Eucalyptus CEO: Cloud services are double-edged sword for traditional vendors

Just because HP, Dell, and IBM have long standing relationships with enterprises doesn’t mean big businesses will choose them when they eventually decide to start using public clouds. So argues Marten Mickos, CEO of Eucalyptus.

He has bet on Amazon Web Services, far and away the largest provider of IaaS and yet, like the others, failing to draw in the enterprise user.

There’s still “inertia” among the enterprises, but since they have mission critical workloads that they have to depend on, that’s healthy, Mickos said. It means customers are adopting the new services when it’s best for them.

mickos_0.jpgSource: Eucalyptus
Mickos Marten, CEO of Eucalyptus

“We are blinded by the Instagrams of the world and the Pinterests and we think everything can happen overnight,” he said. But when it comes to systems that enterprises absolutely rely on, it makes sense that they need to be methodical about making changes to those systems, he said.

When they do, he thinks AWS is better positioned than the traditional vendors. For starters, AWS essentially defined this new model of computing and is the market leader.

Sometimes, when a new entrant like Amazon is disrupting a market, the new player wins. Mickos saw it happen when he was CEO of MySQL. “People said, ‘you can’t battle Oracle. Your database is just a glorified file system,’” he said. MySQL ended up getting bought by Sun and being widely used.

Plus, history shows Mickos that the established players don’t win customers just because of previous relationships. He remembers when SAP came out with an open source database, while he was at MySQL, that failed to get any traction. Ultimately, SAP decided to collaborate with MySQL on a database product.

“I’ve lived software disruption and seen the unstoppable force of a new paradigm that makes sense,” he said.

He also pointed out the internal conflict that many of the traditional vendors face when trying to offer cloud services. “For them, it’s a double-edged sword to go cloud because utilization goes up,” he said.

Nokia Siemens, a Eucalyptus user, found that its server utilization went up 300 percent, Mickos said. When a company like that upgrades its servers, “the vendors are happy to sell that one server but they’re divided because they think they lost a sale on two others,” he said.

Mickos has reason to hope that AWS will start appealing to big businesses (AWS does appear interested in winning enterprise business). Customers use Eucalyptus’ open source software to build internal clouds. Importantly though, Eucalyptus supports AWS’s APIs – with AWS’s approval – making it easy for users to move workloads between their internal cloud and AWS, and use the same tools to manage and deploy workloads on either cloud.

The companies have a solid working relationship, Mickos said. Eucalyptus does all of its own development and coding, but then it asks AWS for feedback. AWS may point out areas to look out for. “They’re giving us practical, sound advice,” he said.

Still, Mickos has long pointed out that there’s nothing exclusive about its partnership with AWS. “Let’s say I’m wrong and the detractors are right that AWS won’t go further [in the enterprise]. Our product is built such that it can and will support other cloud APIs,” he said. “If that day comes I’ll be happy to support the Google API, the Microsoft API, the OpenStack API, the VMware API, whatever it is at that point. But that line of defense isn’t anywhere close. Just look at the AWS growth numbers.”

Read more of Nancy Gohring's "To the Cloud" blog and follow the latest IT news at ITworld. Follow Nancy on Twitter at @ngohring. For the latest IT news, analysis and how-tos, follow ITworld on Twitter and Facebook.

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