9 ms·

Dell, EMC, HP, Cisco are the walking dead

60 points by flying_whale 11y ago

rvense 11y ago
Fucked by Cloud and Fucked by Mobile are also apt terms to describe privacy...
ThomaszKrueger 11y ago
I read somewhere that the cloud is just someone's else computer. At least in the business I am working with that would never be allowed so if there is a cloud to be had it will be on premises, which may keep these so-called walking dead lumbering for quite some time.
- adrianN 11y ago
  Yes, there are plenty of businesses which would never put their data on someone else's servers. Also, you should never underestimate corporate inertia. Switching to a new system is immensely expensive, for many companies it won't happen, ever. Just look how many companies are still using decade old hardware and scour ebay for replacement 286 processors.
  - mkozlows 11y ago
    This isn't an argument against them being the "walking dead." If nobody was using them anymore, they'd just be the dead-dead. The "walking" part comes from their existing support base propping them up. "Oracle and EMC are fine, just like 286s!" is not an argument that would comfort an executive at those companies.
  - Karunamon 11y ago
    How much of that immense expense is due to various factors that can be summed up as "obstinance", and how much is due to actual, practical, tangible factors? I'm not being snarky - I've seen many a large business make many a horrible decision, not due to a dispassionate evaluation of the pros and cons of each option, but because the people in charge hate change. And it's not that said change would be necessarily painful or demonstrably bad, it's an irrational bias. Change hate appears to scale linearly with organizational size, more specifically, number of managerial staff.
    - deleted 11y ago
      [deleted]
- tlogan 11y ago
  This article simplifies that problem is that these companies are "fucked by cloud". As you pointed out many companies will never migrate to cloud - never. But they will not buy expensive storage from EMC or expensive network equipment from Cisco. It is not only about cloud. It is that these companies did not evolve to match current needs: it is about sales process (just try to buy cloud from Oracle and you will see), it is about support, it is about pricing, it is about technology (SOAP?) ...
- creshal 11y ago
  Even if I wanted to put everything into the cloud, our main office has 2 MBit upload on a good day, with no infrastructure improvement in sight (old building on top of a hill in rural Austria). And even our branch office only gets 10/10 MBit in the middle of the country's second-largest city. We're going to keep local servers for a looong time to come.
- sjg007 11y ago
  A lot of these are compliance legal reasons, but you know what.. the laws can change! Even the government is using AWS now.
damian2000 11y ago
It could take a while yet before all companies big and small start using the cloud to its full potential though ... in my experience people in management are usually against it, citing data security issues.
- iheartmemcache 11y ago
  You'd be surprised. I've contracted for the some 3 letter federal agencies and they're alright with certain material being hosted in the cloud. (1) We didn't use AWS but they were fine with standard RSA keys. MS/IBM realizes the discomfort management has though, and addresses it with "partial virtualization" solutions. 1: https://aws.amazon.com/federal/ https://aws.amazon.com/federal/
  - damian2000 11y ago
    Part of it is being outside the US as well- there is a reluctance to keep sensitive data on servers owned by a foreign company. Attitudes are changing though ... MS and Amazon for example have a really good presence in Australia these days.
clavalle 11y ago
The magic cloud. Good thing it is made of fairy dust rather than commodity servers and network equipment or Dell and Cisco might be around forever providing those things.
- mkozlows 11y ago
  Facebook and Google and Amazon do not use Cisco networking equipment, nor do they use Dell servers: http://www.wired.com/2014/11/facebooks-new-data-center-bad-news-cisco/ http://www.wired.com/2014/11/facebooks-new-data-center-bad-n... That's basically the point of the article: These companies that actually had to get up to that kind of massive scale quickly discovered that the way hawked by these big expensive "enterprise" companies didn't work. It was expensive and insufficient. So they've developed their own custom stuff (often built on open source; sometimes open sourced back out) that works a lot better while also being massively cheaper. AWS isn't just a bunch of Dell servers hooked up to EMC SANs and Cisco switches. The only people who still use that stuff are people who a) have a ton of money and a desire to spend it freely, plus b) don't have really serious demands, which would mandate something better. That's not a good place to be.
  - noir_lord 11y ago
    Oth there are thousands (probably millions) of companies out there where cisco kit would be just fine. Very few companies have the kind of network requirements of Facebook or Google.
