Summary

AWS has been growing exponentially for more than a decade now, but enterprise IT operations are not dead yet, what’s going on?

A market split in two

  • The enterprise infrastructure customer base is static, and consists almost entirely of old legacy enterprises
  • The enterprise vendors maintain revenue by increasing prices and because many of their customers are in fact growing
  • Old, large enterprises have been steadily growing for decades, while there has been a global lack of new, large enterprises
  • Existing customers are mostly unable to move their workloads to IaaS cloud providers because of various barriers
  • Legacy IT workers in general have neither the authority, the skills nor the motivation to move existing workloads to the cloud. They can however also not be fired, since they are needed to maintain the legacy infrastructure, which the enterprise depends on.
  • Management typically hires external consultants to move legacy workloads to the cloud. The technical operations are not particularly complicated, but external consultants have little chance of success without support from legacy IT.
  • For obvious (and sometimes even valid) reasons legacy IT often successfully puts up barriers to placing new workloads in the cloud (security, compliance, licensing, performance, cost).

Why did enterprise IT vendors not engage AWS?

What about Open Source?

What about Europe?

What about the hosting industry?

Market analysis

  • AWS owns the 50 billion USD IaaS market for workloads from cloud-natives, startups and developers
  • The barrier to entry is high, but new entries to this market are still possible, as proven by Digital Ocean
  • This absolutely requires the efficiency and low cost of Open Source, and is not possible using enterprise technology
  • VMware still owns the 100+ billion USD market for legacy enterprise workloads
  • No IaaS vendor has directly catered to this market so far
  • Lift-and-shift operations are being driven by management hiring consultants and are largely failing
  • Recoding of legacy applications is not happening much

What is “enterprise infrastructure”?

How big is the addressable enterprise infrastructure market?

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Christian Orellana

Christian Orellana

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Danish entrepreneur working with digital infrastructure, and cloud computing. Analytical approach, creative outcomes. Take care — christian@orellana.dk