Cloud Adoption Picking Up, Says Rackspace CEO
July 16, 2012
Grazed from The Wall Street Journal. Author: Editorial Staff.
Despite the advantages cloud computing can offer larger enterprises, adoption continues to be slow.
Lanham Napier, CEO of Rackspace, predicts the take-up of cloud systems will accelerate. But he warns the industry has to innovate or risk being commoditized itself. Mr. Napier said infrastructure-as-a-service, or IaaS, was the most widely used service as it was the easiest for the market to understand, but that it was a “race to the bottom.”
“If all you are selling is a [gigabyte] of computing power, you are in trouble,” he said. “The big boys are in a race to zero. They are trying to drive that price down to halfpennies.”…
IaaS refers to the idea of companies outsourcing their hardware needs to specialist cloud providers. The provider owns the equipment and the client typically pays on a per-use basis.
“IT departments spend between 70% and 80% of their budget running infrastructure,” Mr. Napier said.
“The IT department of the future will look a lot more like a development shop, working on things that only the IT department can do to make the company more competitive, not in looking after equipment.”
While there are currently a large number of cloud providers, Mr. Napier suggested that consolidation was inevitable. Coupled with that was a risk of commoditization. Mr. Napier said that for providers to survive they must work up the value chain, providing more and better services, and not just raw computing power.
A 2011 report by security vendor Symantec suggested that while interest among enterprises in cloud is high, few organizations have crossed the finish line. Still, the report said that between a fifth and a quarter of respondents weren’t even considering a move to cloud computing.