The Cloud Market Is Wide Open for the Taking

open door

The enterprise market for open cloud is an open door

Recently I wrote about how public cloud is failing large enterprises. Despite the wild success of public cloud for consumer and SMB use cases, I noted, most research shows that enterprises are investing substantially more in private cloud than public cloud, because cloud service providers (CSPs) are failing to satisfy enterprise requirements for service assurance, security, compliance, billing, governance, etc.

Most people I spoke with agreed with this analysis, but some told me (and still others talked among themselves) that I could not be right. They have seen hundreds of enterprises that have adopted public cloud, they said. Relating their stories of such-and-such an enterprise they just did business with, or the hundreds of unnamed enterprises they recently sold to, they said that I must be wrong.

Of course, there are exceptions. At CA Technologies, we have many customers who have invested in public cloud in some fashion. There are several successful use cases, especially new web app development on cloud IaaS and PaaS. Many enterprises have some piecemeal adoption of AWS or Rackspace. SaaS adoption is strong, especially outside IT, with solutions like successfully attracting enterprise customers.

Then there are CSPs that are addressing enterprise demands. I am personally familiar with our customers and partners like ViaWest, Rackspace, Logicalis, Fujitsu, DNS Europe, Bird Hosting, and many others that add value (and competitive differentiation) to their public cloud offerings with enterprise-grade service assurance, security, etc. Importantly, many or all of these CSPs also offer hosted private clouds – an attractive option for large enterprises that splits the difference between public and private options.

However, for every story of enterprise adoption of public cloud, I have one for private cloud adoption. For every anecdote about AWS adoption, I cannot even count how many enterprise leaders (both IT and business) tell me they want their systems to be *like* a public cloud service, but they do not want to *use* a public cloud service.

Then there are cloud-native businesses like Facebook and Zynga that are choosing to run on private clouds; while Netflix (a vocal proponent and user of AWS), still runs a data center for mission-critical systems like their billing backend.

This then brings us back to the data – which is not only quite clear already, but is getting clearer.

For example, CA Technologies has just announced new research data that confirms this landscape. This new study says most CSP customers are opting for private clouds, with less than a third choosing public cloud. It highlights the same reasons too – security concerns are the top issue, with other maturity issues like billing, customer satisfaction, and regulatory compliance not too far behind.

The news is not all bad for CSPs though. The research actually shows a positive outlook. Nearly two-thirds of the CSPs surveyed said they have been successful with their business to date, and they expect to grow that business by almost a third this year. Interestingly, while many intend to grow through better marketing, many others are planning to offer new enterprise-relevant initiatives and offerings, such as industry-specific clouds and virtual private data center services.

I am still open to contrary evidence and data, but anecdotes and stories will not convince me when reliable research data does not back them up. Private cloud is ramping up much faster than public cloud. This imbalance is growing, not shrinking. Predicted adoption rates have not been realized. Public cloud is failing to satisfy enterprise requirements.

All of which means, by the way, that the opportunity for CSPs has fantastic upside. The demand for cloud is clearly there, and enterprises are spending substantial budget for the benefits of cloud computing. For CSPs that provide public cloud offerings that address enterprise requirements for management and security, the cloud market is still wide open for the taking.


This blog was originally posted on’s Cloud Storm Chasers blog