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Thursday, April 15, 2010

Internet Redux?

I found yesterday’s post to this blog particularly interesting. It highlights once again that while there is a lot of noise being made about cloud computing, no one can quite pin down a definition that works for everyone. In fact, it seems that some people don’t even believe that there is something called cloud computing, claiming it’s nothing more than a fancy way of describing what’s been happening on the Internet for years now.

I think the reality is somewhere in between. Cloud computing is an extension of some of the ways people have used the Internet for many years, but it’s also much more than a new way of looking at old methodologies.

Recently I had separate lunch meetings with two friends of mine who work for Hitachi Global Storage Technologies and VMWare. Both are very large global companies that have deep experience in enterprise IT so I figured that they’d have an opinion about cloud computing. I asked both of them how their companies view cloud computing and how important it is to the future of their perspective companies. Both had very similar responses.

Hitachi has three primary businesses on which it focuses – enterprise, OEM and consumer. According to my contact, the cloud will factor into all three. In the enterprise business, many companies are building their own internal private clouds and need increased mass storage. For those enterprises moving to public clouds, they often want to know what type of storage devices are being used to house their valuable corporate data. Where data resides is an important component to any company’s decision to move to the cloud, for security, compliance and back-up concerns.

Hitachi’s OEM customers put drives into many different types of machines for a variety of applications, but increasingly, according to my friend, the OEM’s are asking specifically about cloud computing applications. “The drives we sell to OEM’s are important, but how we help them custom build systems for their customers is also important. We have to understand the cloud to effectively market and sell to our OEMs so they in turn can sell to their customers.”

As for the consumer business, end users are storing more and more valuable information in the cloud. For instance, one consumer I know had all of her 1000 plus pictures of her young son stored with Shutterfly, which is essentially an end-user application for storing photographs and videos in the cloud. This woman is nervous that all of her pictures were being stored “somewhere out in the ether,” as she called it, so she bought a 500 GB external hard drive to back up all of her photos. Marketing to this type of customer is something Hitachi sees as an important growth opportunity.

In all three instances – enterprise, OEM and consumer – Hitachi has to understand how cloud computing is impacting customers’ behavior in order to effectively market to them. “The cloud isn’t our only focus,” my friend at Hitachi told me, “but it’s rapidly becoming the most important area for our marketing efforts.”

The same thing is basically true for VMWare. Many analyst firms and cloud computing "gurus” often list VMWare as one of the top 5 to 10 cloud computing companies based on its strong position in the virtualization market. They may be surprised to learn that the company didn’t make a decision to go “all in” on cloud computing until December 2009, according to my friend at VMWare,.

“We view cloud computing as fundamentally changing the way business is done, similar to the way the Internet changed business 10 or 15 years ago,” he told me.

That’s why VMWare spent four months hammering out a corporate strategy and corresponding marketing program designed to address cloud computing before it rolled it out to the industry in March 2010. VMWare understands that its customer base is migrating to cloud computing and therefore it must respond accordingly.

“Every aspect of our marketing efforts now take the cloud into account,” my VMWare contact told me. “Be it private cloud, a public cloud solution or some type of hybrid. To ignore the cloud is like ignoring the Internet. That just doesn’t make business sense.”

The debate about the definition of cloud computing will surely rage into the future. What is clear, however, is that cloud computing is real, and that if companies don’t factor it into their marketing programs they are likely to lose customers. Just as those companies in the mid-1990s that buried their heads in the sand and pretended that the Internet was just a “trend” ended up either in the scrap heap or left far behind by more forward-thinking competitors.

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