CIO2CIO Blog

Cloudy Days Ahead for Cloud Computing

Analysts from Forrester have expressed some less-than-encouraging predictions for IT departments building their first private clouds: You're not likely to succeed. But Forrester analysts insist "that's a good thing," because the failure will pave the way for later success but more importantly pave the way for more positive outlook for IaaS (infrastructure-as-a-service).

"Most of these enterprises aren't ready for a private cloud’, but we expect that in 2011, I&O [infrastructure and operations] departments will start building them regardless. These efforts will most likely fail, but through this failure will come valuable experience and knowledge about what it really takes to create and operate a cloud environment," Forrester analysts James Staten and Lauren Nelson write in a new report called "2011 Top 10 IaaS Cloud Predictions for I&O Leaders."

No the Database War Ain't Over Yet

Some will tell you that Microsoft is slowly inching into the enterprise; others consider IBM’s relative silence about its flagship DB2 as a sign of giving up or loss of interest but the majority will agree that Microsoft is dominating the SME and Oracle is dominating the enterprise database market. That of course is not a great picture for CIOs who want to have more choices and need to see more competition in order to keep the cost down.

According to analysts the $20 billion database market is still growing at around 15% annually, Oracle is leading the pack with some 45% market share followed by IBM and Microsoft at 22% and 18% respectively. The top three vendors combined account for 85% of the market leaving everybody else to fight for the remaining 15%. That is a clear sign of market maturity, so from now onwards you should expect some mergers and acquisitions in that space. Surely a less competitive market can lead to less product innovation, another worry for today’s CIOs.

The Role of the Group CIO

The Middle East and maybe more so the Gulf region is familiar with the concept of business groups or conglomerates, mostly very large and highly diversified family businesses operating in anything from manufacturing to tourism and from construction to retail. The examples are many, like Al Ghanim in Kuwait, Al Futtaim in the UAE or Bahwan in Oman.

Historically, group companies tended to operate independently and share nothing but maybe the family name, but the last 10 years or so have seen a shift towards stronger group level management, control and resource sharing especially in the areas of finance, HR and IT. Many such groups now have group level CFOs and CIOs who are truly and fully responsible for their respective areas not only at the group level but also at the operating company level. This shift has been mainly driven by the need to establish better financial reporting and controls, stronger treasury management and bank relationships, more systematic sharing of standards and best practices as well as the desire to lower the cost and improve the efficiency of IT.

2010 Year in Review

As we welcome 2011 and say good bye to 2010, I wanted to take a look at some of the major IT industry events and developments that took place during the last year.

Mergers and Acquisitions Frenzy

IBM, Oracle and HP continued their respective shopping sprees in 2010 leading Gartner to refer to them as ‘Super Vendors’ and to warn against the impact of this trend on the levels of innovation and competitiveness in the industry. Google has made over 20 acquisitions in 2010, Cisco has somewhat slowed down its acquisition drive while Microsoft appears to have made just one acquisition. On the European side, Atos/Origin is taking over Siemens IT services business. 2011 could be a banner year in terms of IT acquisitions given the large amount of cash accumulated by the major players in IT due to their increased earnings. . The M&A rumor mill has recently revolved around HP-SAP, Oracle-EMC and SAP-RedHat, none of which has materialized yet.

Datacenter Challenges

The ever increasing requirements to deploy new applications and to support larger numbers of users coupled with legacy applications that do not share resources running on energy-hungry outdated servers that are sized to handle peak workload have lead many IT organizations to face a space, power, and cooling crunch and have pushed datacenters to their limits of space and energy consumption. Many datacenters built to last for 10 to 15 years have reached a premature end of life because they were not meant to support the growth that has actually taken place. The lack of flexibility caused by populating datacenters with what is now outdated, inefficient hardware has also begun to affect business agility.

Inefficiency can be difficult to address because facilities organizations don’t always understand—or even believe in—the ever-increasing power requirements of IT organizations. Conversely, IT organizations typically don’t understand the time and expense required to implement power and cooling infrastructure to support higher-density datacenters.