    - mkozlows 11y ago
      So the thing is, yes, that's true. Lots of companies can get by with Cisco/Dell/EMC stuff and don't need the ultra-high-end datacenters of Amazon/Google. And if Cisco/Dell/EMC stuff was bargain-priced and the ultra-high-end stuff was expensive, well, there you go. But the problem is, if you want your stuff hosted on Amazon-class hardware/network topologies, it's really cheap to do so with AWS (or Azure, or whatever). And the Cisco/Dell/EMC stuff is painfully, ruinously expensive. If the high-end thing is also the cheap thing, what's the rationale for buying the low-end, expensive thing?
iheartmemcache 11y ago
This is such a perception skewed by Silicon-Valley-Syndrome. This is how the rest of the world works -- I run an import/export business and have to manage logistics. It doesn't matter what industry, it could be crude oil or widgets from China at half a penny a piece. It's my job as CIO to choose an implementation. I'm going to choose SAP or Dynamics (or one of the handful of other ERP's with name recognition) on DB2 or Oracle. I'm going to store my data on EMC dual array filers for HA and pay the tax. Why? Because if I choose node.js and MongoDB to run my 3 warehouses and the system goes down, I'm getting voted out next board meeting. If my SAP R/3 on IBM hardware goes down, they'll do the dance and at least fly some people out to retain their image keeping your job effectively safe. Banks aren't going to move over from z/OS anytime soon. I don't want my dialysis machine to be running on Riak.
- mkozlows 11y ago
  So two things: 1. Cloud providers are making it easy for legacy businesses to take baby steps. You don't have to use a NoSQL solution with AWS Dynamo, you can use Postgres with RDS. Or if you're hyper-conservative/stuck with legacy stuff, you can run Oracle with RDS. Or get an EC2 instance and install your own personal copy of Oracle on it. You don't have to jump to full modernity right away, you can take the easy wins of hosted infrastructure first, and only later move up to the bigger wins of hosted platforms. 2. Yes, legacy stuff takes forever to disappear. There are still businesses running VMS inside of VAX emulators with COBOL apps on them. But once you're in that "super-conservative businesses won't move away from you anytime soon" area, you're in a declining market. New businesses unencumbered by legacy won't go down that road -- small businesses starting today will never buy an on-site server to start with (thanks to Office 365/Google Apps/etc.), and as they grow there's no reason for them to change that policy anymore. EMC might never get a new customer, and even if they keep their old ones for some time, it's just a question of how fast their decline is.
  - evook 11y ago
    Working at real scale, I'd choose some cages in a datacenter I can walk in and place offices at over AWS anytime. Btw you'd cry if I were allowed call out some companies that still run lotus notes.
anjc 11y ago
Wtf is this article talking about? Microsoft fucked because they have Windows on 95% of computers? Agh, i'm too exasperated to continue my train of thought. Yes, everybody is fucked because of Facebook and Google and MongoDB.
- fredkbloggs 11y ago
  There's a lot of stupidity here (or perhaps one might charitably call it excessive glee, or even plain old clickbait), but it's been a long time since 95% of computers ran Windows, if that was ever true in the first place. You'd have to start by defining "computer". If we use a technically reasonable but broad in journalism's terms definition of "device containing a CPU with integrated MMU", then we're including every mainframe, server, desktop, laptop, smartphone, tablet, industrial control system, laser printer or multi-function document management system, router, network or storage switch, storage system controller, sound mixer, and countless other devices. A very small and diminishing fraction of those machines run Windows. Even if you limited the definition to include only things we traditionally think of as computers, namely mainframes, servers, desktops, and laptops, Microsoft's market share is something like 30%, though it's very difficult to measure and once again subject to definition; see https://en.wikipedia.org/wiki/Usage_share_of_operating_systems https://en.wikipedia.org/wiki/Usage_share_of_operating_syste.... And again, that's been declining for a long time. Even the most generous interpretations that include only desktops and laptops don't get you to 95%; you can narrow-definition your way up to about 90%, and that assumes "market share" includes copies that were made in violation of license and/or law (and thus for which Microsoft received no money). The reality is that Microsoft is a niche player, not because they lost a market they were previously winning but because that market itself became a small part of something much bigger, in which Microsoft was never especially competitive. As noted by the author, they've been investing heavily in changing that, but the early returns aren't much to talk about. Windows Mobile/Phone is a complete dud, Surface is a weak seller despite recent improvements, and Azure is at best a very distant second in IAAS (see http://www.datacenterknowledge.com/archives/2015/05/28/gartner-aws-pulls-further-ahead-in-iaas-cloud-market/ http://www.datacenterknowledge.com/archives/2015/05/28/gartn...). What's remarkable is not that Microsoft is doing so poorly but that they're the only enterprise computing company that even appears to be trying. I think that's what the author was expressing. The characterization as "fucked" comes from Ashlee Vance and should be given the credibility one would assume considering the source. There's little question that most of these companies' positions of relative importance are in decline and have been for a long time. But some, especially Microsoft, still have enormous sums of cash and businesses that are continuing to generate more of it. However irrelevant such a company is, it's still a long way from going out of business. Conversely, no amount of cash is a substitute for organic sales growth.
ap22213 11y ago
First thing I thought when reading the headline was 'so is Oracle'. Glad it's mentioned in the article. AWS is absolutely killing it. Every release cycle, they put out quality products that directly attack Oracle. And, Oracle is in the bad position of having to eat their existing profitable business lines to compete. Now, of course, cloud isn't here yet. There are certainly lots of issues around security, auditing, privacy, data ownership, etc. But, the trend is accelerating. Why? Because the cloud is so much cheaper. Why maintain and manage your own data center and infrastructure for millions of dollars when you can reliably outsource for a fraction? I used to do a lot of work in the utility industry. I remember years ago giving a presentation on the cloud. The audience was passionate that it'd never, ever happen to them. They were extremely protective of their data. But, then I slowly saw it happening anyway. It crept in slowly. The first to go were the lowest risk systems. Then, the next lowest risk systems. Then, the next. The incumbents will hold position for a long time to come, propped up mainly by government spending, hellishly long sales cycles, a corporate aversion to micro products, and FUD. They have plenty of time to catch up. But will they? That's the question. Unless oracle is actively researching new cloud platforms (and I'm guessing they are), they're going to be in pain in 5 years. Corporations that don't move to the cloud will be in a cost disadvantage. On the other hand, serious work needs to be done to overcome the severe limitations of the current cloud. Lots of certification and auditing and risk assessments and SLAs need to happen.
- exelius 11y ago
  Oracle is not quite as fucked as everyone else on the rest of the list. Oracle has the benefit of offering products that solve very real, very complex business problems: they aren't selling technology infrastructure. Oracle's core products are largely around financial and operational automation, and they are well understood by integrators across many industries. Their biggest threat is something like Salesforce -- but even then, the capital cycle for ERP systems is something stupid like 15-25 years. IBM is largely in the same boat as Oracle, albeit with slightly more government focus. Oracle is ultimately a software company. Where their customers run that software is largely irrelevant to their core business. Is there margin to make by running an Oracle cloud? Sure, but the bulk of their profits are made just by licensing their LOB software packages and the associated annual support contracts. Oracle will be fine, and Larry Ellison will be able to buy an even bigger yacht in a decade.
exelius 11y ago
They're the walking dead because they pursued scale over innovation. Once they had achieved scale, they found themselves with too much momentum to innovate. So because they couldn't innovate, they built an army of consultants to hawk their wares to customers who also valued scale. But that consulting business never really took off because its existence was predicated on a model of dumping obsolete (but "enterprisey"!) hardware/software onto customers already suffering from vendor lock-in. When those customers start to struggle (as they inevitably will, because the tech industry is far from the only one where scale can impede your ability to innovate) the market has moved on to a different place, and the company never kept up. Then you see a death spiral of layoffs and divestitures that destroys 50-90% of shareholder value. Sound familiar? This fate awaits all these companies: - Dell: I don't even know what Dell makes anymore. I guess they sell PCs, servers and consulting services to small businesses that don't know any better. But this market is being eroded by an army of local MSPs and resellers, and it's not a model that benefits from scale. - HP: HP has been a disaster for a while, but they will probably endure since their hardware is generally pretty good and reasonably priced. But servers and printers are not a very high-margin business, and that's caused their leadership to be constantly on the hunt for a newer, higher-margin revenue stream. - EMC: Storage is increasingly distributed, and EMC's centralized storage solutions really are a dinosaur in today's market. They just make the wrong product and never found anything to replace it. - Cisco: By all rights, Cisco shouldn't be on this list given that the Internet still largely runs on their hardware. But they convinced themselves they were a consulting company, and that ran off all their good engineers. Cisco today is a shadow of its former self.
