Clicky

How Fast Will Cloud Adoption Go AWS Chief
by Daniel Newman | July 13, 2022

The Six Five team discusses how fast will cloud adoption go AWS chief.

Watch the clip here:

If you are interested in watching the full episode you can check it out here.

Disclaimer: The Six Five Webcast is for information and entertainment purposes only. Over the course of this webcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.

Transcript:

Daniel Newman: Yeah, it was interesting, Patrick. This article is a few days old, but since it was a quieter week I pulled it out. And it’s really interesting because this conversation’s been happening more and more for me, and I think you, in Advisory, in different sessions, where we’re talking. And even that 30% that we hear 25, 30% of workloads being in the public cloud seems to be more reflective of all workloads, including things that aren’t enterprise workloads. Your homemade SAS type of, I say homemade SAS, like games and other things that people do. When you look at the IT, Adam actually said in the CNBC piece, call it 10%. And so it’s interesting because everybody’s been wondering, where are we on this cloud adoption journey?

Are we in the first inning? Are we in the fifth inning? We’re definitely not in the ninth inning, if you’re using baseball as an analogy. But Adam basically said it’s day one. And he used the number of 10%. And I’m like, huh, this is really interesting. And by the way, he goes really well with that topic we just talked about basically saying, the reason we’re only at 10% is because the vast majority of companies critical enterprise workloads are still run on prem. And you’re talking about the big database workloads, the big ERP workloads. And this is why this kind of symbiotic relationship across IT OEM’s, your HPE’s, Dell’s, IBM’s, Cisco’s, your software providers, Oracles and SAPs, and at Microsoft on their software side. And then your hyperscalers has become more of this inter web or intertwined web of a relationship that isn’t going to be like, hey, it was just as easy… We always kind of made the joke, swipe a credit card, spin up a workload and run your business, but that’s really not the case.

I mean, you’re seeing Salesforce building out a hyper force hybrid platform. You’re talking about a company that basically was born on the idea that you don’t need infrastructure now going back and saying, well, maybe in order to do things right you might need some infrastructure. You’re going to need a platform layer. You’re going to need to be able to connect to a third party. You’re seeing born on cloud data warehouses like Snowflake going to Dell and saying, hey, let’s work together so that your storage and our cloud based data warehouse can integrate seamlessly for the user. Bottom line is this is, he’s right. It’s early innings. And this is the beautiful thing that everybody I want to take away from this topic is, the cloud’s going to grow a lot. Public cloud is, and you just look at the growth metrics. You’re seeing Oracle over 30%, Google over 30%, AWS over 30% and Azure over 30%, and some closer to 50%.

And so we’re all living in this little cloud war. Who’s growing, and who’s growing the fastest, and what’s going on? Those are just some of the hyperscalers, but the point is that they’re all growing, and they’re all growing at a fairly good clip, and nobody’s eating each other’s lunch. And that’s the most interesting thing. Yes, the basic arithmetic on something like this is that if AWS is growing 40, and Google is growing 30, AWS is continuing to create a gap. But what I don’t think is happening as much as people want to believe is that these companies are trading out and swapping, and people are leaving one and moving to the other. It’s kind of an aggregate. It’s an additive where, there are people are adding workloads on other clouds to hit their multi-cloud strategies and B, they’re growing overall by strategically moving workloads and adding workloads that companies didn’t have before.

So like I said, the news piece was eh, small, but the idea that we’re at 10% of really the enterprise IT really struck me. And I thought Adam’s comments about being very early are really important for the market to understand, because the cloud maturity, while the tech has come a long way, enterprises have a very long way to go. The new architectures are not going to be all in cloud or all in prem, they will be hybrid, and companies like AWS have built a really great mouse trap. But you know what? There are many great mouse traps. And that’s going to create a bigger market, a more competitive workspace, more innovation. And I think even in our recessionary environment or the pullback environment we’re in, lots to believe that cloud will continue to grow.

Patrick Moorhead: You know, it’s funny, this was a CNBC article and interview with Kramer on Mad Money. When I first read the article, Daniel Newman, I thought that this was a warning in a way. Is this Adam saying, hey, our future growth won’t be there, but there’s a huge opportunity? There’s a lot to unpack here. And I hate to over rotate on what was said, but quite frankly, what Adam was talking about is been our talk track for a long time, which is, this is the very beginning of it. IBM uses a number that’s 75% of the data. I believe that, that 10% number is the amount of applications. Your Bank of America, you might have 5,000 applications that it’s going to take you time to move over.

But Adam is correct. This is the first inning of a cloud model, and cloud model essentially defined as an operating model and the type of open software that you use, whether it’s containers, whether it’s serverless. I’m kind of wondering if VMs in the cloud is a cloud model. But I think if you approach it from a Dev Ops model, I guess you could call that cloud. But to listen, it was nice to see Adam get out there and talk about it being the early innings. I was amused by the writer of this article, essentially not talking about the profitability that AWS brings into Amazon. All the writer talked about was the revenue that was-

Daniel Newman: 17%.

Patrick Moorhead: No, I know. Isn’t that funny? It’s completely disconnected from the reality.

Daniel Newman: What is that, 150% of profit?

Patrick Moorhead: It’s 100 plus. I don’t know the exact number. I track it every quarter, but I don’t have that in front of me. But anyways, I thought that was amusing.

About the Author

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio