All datacenters aspire to what the cloud model delivers: becoming substantially less expensive and time consuming to procure, dramatically more agile and easier to manage. Information technology should be simple—your smartphone does not require thousands of pages of manuals or take weeks to get up and running; there’s no excuse for today’s information technology to be complicated and services-intensive.
This is why traditional on-premise IT is being so dramatically disrupted. We are seeing applications and workloads migrate from legacy infrastructure to a variety of cloud models, including Infrastructure as a Service (IaaS)—a.k.a. public cloud, Software as a Service (SaaS) and home grown clouds.
To better understand this seismic shift away from traditional on-premise IT, we turned to the experts at IDC, who provided the segmentation below:
Not surprisingly, IDC anticipates that by 2019 the majority of datacenter spend will be for technology that supports the cloud model as cloud segments grow and traditional on-premise IT shrinks. Public cloud services like Amazon Web Services (AWS) and Microsoft Azure will represent 12 percent of the market, while 39 percent is in other clouds. It is within these other cloud markets that Pure Storage has enjoyed substantial success to date:
- SaaS (B2B SaaS)– The largest market segment in cloud and perhaps the fastest growing is business to business (B2B) SaaS, led by vendors like Salesforce and NetSuite. SaaS has proved so compelling because it allows businesses to focus on what they do best —let Salesforce.com handle customer relationship management and salesforce automation so the business can apply its energies to what it does uniquely well. Today, Pure counts six of the top 20 SaaS companies as customers, including Intuit and Workday. Most importantly, all SaaS vendors we are interacting with are building in their own clouds as a core competency, to both save money at the scale at which they operate, and to differentiate their products relative to the competition.
- Consumer cloud– The SaaS model originates from the success of consumer internet applications (think B2C SaaS). Facebook operates far larger cloud datacenters than the SaaS providers. Many consumer clouds are using Pure Storage, including LinkedIn and Shutterfly. While there are consumer services that reportedly rely predominantly on AWS, such as Netflix and Airbnb, we believe that the large majority of consumer web properties are building their own clouds for the same reasons cited above (IDC is only counting such homegrown consumer clouds in the summary above).
- Hosted cloud – Businesses like Secure24 and Armor, as well as numerous other service providers, offer IaaS or PaaS to their end user customers using Pure Storage. These vendors are differentiating from larger public cloud offerings with higher performance, stronger security, higher quality of service or richer customization than afforded by the public cloud today.
- Private cloud – Last but by no means least, many of Pure’s larger customers employ the cloud model in their own datacenters. End users like Samsung and Nielsen operate at a scale and sophistication that demands datacenters that compare to those of our SaaS or consumer cloud customers. Why build their own? Often these businesses have constraints that prevent them from moving key workloads to the public cloud:
- Large data sets need to be processed close to where they are generated (“big data is bigger than big networks”);
- Applications and storage need to be close to the systems they interact with (manufacturing equipment, financial exchanges for high frequency trading);
- Virtual desktop infrastructure (VDI) and other performance-intensive applications need to be close to the users they serve; or
- Regulatory constraints or specialized security requirements in verticals like healthcare, finance, legal and government may preclude the public cloud.
The other key reason for building your own cloud is that it can save money if the business operates at scale. Pure Storage is more efficient in hardware utilization (>5X data reduction, no dual mirroring and high-availability rather than multiple servers) than public cloud performance storage, and the business can avoid paying the more than 30 percent mark up on power, cooling, floor space and operations.
What about public cloud? While Amazon, Microsoft and Google preside over three of the largest datacenter footprints in the world, they represent a minority of cloud-oriented datacenters. Keep in mind, much of this footprint is consumer cloud (Amazon eCommerce, Google Search & YouTube) and SaaS (Microsoft Office 365, Gmail for Work). To be clear, significant portions of the cloud market are not available to us or to our competitors, as we expect hardcore do it yourselfers such as Google and Amazon are going to continue to make their own storage. Meanwhile, we will continue to focus on the enormous cloud market that is available to Pure.
Rethinking datacenter storage. Immensely exciting and turbulent times lay ahead for datacenter storage. Legacy storage solutions, designed more than twenty years ago, are being rendered obsolete by the dual disruptors of flash memory and the cloud (see our recent blog This Is Your Father’s Storage Industry, But Not for Long). Pure Storage, with principal talent from Apple, Google and Facebook, crafted its storage platform in anticipation of both flash and cloud disruptions. The fight is on to see which storage solutions will deliver the most compelling value in this new environment.
Storage customers and partners: please do your homework on your prospective vendor’s storage technology and business model. Simply continuing to buy from your current vendor is too risky given the multi-dimensional disruption underway.