- hitekker 11y ago
  What would be your opinion on Oracle? I find it strange that the Author didn't include Oracle in the title although he talks about it at some length in the article body.
  - exelius 11y ago
    I gave my opinion on Oracle elsewhere in this thread. Basic just is that Oracle will be fine because they're a business software company -- all the companies on this list are manufacturers of technology infrastructure products. The model through which companies acquire tech infrastructure is changing from a product model where infrastructure companies build/design differentiated products to a services model, where a much smaller number of companies are buying increasingly commoditized infrastructure hardware and selling access to it as a service. Oracle doesn't do this; the bulk of their value comes from software that is much more difficult to replicate.
vinceyuan 11y ago
> They couldn’t use servers from Dell and HP and IBM. Does Amazon buy servers from Dell, HP or IBM?
devit 11y ago
The problem of these companies is that they sell highly overpriced hardware that is in the best case sold because the consumer really wants support and risk avoidance, in the middle case because of vendor lock-in and in the worst case because of direct or indirect corruption. Obviously this is not economically efficient, and thus eventually the scheme has to unravel.
- creshal 11y ago
  Overpriced, really? Dell sells desktop boxes sufficient for office work with three years on-site support for under 400€, and fast servers for under 1000€ kitted out. If that's overpriced I really need to talk to your hardware supplier. (Of course, they all have high-end products, but the breadth of the offerings is usually high enough that they're always an option. They're not stupid.)
  - devit 11y ago
    Indeed, this is not true for a substantial portion of Dell's products.
a3voices 11y ago
Reminds me of when Peter Thiel called them the "Technology Rust Belt" in a talk.
rtets 11y ago
"I think there is a world market for maybe five computers." Thomas Watson, president of IBM, 1943 "Nuclear-powered vacuum cleaners will probably be a reality within ten years." Alex Lewyt, president of Lewyt vacuum company, 1955 "Two years from now, spam will be solved." Bill Gates, founder of Microsoft, 2004
ausjke 11y ago
This is a reasonable forecast, those big-irons will not go away soon, and they will be needed for a long while, it's just the booming age for them are indeed numbered. While reading this I was thinking, where does Apple fit? Does it have any big plan for enterprise at all?
darmok 11y ago
I was hoping for an informative well-written article. Alas, I was to be disappointed. Ignoring the juvenile profanity and the condescending rhetoric, the author completely misdiagnoses the technology shift that will be the real game changer ... namely, the advances in memory architecture. Whether it's memristors or Xpoint 3D or some other architecture, data storage will be completely turned on its head over the next 10 years. The lumbering giants (who bring in 4 times more in net profit in a single quarter than Pure Storage garnered in its IPO) will have to be nimble in the future, but I wouldn't call them the 'walking dead' just yet.
- jb613 11y ago
  The point of exactly how profitable the "walking dead" are is vastly underrated. The decision is between making giant profits now with low-risk VS miniscule profits but potentially large future profits with high-risk.
tw04 11y ago
The irony of this is that all of the "cloud providers" still buy gear from traditional IT vendors like Dell, EMC, HP, and Cisco for their own internal corporate IT. It's the dirty little secret that somehow always gets overlooked when everyone is espousing how we no longer need infrastructure when it can all just "Live in the cloud".
- payne92 11y ago
  Uh, no. For one example, see: http://www.opencompute.org/ http://www.opencompute.org/
  - tw04 11y ago
    And that's proof of what? Opencompute is for building out their clouds, not their internal IT.
    - payne92 11y ago
      You may be confusing OpenStack with Opencompute. Opencompute is a set of hardware designs for high-scale data centers that came out of Facebook. See: https://en.wikipedia.org/wiki/Open_Compute_Project https://en.wikipedia.org/wiki/Open_Compute_Project
jb613 11y ago
The fact that Cobol is still alive and kicking illustrates that once in place, large systems are hard to replace. Costs and budgets matter too. EDIT: why did this get downvoted - am I factually incorrect or you simply disagree and want an echo-chamber?

