, and for start-ups more in a “I don’t have an operations team, really, so I’d like to deal with ops as little as possible” way. And yes, professional services can be a help — tons of our clients are head-scratching figuring out what’s the best way to move their infrastructure into the cloud.

Simon Ellis seems to think, from his blog post, that these corporate guys don’t actually need cloud, they just want to be a part of the hype. I think he’s wrong. The sheer number of actual sourcing discussions we’re having with our IT buyer clients — vendor short-listing, requirements, RFPs, contracts, etc. — make it very clear that they’re buying, right now. And they’re buying for real. Production websites / SaaS / etc., production “virtual data centers”, large-scale test-and-development virtual lab environments, cloud-based disaster recovery… This is real business, so to speak.

It’s not an overnight revolution. This is a transition. It usually represents only a portion of their overall IT infrastructure — usually a tiny percentage, although it grows over time. They usually don’t want to make any application changes in the process. They almost certainly aren’t designing to fail. Most of them aren’t building cloud-native apps — although an increasing number of them are beginning to deliberately try to build new applications with cloud-friendly design in mind. Few of them are really taking advantage of the on-demand infrastructure capabilities of the cloud. What they are doing, in other words, is not especially sexy. But they are spending money on the cloud, and that’s what matters in the market right now.

And so in the end, the Magic Quadrant is written to emphasize what we see our clients asking about right now. It’s not cloudy idealism, that’s for sure. And most deals contain some level of managed services, which is why there’s significant weighting on them in the Magic Quadrant. (Fully self-managed is nevertheless a crucial market segment that deserves its own MQ, later this year, although I think the interesting note there will turn out to be the upcoming Critical Capabilities, which is wholly focused on feature-set. Though it should be noted that even a cloud-only MQ is going to emphasize an enterprise-oriented feature-set, not a developer-centric one.)

When we were setting the evaluation criteria for this most recent MQ, we decided that the Execution axis would be wholly focused upon the things we were hearing our clients demand right now, and the Vision axis would be primarily focused upon where we thought cloud services would be going.

The immediate demands are probably most easily summed up as “improved agility at a comparable or lower cost, with no change to our applications, limited impact on IT operations, and limited risks to our business”. The ultimate compliment that one of our clients can give a cloud IaaS provider seems to be, “It works just like my virtualized infrastructure in my own data center, but it’s less hassle.” That’s what they say to each other at our end-user roundtables at conferences when they’re trying to convince non-adopters to adopt.

I’m a pragmatist in most of my published research. I think that as an analyst, it’s fun to prognosticate on the future, but ultimately, I’m cognizant that what ultimately pays my salary is an IT buyer coming to me for advice, and feeling afterwards like I helped him think through making the choice that was right for him. Not necessarily the ideal choice, almost certainly not the most forward-thinking choice, but the choice that would deliver the best results given the environment he has to deal with. Ditto for a vendor who comes to me for advice — I want to reflect what I think the market evolution will be and not what I think it should be.

I’m not here to cheerlead for the cloud. It doesn’t mean that I don’t believe in the promise of the cloud, or that I’m not interested in the segments of the market that aren’t represented by Gartner’s IT buyer clients (I’ve certainly been keeping an eye on developer-centric clouds, for instance), or that I don’t understand or believe in the fundamental transformations going on. But we’ve got to get there from here, and that’s doubly true when you’re talking to corporate buyers about what cloud-like stuff they want now.

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Posted on January 10, 2011, in Infrastructure and tagged , , , , . Bookmark the permalink. 12 Comments.

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