Why It's Time to Embrace the Cloud Now: IDC

By Chris Preimesberger  |  Posted 2011-03-16

Why It's Time to Embrace the Cloud Now: IDC

SAN JOSE, Calif.-IDC's frontman, Senior Vice President and Chief Analyst Frank Gens, sees a significant fork in the IT road in 2011 similar to one that happened 25 years ago.

Back in 1986, PCs and desktop computers were 5 years old and starting to work their way into daily use in dedicated enterprise networks and home offices, replacing typewriters and word processors. The Internet to connect them all was still a decade away, but the groundwork was already being laid for it.

"In 1986, mainframes and terminals were the standard. Coming up was a new class of end-user device (the PC) and new types of networks and computing platforms driven by the PC radically expanded the users-and uses-of IT," Gens told a full-house audience of about 1,200 in his keynote at the 46th annual IDC Directions conference here at the San Jose Convention Center March 15.

"IT companies looked at what was happening, made some strategic decisions and chose a direction. As you can imagine, some of them gauged what was happening correctly, and some did not. Now, 25 years later, we're again at a crossroads, and taking the correct path is as crucial now as it was then."

Gens (pictured), of course, was referring to traditional client-server computing versus new-generation IT based on on-demand software and services via the Internet, otherwise known as cloud computing.

Gens and IDC are convinced that now is the time that IT device and components makers, system providers, software developers and service specialists need to embrace the new IT combination model of public/private/hybrid cloud systems, mobile devices and on-demand services to prepare their products and services for buyers with these third-platform preferences.

The clear implication here: In 2011, it's either the cloud way or the highway.

Same Topics Discussed 25 Years Ago


Same Topics Discussed 25 Years Ago

"Back in 1986, we were talking about the same things we're talking about today: Are these new technologies powerful enough? Are they manageable enough?  Are they secure enough? Are they enterprise-worthy enough?" Gens said.

"Back then, some smart players sort of woke up and said, 'You know, these aren't just cool new technologies; they are in fact the foundation of the next generation of growth and opportunity.' They immediately began reconfiguring their business models and products to take advantage of this second platform, and jump on it and ride it."

Gens asked the audience if it remembered Cullinet, one of the first software vendors. Cullinet competed directly against IBM, making the IDMS database management system and the integrated software package Goldengate.

"Cullinet had a really good product for the first platform, but when it came to the second platform, they made a lot of mistakes," Gens said. "Goldengate was meant to compete with Lotus 1-2-3. But in 1986 they made a critical error: They decided not to sell this PC software package through PC retailers. You had to call up their direct sales rep to buy it. Can you imagine buying a $500-$600 software package over the phone?"

Cullinet had wanted to maintain account control. "It seemed like a strategy, but it played out as insanity," Gens said. "It was a disaster."

Digital Equipment Corp., which made highly regarded mainframes and terminals, is an example of a smart company that didn't grasp the client-server wave quickly enough.

"They were a company that was on the rise, they were challenging IBM, and the future was bright for them," Gens said. "But they made a lot of mistakes around that jump [missing the PC] that ended up dooming them."

Another company that took the wrong fork in 1986 was Wang Laboratories, maker of terminal-based computers.

"Wang was also a powerhouse of its time, but they also missed the PC," Gens said. "They took a first-platform mentality. They said, 'Well, we're late, so we'll use the latest, most powerful Intel chip,' but the problem with that was it wasn't binary-compatible with the first chip set applications. They thought they were going to blow the socks off the competitors with a powerfully performing new PC, but what they didn't get was that the users were buying the value of the ecosystem of all those apps."

They All Became Wikitrivia


They All Became 'Wikitrivia'

All three of those companies are now fading away in IT history. "You miss the jump on one of these platforms, and you become 'Wikitrivia,'" Gens joked.

Companies that did judge the important IT trends correctly in 1986, Gens said, were PC's Limited, EMC and SAP.

"PC's Limited was born on the second platform, like Amazon and Google today," Gens said. "By the way, in 1988, they changed their name to Dell Computer. They were doing something kind of weird at the time: selling PCs over the telephone. In 1986, they announced two things: money-back guarantees and next-day onsite service, so people could feel comfortable. And you know what? It worked."

In 1986, EMC-now the world's largest storage hardware maker-was a small company just about to hire the team that would design and build its Symmetrix enterprise product line.

"What was radical about that was, everyone else was building storage with these big, honking mainframe disks that cost a lot of money. But EMC said: 'Hey, look at all these small disks that are in PCs. They seem to be pretty cheap and work well; let's build a large-scale system by putting a bunch of these small disks together, and build some smarts around it so it works like a large-scale system.'"

That built EMC's wealth for the next two decades, Gens said. Symmetrix, though it has been through several transformations since the late 1980s, is still a mainstay of EMC's business.

On the software side, SAP was doing the same thing, Gens said.

"They were about to just redo the next generation of their ERP [enterprise resource platform] for mainframes, but they said, 'Hey, we should do it for the second platform. We'll do it client-server, we'll use PCs.' That became R/3, which led their growth for the next 20 years."

Another Jump to Make in 2011

OK, so companies made good or bad decisions 25 years ago, for better or for worse. What does this have to do with today's IT?

"It has a lot to do with us," Gens said. "In 2011, we are in exactly the same place. We are staring at a new group of disruptive technologies that is the new platform for the next 20 years.

"Like they did in 1986, we spent the last few years debating whether this cloud is secure enough, is it mobile, is it scalable enough, and how do you manage this stuff? How about social networks? It's good for teenagers, but it's not for enterprises-is it?

"I think there's now a critical mass of folks that are saying, 'It's time to stop arguing. This is the platform for the next several decades of growth. Let's start doing some pretty important things to bring this into the center of what we're doing.'" 

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