60 points by flying_whale 11y ago

Fucked by Cloud and Fucked by Mobile are also apt terms to describe privacy...

I read somewhere that the cloud is just someone's else computer. At least in the business I am working with that would never be allowed so if there is a cloud to be had it will be on premises, which may keep these so-called walking dead lumbering for quite some time.

adrianN 11y ago
Yes, there are plenty of businesses which would never put their data on someone else's servers. Also, you should never underestimate corporate inertia. Switching to a new system is immensely expensive, for many companies it won't happen, ever. Just look how many companies are still using decade old hardware and scour ebay for replacement 286 processors.
- mkozlows 11y ago
  This isn't an argument against them being the "walking dead." If nobody was using them anymore, they'd just be the dead-dead. The "walking" part comes from their existing support base propping them up. "Oracle and EMC are fine, just like 286s!" is not an argument that would comfort an executive at those companies.
- Karunamon 11y ago
  How much of that immense expense is due to various factors that can be summed up as "obstinance", and how much is due to actual, practical, tangible factors? I'm not being snarky - I've seen many a large business make many a horrible decision, not due to a dispassionate evaluation of the pros and cons of each option, but because the people in charge hate change. And it's not that said change would be necessarily painful or demonstrably bad, it's an irrational bias. Change hate appears to scale linearly with organizational size, more specifically, number of managerial staff.
  - deleted 11y ago
    [deleted]
tlogan 11y ago
This article simplifies that problem is that these companies are "fucked by cloud". As you pointed out many companies will never migrate to cloud - never. But they will not buy expensive storage from EMC or expensive network equipment from Cisco. It is not only about cloud. It is that these companies did not evolve to match current needs: it is about sales process (just try to buy cloud from Oracle and you will see), it is about support, it is about pricing, it is about technology (SOAP?) ...
creshal 11y ago
Even if I wanted to put everything into the cloud, our main office has 2 MBit upload on a good day, with no infrastructure improvement in sight (old building on top of a hill in rural Austria). And even our branch office only gets 10/10 MBit in the middle of the country's second-largest city. We're going to keep local servers for a looong time to come.
sjg007 11y ago
A lot of these are compliance legal reasons, but you know what.. the laws can change! Even the government is using AWS now.

damian2000 11y ago

It could take a while yet before all companies big and small start using the cloud to its full potential though ... in my experience people in management are usually against it, citing data security issues.

iheartmemcache 11y ago
You'd be surprised. I've contracted for the some 3 letter federal agencies and they're alright with certain material being hosted in the cloud. (1) We didn't use AWS but they were fine with standard RSA keys. MS/IBM realizes the discomfort management has though, and addresses it with "partial virtualization" solutions. 1: https://aws.amazon.com/federal/ https://aws.amazon.com/federal/
- damian2000 11y ago
  Part of it is being outside the US as well- there is a reluctance to keep sensitive data on servers owned by a foreign company. Attitudes are changing though ... MS and Amazon for example have a really good presence in Australia these days.

clavalle 11y ago

The magic cloud. Good thing it is made of fairy dust rather than commodity servers and network equipment or Dell and Cisco might be around forever providing those things.

mkozlows 11y ago
Facebook and Google and Amazon do not use Cisco networking equipment, nor do they use Dell servers: http://www.wired.com/2014/11/facebooks-new-data-center-bad-news-cisco/ http://www.wired.com/2014/11/facebooks-new-data-center-bad-n... That's basically the point of the article: These companies that actually had to get up to that kind of massive scale quickly discovered that the way hawked by these big expensive "enterprise" companies didn't work. It was expensive and insufficient. So they've developed their own custom stuff (often built on open source; sometimes open sourced back out) that works a lot better while also being massively cheaper. AWS isn't just a bunch of Dell servers hooked up to EMC SANs and Cisco switches. The only people who still use that stuff are people who a) have a ton of money and a desire to spend it freely, plus b) don't have really serious demands, which would mandate something better. That's not a good place to be.
- noir_lord 11y ago
  Oth there are thousands (probably millions) of companies out there where cisco kit would be just fine. Very few companies have the kind of network requirements of Facebook or Google.
  - mkozlows 11y ago
    So the thing is, yes, that's true. Lots of companies can get by with Cisco/Dell/EMC stuff and don't need the ultra-high-end datacenters of Amazon/Google. And if Cisco/Dell/EMC stuff was bargain-priced and the ultra-high-end stuff was expensive, well, there you go. But the problem is, if you want your stuff hosted on Amazon-class hardware/network topologies, it's really cheap to do so with AWS (or Azure, or whatever). And the Cisco/Dell/EMC stuff is painfully, ruinously expensive. If the high-end thing is also the cheap thing, what's the rationale for buying the low-end, expensive thing?

