 Welcome to Wikibon Whiteboard. I'm Stu Miniman, and joined with me is Brian Graceley. We've been talking about cloud for many years, but we wanted to step back as we look forward and really kind of say what is the state of cloud today and what are some of the models here? So Brian, you've got drawn up here a couple of clouds. What are we looking at? Well, the most basic level, people talk about public cloud and they talk about private cloud, right? And then somewhere in between sometimes we talk about hybrid cloud, but that really means some combination. We've seen the market evolve. There are the large web-scale public clouds that everybody knows, the Amazons and Azures and Googles, private cloud being people's on-site data center, on-premises data center, and then we've seen an emerging sort of enterprise cloud. So maybe not targeted at new startup applications, but really how do I better run today's business applications? And that typically ends up being off-premises. Okay, so yeah, I mean, let's start. First, public cloud I think is the easiest one. You mentioned Amazon, you mentioned Azure, Wikibon put out its first forecast for public cloud. And we actually said that if you go out to the future there, it's about one-third of the overall market is gonna shift there over time. Maybe give a little color. You did some application work. What's going in the public cloud today? What are some of those early use cases? And maybe what's not going in the public cloud today? Right, so right now the simplest way to think about this is we talk about something called systems of record, the big back office applications, your core business assets, your core finance applications, HR, some of those types of things, those tend to live within a customer's data center. And what we're seeing more and more, if it's not just a brand new startup, is people saying, how do I augment my business? How do I augment how I do sales, marketing, customer acquisition, a customer experience, whatever? They're doing those more out here in the public cloud and then they're trying to kind of augment the two of those together. So I may not be doing a transaction application in the public cloud for whatever reason, compliance, security, but how the customer learns about me, how they interact with it, the big data analysis around it, a lot of that's moving out into the public cloud because of scalability or they wanna do testing to see what works well with customers. Yeah, I like that. It's very much an application look at what's happening there and how the applications are changing. There's some applications that are being born in the cloud, especially mobile, some of those environments that are looking there. Let's talk about private cloud. Private cloud, I remember back, we were talking Chuck Hollis put out a blog post. Gosh, I think it was 2007, 2008. And there were the people that had been talking about cloud and they're like, well, this isn't really cloud because it doesn't have federated applications, it doesn't have self-service, it doesn't have the manageability, its flexibility. This stuff just looks like virtualization. So where are we with private cloud today? Well, a lot of the technical building blocks are there. So the public cloud is virtualized. The public cloud highly automated. In the most cases, it's what we would run, we would call converged infrastructure. It's not separate sands, it's really converged storage and compute together. The big difference is really in implementation. So the skills are there in the public cloud to be able to run it. That's their business. They have to be great at doing that. In the private cloud, it is a lot of virtualization. It's not heavily automated because people are still learning that skill. I mean, they don't need it as much. If you're not a development shop, you may not need the self-service capability. So a lot of it has to do with how much do you do your own custom development versus commercial applications? But we're seeing that evolve. We're seeing more structured, converged infrastructure offerings. We're seeing them embedded with automation and cloud management capabilities. And we're seeing them coming from more structured buying offerings, which makes it simpler for customers. So if I hear you right, one of the big differences between public and what we've been doing, private, is really the operations of it. How much I'm touching it. One of the stats I threw out that usually had people say, wow, when public cloud's important, is in the private cloud, how many hundreds of servers can I manage from a single person? And in the public cloud, it's tens of thousands of servers. And it's because I don't have a, if I have a server team, they're the ones that rack, stack, and roll out servers. They don't do the Karen feeding, the old pets and cattle analogy we've heard for a number of years. So I guess the question is, do we have private clouds today? And where are we with that adoption? Well, we don't have an exact number. We're gonna have a forecast out pretty quickly. We tend to think it's probably maybe 10% of the virtualized beginning to be converged infrastructure is probably what you'd call private cloud. Highly automated, some element of self-service. There may be pieces of it that people give out what the pricing looks like. But what we're seeing that becomes more of the private cloud is, we're seeing what happens up here. We're seeing companies like Oracle, Virtustream. We're seeing different offerings from some of the more vertical specific where they're saying, let me take some of those core applications. Maybe they've got a way to do cost reduction. Moving from old power or Spark to x86. It's a good time to move them. And they'll run them in these very dedicated managed environments and they're reducing costs 20, 30%. So in some cases, they're getting the benefit of somebody else helping to run them. Somebody else automating it for them. It's still the same