Wikibon: Cloud and Big Data Upending IT Stalwarts

InsightaaS: Jeff Kelly has published an interesting new post on the Wikibon site, describing the impact that cloud and Big Data are having on IT industry incumbents. Readers of this space will know that InsightaaS respects Wikibon’s perspective: the open source community of world-leading analysts has its roots in storage and system research, and has evolved to be a leader in understanding software-led infrastructure, Big Data, and cloud. This post provides evidence of why we follow Wikibon: Kelly has done an excellent job of detailing the business impact of IBM’s shortcomings in cloud, and how Oracle, IBM and other “IT stalwarts” face a critical period, as “Cloudera and Hadoop competitors Hortonworks, MapR and Pivotal as well as NoSQL players MongoDB, DataStax and others” make inroads into cloud-based Big Data.

IBM’s annual revenue last year dropped below $100 billion for the first time since 2010. The company’s fourth quarter results were particularly weak, coming in 5.5% below expectations. This was due in large part to IBM’s struggling hardware business, with revenue dropping a staggering 27%.

Much of the blame can be attributed to the cloud, or I should say to IBM’s slowness off the block in adapting to the cloud. As more and more enterprises look to public cloud providers such as Amazon Web Services to support new applications, demand for on-premise, highly-optimized, expensive hardware slows. IBM made its own attempt to provide cloud services with its SmartCloud offering, but the service never caught on, a reality IBM acknowledged with its decision to shutdown SmartCloud at the end of this month. IBM is shifting SmartCloud customers to SoftLayer, a cloud service provider it acquired in 2013, and will invest $1.2 billion in the service over the next several years. As for its hardware business, IBM today announced it is selling its x86 business to Lenovo, but will retain its high-end converged solutions including its PureData System line (Breaking Analysis from Wikibon here.)

IBM’s predicament is not unique, nor is cloud the only major disruptor…

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