iheartmemcache 11y ago

This is such a perception skewed by Silicon-Valley-Syndrome. This is how the rest of the world works -- I run an import/export business and have to manage logistics. It doesn't matter what industry, it could be crude oil or widgets from China at half a penny a piece. It's my job as CIO to choose an implementation. I'm going to choose SAP or Dynamics (or one of the handful of other ERP's with name recognition) on DB2 or Oracle. I'm going to store my data on EMC dual array filers for HA and pay the tax. Why? Because if I choose node.js and MongoDB to run my 3 warehouses and the system goes down, I'm getting voted out next board meeting. If my SAP R/3 on IBM hardware goes down, they'll do the dance and at least fly some people out to retain their image keeping your job effectively safe. Banks aren't going to move over from z/OS anytime soon. I don't want my dialysis machine to be running on Riak.

mkozlows 11y ago
So two things: 1. Cloud providers are making it easy for legacy businesses to take baby steps. You don't have to use a NoSQL solution with AWS Dynamo, you can use Postgres with RDS. Or if you're hyper-conservative/stuck with legacy stuff, you can run Oracle with RDS. Or get an EC2 instance and install your own personal copy of Oracle on it. You don't have to jump to full modernity right away, you can take the easy wins of hosted infrastructure first, and only later move up to the bigger wins of hosted platforms. 2. Yes, legacy stuff takes forever to disappear. There are still businesses running VMS inside of VAX emulators with COBOL apps on them. But once you're in that "super-conservative businesses won't move away from you anytime soon" area, you're in a declining market. New businesses unencumbered by legacy won't go down that road -- small businesses starting today will never buy an on-site server to start with (thanks to Office 365/Google Apps/etc.), and as they grow there's no reason for them to change that policy anymore. EMC might never get a new customer, and even if they keep their old ones for some time, it's just a question of how fast their decline is.
- evook 11y ago
  Working at real scale, I'd choose some cages in a datacenter I can walk in and place offices at over AWS anytime. Btw you'd cry if I were allowed call out some companies that still run lotus notes.

anjc 11y ago

Wtf is this article talking about? Microsoft fucked because they have Windows on 95% of computers? Agh, i'm too exasperated to continue my train of thought. Yes, everybody is fucked because of Facebook and Google and MongoDB.

fredkbloggs 11y ago
There's a lot of stupidity here (or perhaps one might charitably call it excessive glee, or even plain old clickbait), but it's been a long time since 95% of computers ran Windows, if that was ever true in the first place. You'd have to start by defining "computer". If we use a technically reasonable but broad in journalism's terms definition of "device containing a CPU with integrated MMU", then we're including every mainframe, server, desktop, laptop, smartphone, tablet, industrial control system, laser printer or multi-function document management system, router, network or storage switch, storage system controller, sound mixer, and countless other devices. A very small and diminishing fraction of those machines run Windows. Even if you limited the definition to include only things we traditionally think of as computers, namely mainframes, servers, desktops, and laptops, Microsoft's market share is something like 30%, though it's very difficult to measure and once again subject to definition; see https://en.wikipedia.org/wiki/Usage_share_of_operating_systems https://en.wikipedia.org/wiki/Usage_share_of_operating_syste.... And again, that's been declining for a long time. Even the most generous interpretations that include only desktops and laptops don't get you to 95%; you can narrow-definition your way up to about 90%, and that assumes "market share" includes copies that were made in violation of license and/or law (and thus for which Microsoft received no money). The reality is that Microsoft is a niche player, not because they lost a market they were previously winning but because that market itself became a small part of something much bigger, in which Microsoft was never especially competitive. As noted by the author, they've been investing heavily in changing that, but the early returns aren't much to talk about. Windows Mobile/Phone is a complete dud, Surface is a weak seller despite recent improvements, and Azure is at best a very distant second in IAAS (see http://www.datacenterknowledge.com/archives/2015/05/28/gartner-aws-pulls-further-ahead-in-iaas-cloud-market/ http://www.datacenterknowledge.com/archives/2015/05/28/gartn...). What's remarkable is not that Microsoft is doing so poorly but that they're the only enterprise computing company that even appears to be trying. I think that's what the author was expressing. The characterization as "fucked" comes from Ashlee Vance and should be given the credibility one would assume considering the source. There's little question that most of these companies' positions of relative importance are in decline and have been for a long time. But some, especially Microsoft, still have enormous sums of cash and businesses that are continuing to generate more of it. However irrelevant such a company is, it's still a long way from going out of business. Conversely, no amount of cash is a substitute for organic sales growth.

