"There’s a battle going on between CEOs and their IT organizations. The CEO is saying “hey – I go home on the weekends, my kids are on Facebook storing pictures and videos for free, Gmail is always on, this new Web stuff is cheap and simple, I can get to these services from any device, Amazon is selling compute and storage for peanuts – why am I spending so much on IT?—Outsource the lot to the cloud!”
IT’s response? “Uh oh – we’re gonna get squeezed. We need to: Virtualize. Simplify. Do more with less. Cut the fat. Increase responsiveness.”
Technology companies, seeing the pickle their best customers are in, the threat to their business and a way to compete, are responding with VMware and Hyper-V integration, thin provisioning, automated tiering, compression, data deduplication; plenty of marketing too – “to the cloud.” And the last year or so has brought lots of high profile M&A, aimed directly at filling portfolio gaps for areas like unstructured data and simplifying IT (Data Domain, 3PAR, Compellent, Isilon, Storwize, Ocarina, etc). It kind of reminds me of the Three Stooges a little bit – “to the hunt” – lots of action but I can’t help wonder if the big IT vendors really know where they’re going with this over the long haul.
What I mean is that business is good right now. The market’s up; demand looks solid; everyone seems happy. But there’s a big change coming. We’ll look back five years from now and the gains being made in the data center will be ancient history. CEOs will be happy for a while that CIOs are reducing costs. They’ll keep taking down IT as a percentage of revenue. But CEOs are greedy and we all know they’ll want more; much more. It’s why smart people like Paul Maritz say that VMware needs to move beyond cost cutting into delivering deeper business integration and more substantial value. "