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The Cloud & Technology Transformation Alliance is a joint initiative of Channel Partners and The 2112 Group. CTTA's mission is to be a forum through which all members of the technology value chain – IT vendors, service providers, distributors, resellers, agents and end users ‒ can discuss the issues of next-generation technology and systems, define the value of technology in business context, create best practices for adoption and application, and provide guidance for the business community on what comes next. This blog covers some of CTTA's work. More information is at http://cttalliance.com.

VMworld: Ground Zero for ‘Cloud’ Backlash

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By Lawrence M. Walsh, CEO and President, The 2112 Group

The tweet of a friend of mine pretty much said it all: “Heading to Las Vegas for VMworld – get your heads out of the clouds."

For much of the last two years cloud computing – or simply “The Cloud" – has overshadowed the technology landscape and dominated every discussion. The cloud is seen as the future of technology delivery and consumption, as the world looks to offload on-premises IT burdens to service providers and spread out technology costs.

To believe the hype, cloud computing can make a business more efficient, give it greater access to resources, make IT less expensive, put data and applications in the hands of users anytime from anywhere, make children smarter, cure cancer and bring peace to war-torn regions. Only a few of those things are true, and most of them are exaggerations.

And that’s part of the problem with cloud computing – the hype has vastly exceeded the reality to the point where a cloud perception bubble has formed and is on the verge of bursting.

The Channel Partners Cloud Convergence Council, a group I moderate, has discussed this issue at length several times. IT vendors and carriers greatly want the cloud to succeed because it will provide them with predictable, margin-rich revenue for years to come. The same annuity stream will help float solution providers and telephony agents better than any product sale. Therefore, everyone pushes The Cloud as hard and often as possible.

Everyone knows there’s cloud hype. Solution providers tell us that every vendor that has a cloud offering tries to convince would-be partners of the simplicity in adoption and implementation, and the virtually guaranteed profitability of their offerings. They often find that those promises fall short of functional and performance expectations. In other words, there’s a lot of vaporware in the cloud (ironic imagery, eh?).

Worse is how vendors, solution providers and carriers are trying to get ahead of the cloud to attract partners and customers. Even if they don’t have a bona fied cloud offering, they will talk about “their cloud" to give the appearance that they’re a player in this burgeoning market. As a result, every product or service that touches the Internet and “feels cloudy" is deemed a cloud offering.

My favorite example: The Microsoft commercials. An unattractive couple sits in an airport terminal and learns their flight is delayed again. Exasperated, the woman expresses her boredom, and how they’re going to miss her favorite show, “Celebrity Rehab" (this should be a clue). Her male companion has a eureka moment and says, “To the cloud!" Using his Windows-powered PC, he programs a DVR to record the reality show. Relieved, the woman says, “Yeah, cloud."

Now, what actually happened here? Did the cloud do anything? Actually, there was no cloud involved. The guy simply used one client-side application to reach out to another machine to record a television show. Was there transport? Absolutely, but that’s not cloud by the National Institute of Standards and Technology definition.

Why are tech companies hyping the cloud? Because they need do. Cloud computing will top $150 billion by 2015 – a fairly large number by any measure. But that only represents 10 percent of total IT spend. The other 90 percent of IT spend is representative of legacy products and services that are increasingly commoditized. They need the cloud to replenish their profits as much as their revenues. Therefore, they need a faster adoption rate even if they’re not ready for the cloud.

The hype has already created an atmosphere of confusion. Businesses of all sizes are struggling to figure out their cloud strategy, and what should go into the cloud and what should remain on premise. Small businesses are particularly confounded by the cloud hype because they have a lower risk tolerance for making mistakes. As many businesses have discovered, it’s exceedingly hard to back out of a cloud service once you commit.

The displeasure with the term “cloud" and fatigue of its use will inevitably cause a backlash. And VMworld is the perfect place for this backlash, since too many people mistakenly use cloud and virtualization as one in the same.

Virtualization is a major component of cloud computing, as it enables shared resources and multitenancy. However, to use virtualization and cloud synonymously is just faulty logic. So VMware partners looking to differentiate themselves from the cloud hype will use any term that doesn’t include “cloud." Some companies will even speak disparagingly of the cloud to further distance themselves.

That’s how the great cloud backlash will begin. And, frankly, it’s long overdue.

The technology community needs to speak of the cloud in realistic terms related to its value and not just the hyperbole. With true estimations of what the cloud can do and how long it will take to achieve desired results will put vendors and customers on a path to creating roadmaps. These plans will provide a clear picture on when cloud adoption will happen, giving all level expectations. Then, vendors and cloud providers can compete on the merits of their solutions and not their marketing.

Now, this may not happen at VMworld or happen all at once. But if it doesn’t happen in the casinos of Las Vegas, it will happen eventually. The post-cloud hype world will be one with clearer expectations and more valued services that aren’t lost in the fog.

Lawrence M. Walsh is CEO and president of The 2112 Group , a technology business advisory service that specializes in optimizing indirect channels and partner relationships, and principle blogger at Channelnomics . He’s also the executive director of the Channel Vanguard Council and moderator of the Channel Partners Cloud Convergence Council . He is the former publisher of Channel Insider and editor of VARBusiness Magazine. You can reach him at lmwalsh@the2112group.com .

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