ap22213 11y ago

First thing I thought when reading the headline was 'so is Oracle'. Glad it's mentioned in the article. AWS is absolutely killing it. Every release cycle, they put out quality products that directly attack Oracle. And, Oracle is in the bad position of having to eat their existing profitable business lines to compete. Now, of course, cloud isn't here yet. There are certainly lots of issues around security, auditing, privacy, data ownership, etc. But, the trend is accelerating. Why? Because the cloud is so much cheaper. Why maintain and manage your own data center and infrastructure for millions of dollars when you can reliably outsource for a fraction? I used to do a lot of work in the utility industry. I remember years ago giving a presentation on the cloud. The audience was passionate that it'd never, ever happen to them. They were extremely protective of their data. But, then I slowly saw it happening anyway. It crept in slowly. The first to go were the lowest risk systems. Then, the next lowest risk systems. Then, the next. The incumbents will hold position for a long time to come, propped up mainly by government spending, hellishly long sales cycles, a corporate aversion to micro products, and FUD. They have plenty of time to catch up. But will they? That's the question. Unless oracle is actively researching new cloud platforms (and I'm guessing they are), they're going to be in pain in 5 years. Corporations that don't move to the cloud will be in a cost disadvantage. On the other hand, serious work needs to be done to overcome the severe limitations of the current cloud. Lots of certification and auditing and risk assessments and SLAs need to happen.

exelius 11y ago
Oracle is not quite as fucked as everyone else on the rest of the list. Oracle has the benefit of offering products that solve very real, very complex business problems: they aren't selling technology infrastructure. Oracle's core products are largely around financial and operational automation, and they are well understood by integrators across many industries. Their biggest threat is something like Salesforce -- but even then, the capital cycle for ERP systems is something stupid like 15-25 years. IBM is largely in the same boat as Oracle, albeit with slightly more government focus. Oracle is ultimately a software company. Where their customers run that software is largely irrelevant to their core business. Is there margin to make by running an Oracle cloud? Sure, but the bulk of their profits are made just by licensing their LOB software packages and the associated annual support contracts. Oracle will be fine, and Larry Ellison will be able to buy an even bigger yacht in a decade.

exelius 11y ago

They're the walking dead because they pursued scale over innovation. Once they had achieved scale, they found themselves with too much momentum to innovate. So because they couldn't innovate, they built an army of consultants to hawk their wares to customers who also valued scale. But that consulting business never really took off because its existence was predicated on a model of dumping obsolete (but "enterprisey"!) hardware/software onto customers already suffering from vendor lock-in. When those customers start to struggle (as they inevitably will, because the tech industry is far from the only one where scale can impede your ability to innovate) the market has moved on to a different place, and the company never kept up. Then you see a death spiral of layoffs and divestitures that destroys 50-90% of shareholder value. Sound familiar? This fate awaits all these companies: - Dell: I don't even know what Dell makes anymore. I guess they sell PCs, servers and consulting services to small businesses that don't know any better. But this market is being eroded by an army of local MSPs and resellers, and it's not a model that benefits from scale. - HP: HP has been a disaster for a while, but they will probably endure since their hardware is generally pretty good and reasonably priced. But servers and printers are not a very high-margin business, and that's caused their leadership to be constantly on the hunt for a newer, higher-margin revenue stream. - EMC: Storage is increasingly distributed, and EMC's centralized storage solutions really are a dinosaur in today's market. They just make the wrong product and never found anything to replace it. - Cisco: By all rights, Cisco shouldn't be on this list given that the Internet still largely runs on their hardware. But they convinced themselves they were a consulting company, and that ran off all their good engineers. Cisco today is a shadow of its former self.

