Cloud Computing arms race in full tilt

By Subraya Mallya - August 2010 | Topics - Cloud Computing

The world is still wrestling with the after effects of the economic downturn, high unemployment, budget deficits galore across states, towns. Oblivious to all these worldly challenges the technology industry seems to be charging ahead. In what could be tipped as the Cloud Computing arms race, large technology companies like HP, IBM, Oracle, Dell, Cisco, EMC are snapping up companies in what amounts to “acquire-at-site” philosophy.

While most might look at the Oracle acquisition of Sun as a hardware play or MySQL play, I think the long term vision behind that was Cloud Computing. Sun for a long time had been devising a utility computing business. Oracle now with the entire breadth of technologies, from Operating System, Application Platform (Java), Large Database, in-memory databases, Tools is gearing up for the Cloud. The fact that they are going at it from an appliance angle – Exadata should only be considered as getting their feet wet.

Then there was the left field acquisition of McAfee by Intel. The idea there is that the computing has moved beyond PCs into Cloud, mobile and Intel can delivery security services to all the different platforms of computing.

The topic dujor is the battle between HP and Dell over 3Par, a relatively small unknown storage company (5 minutes from my place. Did not know what they did lest I would have bought some of their stock). At stake are two key technologies, Virtual Domains and Thin Provisioning, that would be foundation of any Cloud Computing infrastructure. Virtual Domains allows secure application data isolation on a consolidated multi-tenant storage platform and  Thin Provisioning helps improve the efficiency in utilization of storage. At the time of this post Dell and HP had counter-bid each other two times. The latest offer from  HP stood at $1.6Billion offer @ 27 dollar/share. Other players like EMC and Oracle might jump into the fray. It should be not surprising if Acadia, the joint venture of Cisco, EMC and VMWare joins the bidding.

In the past months we have seen

  • CA acquire 3 Tera, a cloud platform company
  • EMC acquire Fastscale, a platform company that helps optimize application deployments across physical, virtual environments.
  • IBM acquiring Cast Iron Systems

I think this is just the beginning of many more acquisitions to come in the Cloud Computing space, in the next 3-6 months. The big guys who have been lethargic in the Cloud Computing space (their press releases notwithstanding) are now shifting gears. Here is a half dozen companies that might be in the news in days to come.

  • ARCSight: Intrusion-detection software company has already put itself for sale (few minutes before this post). This is a critical technology to allay fears of companies considering putting their information in the Cloud.
  • Rackspace: I already wrote a post on this possibly being a good fit with Red Hat. Given that there is big push to have vertical integration across infrastructure and platform, this company might be a attractive acquisition candidate for Cisco as it continues to push beyond networking further into Cloud Computing, Interactive Communication, Security. At $2.4B market cap, it is definitely something Cisco can acquire.
  • Rightscale: It is doing what HP, CA, BMC would love to do for Cloud. Federation of IT deployments across Public and Private Cloud is definitely the trend. Rightscale helps companies manage their Cloud deployments across most of the current leaders Amazon, Rackspace, GoGrid, .  While their current focus is purely automation, provisioning, managing elasticity etc it is conceivable that they could expand that to Governance, Audit, Monitoring, Chargeback areas and be the main pluggable console for all things cloud.
  • Joyent: If Oracle did indeed decide to do good on its vision of acquiring Sun and charge ahead into Cloud, Joyent would be a good candidate to acquire. Joyent, incidentally, is the only Cloud vendor that has based its platform on Solaris. If you read through the blogosphere, Oracle has killed OpenSolaris and steadfastly working on cloudifying Solaris based platform. If that were true Joyent might be a starting piece.
  • Boomi: With Cast Iron Systems part of IBM, the leader in the integration space with a big library of adapters for who’s who is SaaS, Boomi might be a attractive candidate for Oracle or HP.
  • Informatica: If Boomi was too small, Oracle can certainly go after Informatica and get all the picks and shovels needed for them to Cloud enable their MDM offerings – Customer Hub, Supplier Hub, Product Hub. While companies might still be hesitant to put their operational financial data in Cloud, they might not be averse to putting their Master Data in Cloud and engage with their value chain in mining and generating value. Cloud lends itself perfectly for Big Data Analysis.

Every day is some new interesting development in Cloud. It won’t be long before we start hearing more about industry vertical clouds comprising of operational SaaS applications, extensible platforms, supported by Big Data Analytics for the entire ecosystem. Federal Cloud, Healthcare Cloud, Retail Cloud… excited yet?

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