Global Analyst Insights by Rene Buest

Cloud Marketplace: A means to execute the Bottom-Up Cloud Strategy

By on April 15, 2015 in Cloud Computing

Worldwide many CIOs are still looking for the right answer to let their companies benefit from cloud computing capabilities. Basically all kinds of organizations are the right candidates for a bottom-up cloud strategy – the migration of existing applications and workloads into the cloud. However, this approach isn’t much innovative but it offers a relatively high value proposition with low risk. An analysis of market-ready cloud marketplaces show promising capabilities to implement the bottom-up cloud strategy in the near term.

The Cloud drives the evolution of IT purchasing

In the blog post “Top-Down vs. Bottom-Up Cloud Strategy: Two Ways – One Goal” two strategy approaches are discussed that can be used to benefit from public cloud infrastructure. One conclusion was that top-down strategies remain reserved for innovators. Bottom-up strategies are mainly realized in the context of existing workloads to move them into the cloud. CIOs of prestigious companies worldwide are still searching for best practices to heave their legacy enterprise workloads to the cloud.

Looking at the general purchasing behavior of IT resources unveils a disruptive change. Besides CIOs, IT infrastructure manager and IT buyers also department managers are asking for their right to be heard or are going their own ways. Driver behind this development: the public cloud. Its self-service leads to a vanishing significance of classical IT purchasing. Obtaining hardware and software licenses from distributors and resellers will become less important in the future. Self-service makes it convenient and easy at once to get access to infrastructure resources as well as software. Thus, distributors and resellers systematically have to rethink their business models. Those system houses and system integrators who still haven’t start their cloud transformation so far are at risk to disappear from the market in the next three to five years. So long!

Besides self-service the public cloud offers primarily one thing: Choice! More than ever before. On the one hand there is the ever-growing variety of sources of supply – solutions of providers. On the other hand the different deployment models the public cloud can be connected with. Hybrid and multi cloud scenarios are the reality.

The next step of evolution is well underway – cloud marketplaces. Implemented by the operators the right way they are offering IT buyers an ideal central platform for purchasing IT resources. At the same time they are supporting CIOs to push their cloud transformation with a bottom-up strategy.

Bottom-Up Cloud Strategy: Cloud Provider Marketplaces support the implementation

The bottom-up cloud strategy helps companies to move existing legacy or enterprise applications into the cloud to benefit from the cloud’s capabilities without thinking about innovations or to change the business model. It is mainly about efficiency, costs and flexibility.

In this strategy approach the infrastructure is not the central point but rather a means to the end. Finally, the software needs to be operated somewhere. In most cases the purpose is to continue to use the existing software in the cloud. At application level cloud marketplaces can support to be successful in the short term. More importantly they are facing current challenges and requirements of companies. These are:

  • The distributed purchase of software across the entire organization is difficult.
  • The demand for accessing software in the short term – e.g. for testing purposes – increases.
  • Individual employees and departments are asking for a catalog of categorized and approved software solutions.
  • A centrally organized cloud marketplace helps to work against shadow IT.

In light of the fact that still a vast number of valid software licenses are used in on premise infrastructure underlines the importance of Bring Your Own License (BYOL). BYOL is a concept by which a company continues using its existing software licenses legally at the cloud provider’s infrastructure.

In respect of supporting the bottom-up cloud strategy by a cloud marketplace, experience has shown that cloud provider owned and operated marketplaces like Amazon AWS Marketplace or Microsoft Azure Marketplace are playing an outstanding role. Both are offering the necessary technology and excellence to make it easy for customers and partners to decide for running applications in the cloud.

Technical advantage, simplicity and most of all an extensive choice are the key success factors of cloud marketplaces of public cloud providers. The AWS Marketplace already offers 2100+ solutions, the Azure Marketplace even 3000+ solutions. Some mouse clicks and the applications are deployed on the cloud infrastructure – incl. BYOL. Thus, the infrastructure is becoming easily usable for all users.

The providers are investing a lot in the development of their marketplaces – with good reason. Amazon AWS’ and Microsoft Azure’s own cloud marketplaces are having a strategic importance. These are the ideal tools to maneuver new customers to the infrastructure and to increase the revenue with existing customers.

Cloud marketplaces operated by public cloud providers are constantly becoming more popular – this with verifiable numbers. The marketplaces are having a big market maturity and are offering a big and wide variety of solutions. Against this backdrop, CIOs who are planning to migrate their existing applications into the cloud should intensively deal with cloud marketplaces. Because these kinds of marketplaces are more than just an add-on – they can support to accelerate the cloud migration.

About the Author

About the Author: Rene Buest is Gartner Analyst covering Infrastructure Services & Digital Operations. Prior to that he was Director of Technology Research at Arago, Senior Analyst and Cloud Practice Lead at Crisp Research, Principal Analyst at New Age Disruption and member of the worldwide Gigaom Research Analyst Network. Rene is considered as top cloud computing analyst in Germany and one of the worldwide top analysts in this area. In addition, he is one of the world’s top cloud computing influencers and belongs to the top 100 cloud computing experts on Twitter and Google+. Since the mid-90s he is focused on the strategic use of information technology in businesses and the IT impact on our society as well as disruptive technologies. Rene Buest is the author of numerous professional technology articles. He regularly writes for well-known IT publications like Computerwoche, CIO Magazin, LANline as well as Silicon.de and is cited in German and international media – including New York Times, Forbes Magazin, Handelsblatt, Frankfurter Allgemeine Zeitung, Wirtschaftswoche, Computerwoche, CIO, Manager Magazin and Harvard Business Manager. Furthermore Rene Buest is speaker and participant of experts rounds. He is founder of CloudUser.de and writes about cloud computing, IT infrastructure, technologies, management and strategies. He holds a diploma in computer engineering from the Hochschule Bremen (Dipl.-Informatiker (FH)) as well as a M.Sc. in IT-Management and Information Systems from the FHDW Paderborn. .

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