hitekker 11y ago
What would be your opinion on Oracle? I find it strange that the Author didn't include Oracle in the title although he talks about it at some length in the article body.
- exelius 11y ago
  I gave my opinion on Oracle elsewhere in this thread. Basic just is that Oracle will be fine because they're a business software company -- all the companies on this list are manufacturers of technology infrastructure products. The model through which companies acquire tech infrastructure is changing from a product model where infrastructure companies build/design differentiated products to a services model, where a much smaller number of companies are buying increasingly commoditized infrastructure hardware and selling access to it as a service. Oracle doesn't do this; the bulk of their value comes from software that is much more difficult to replicate.

vinceyuan 11y ago

> They couldn’t use servers from Dell and HP and IBM. Does Amazon buy servers from Dell, HP or IBM?

devit 11y ago

The problem of these companies is that they sell highly overpriced hardware that is in the best case sold because the consumer really wants support and risk avoidance, in the middle case because of vendor lock-in and in the worst case because of direct or indirect corruption. Obviously this is not economically efficient, and thus eventually the scheme has to unravel.

creshal 11y ago
Overpriced, really? Dell sells desktop boxes sufficient for office work with three years on-site support for under 400€, and fast servers for under 1000€ kitted out. If that's overpriced I really need to talk to your hardware supplier. (Of course, they all have high-end products, but the breadth of the offerings is usually high enough that they're always an option. They're not stupid.)
- devit 11y ago
  Indeed, this is not true for a substantial portion of Dell's products.

a3voices 11y ago

Reminds me of when Peter Thiel called them the "Technology Rust Belt" in a talk.

rtets 11y ago

"I think there is a world market for maybe five computers." Thomas Watson, president of IBM, 1943 "Nuclear-powered vacuum cleaners will probably be a reality within ten years." Alex Lewyt, president of Lewyt vacuum company, 1955 "Two years from now, spam will be solved." Bill Gates, founder of Microsoft, 2004

ausjke 11y ago

This is a reasonable forecast, those big-irons will not go away soon, and they will be needed for a long while, it's just the booming age for them are indeed numbered. While reading this I was thinking, where does Apple fit? Does it have any big plan for enterprise at all?

darmok 11y ago

I was hoping for an informative well-written article. Alas, I was to be disappointed. Ignoring the juvenile profanity and the condescending rhetoric, the author completely misdiagnoses the technology shift that will be the real game changer ... namely, the advances in memory architecture. Whether it's memristors or Xpoint 3D or some other architecture, data storage will be completely turned on its head over the next 10 years. The lumbering giants (who bring in 4 times more in net profit in a single quarter than Pure Storage garnered in its IPO) will have to be nimble in the future, but I wouldn't call them the 'walking dead' just yet.

jb613 11y ago
The point of exactly how profitable the "walking dead" are is vastly underrated. The decision is between making giant profits now with low-risk VS miniscule profits but potentially large future profits with high-risk.

tw04 11y ago

The irony of this is that all of the "cloud providers" still buy gear from traditional IT vendors like Dell, EMC, HP, and Cisco for their own internal corporate IT. It's the dirty little secret that somehow always gets overlooked when everyone is espousing how we no longer need infrastructure when it can all just "Live in the cloud".

payne92 11y ago
Uh, no. For one example, see: http://www.opencompute.org/ http://www.opencompute.org/
- tw04 11y ago
  And that's proof of what? Opencompute is for building out their clouds, not their internal IT.
  - payne92 11y ago
    You may be confusing OpenStack with Opencompute. Opencompute is a set of hardware designs for high-scale data centers that came out of Facebook. See: https://en.wikipedia.org/wiki/Open_Compute_Project https://en.wikipedia.org/wiki/Open_Compute_Project

jb613 11y ago

The fact that Cobol is still alive and kicking illustrates that once in place, large systems are hard to replace. Costs and budgets matter too. EDIT: why did this get downvoted - am I factually incorrect or you simply disagree and want an echo-chamber?