SAP Oracle vertical application, but the cost structure is separate. And for a lot of customers, that's valuable because now they've got some time to do those new applications or budget. Yeah, it's interesting, remember two years ago, we did a survey of the Wikibon community back into 2013. And when we said, do you want the same environment in your private cloud and your public cloud? They said, yes. They say, okay, I've got a VM or I've got a V block or I've got an Oracle Exadata. I'm not spinning those up in AWS or Azure, but I can do that over here in the enterprise off-prem environment. And we're a little loose with the terminology because depending on how I build that, if it's software, is that a public cloud? I think so. If it's Oracle, well, it's a public cloud, probably if it's a service that I'm doing, but if it's an Oracle Exadata that I own in that environment, maybe more of its managed private cloud environment. Right, you get into these nuances of, is it private from the perspective of security or is it private because I own the asset or am I renting the asset? Which, quite honestly, at the application layer, they don't care. They just want to know what the business outcome is. Yeah, I remember, gosh, when we were first fighting about this a few years back, the great cloud wars of many years ago, right, it was, is it on-prem or is it off-prem? Do I own it? Do I secure it myself? What pieces do I own and what penis pieces do I manage? And what we've been telling IT is you want to get out of doing the things that don't add value to what you're doing. So what's the important pieces for IT to own themselves and what pieces do they push off to someone else, Brian? Right, right. Well, that's the piece that, it's different for every business, but we're hearing more and more that people are saying those things that are essentially commodity for my business. A lot of cases, the things that lived in your private cloud, in some cases, they want to move those to let somebody else run it. In some cases, they're becoming SaaS applications. They're HR and finance and other things. So we're beginning to see sort of this moving of priorities of this, trying to add business value here, trying to reduce cost here and here, and people trying to find that whole right mix because there are a lot of really viable options nowadays. Okay. And you talked a little bit about the applications, spreading between, anything on the enterprise side you want to talk about from the application standpoint? Yeah, I think, again, we talked about a lot of systems of record still living on-prem, sort of systems of intelligence living somewhere close to where that is. So if it originates here, and then we're seeing these systems of engagement and systems of driving customer experience that are getting moved into other places because they want to move quickly, they want to take advantage of other services that are out there. So the applications are, they're not all distributed by nature, but that the overall experience is becoming more distributed. Yeah, absolutely. And a hot topic we've been talking about lately is the internet of things. And there's going to be that gravity of data. If I've got all the sensors at the edge, I'm going to need to have the data at the edge. I'm not going to be able to move all of that. So it's definitely not a winner takes all. And boy, it's going to be changing fast. So this enterprise private cloud will be changing rapidly over the next few years and public clouds just growing at tremendous growth rates. Absolutely, absolutely. So Brian, 2016, as you look forward, what are some of the major aspects that questions that you have, customer moves that you're going to be watching for for indicators of things at large? Right, so a couple of big things for me. Everybody is still saying hybrid cloud is the model they want to adopt. Are the vendors listening? Are they giving them flexible hybrid clouds? Not necessarily only my technology hybrid cloud. So that to me is a big area, will it be flexible? And then the second thing is I've been focused a lot on these cloud native applications. So really the things that are out here kind of augmenting the systems of record and so forth. How fast is that growing? Are people willing to pay for it? There's a lot of open source technology in there. So that's where containers and platform insert, all those things are coming into play, involves new skills, the technology is there. Do people have the skills to deal with that? Or are we going to have a situation like we had early on with private cloud that they just weren't ready for it? So those couple of things are really important. Okay, and a big thing we see is the operational model that I have here is really starting to bleed down here. I remember the first whiteboard I did for Wikibon was what we called hyperscale skill sets and hyperscale skills bleeding down in the enterprise and we're really starting to see this come to fruition. So David Flayer, our CTO here at Wikibon said, if you're not shifting the way you do things, this is the strategic impairment. If you're not, maybe competing's the wrong word, but lining up to be more like the public cloud that doesn't mean embracing everything there, but making the change to make it so that you're more agile and have costs that are more in line, you just won't be competitive in the marketplace. And really, David calls it true private cloud. It really is just do you measure yourself the way that they measure themselves? How fast you roll things out? Do you have cost transparency? Can you do things on demand? Those are the really important things because your business is gonna be asking you for that. Yeah, absolutely. So we welcome a feedback from the whole community on this. Terminology aside, it's exciting times in IT. So be sure to check out wikibon.com for all the research and look for many more of these videos that we'll be doing. Thanks so much for watching.