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Bookstore sells some data centre capacity, becomes Microsoft, Oracle's nemesis
Another amazing year for Amazon
Sysadmin's 2015 review part 1 With 2015 drawing to a close and 2016 about to begin, it is time to reflect on the fact that the world never stops changing. The tech industry certainly changes, and so here's one sysadmin's view of the industry's movers and shakers.
In part one we're going to look at Amazon, Oracle and Microsoft. As I see it, the strategy of these three companies are broken reflections of one another. Oracle is trying to become Amazon. Microsoft is trying to become Oracle. Amazon's plans are completely unrelated to either of them.
Amazon started life as an online book store. It quickly expanded to become an online store of, well... everything! This "everything" included the spare capacity of its own data centre. Amazon could have become "just another hosting provider", but to dismiss it as such – and the exceptionally ignorant among us enjoy loudly doing so – is to fail to understand the very first thing about Amazon.
No matter in which area of endeavour it chooses to participate, Amazon is corporately obsessed with efficiency. Amazon commoditises everything, from books to labour to computing to logistics. Amazon automates and orchestrates. It lives and breathes metrics and analytics.
It is more than a business strategy; it is a religion. The idea that everything can be improved through instrumentation, metrics and analytics is the religion of the Seattle tech scene. Microsoft is infected by it, as is virtually every other tech business in the area.
Humans are inefficient and their judgment not as pure as that of an algorithm. Imagine an entire metropolis where everyone has perpetual Google envy, but they try to address it by figuring out a way to ship you a box of bananas that costs half a cent less than the previous method.
Recently, Amazon has decided that owning the online world isn't enough. It wants to be Walmart. It wants physical stores and even more warehouses. It wants sub-warehouses everywhere delivering you goods automatically.
Above all else, Amazon wants those pesky humans out of the picture. Robots in the warehouses, robots to transfer goods from the primary storage facilities to the local sub-warehouses and drones to deliver goods directly to your doorstep.
And Amazon wants to deliver everything you need. Compute resource, physical goods, you name it. If someone buys something – anything – Amazon wants its 30 per cent.
Oracle, meanwhile, is obsessed with what Amazon was five years ago and in doing so they are missing the bigger picture. Oracle wants to move to a subscription revenue model where they not only have an absolute lock on licensing, the workloads in question are running on Oracle's cloud, too.
Oracle completely misses the point of what Amazon is about and in doing so they guarantees it will never be the success Amazon is becoming.
As discussed above, Amazon's creation of AWS was essentially an accident. An outgrowth of Amazon's obsession with efficiency. Amazon simply can't have idle server capacity around, especially once the nerds have created this really neat layer of automation and orchestration for using those servers that make the idle capacity easy to sell!
But in doing so, Amazon turned self-service automated hosting of compute workloads into a commodity with relatively low prices and ease of use. Both of these things are anathema to Oracle, but necessary for success as a public cloud provider.
Oracle views becoming a cloud provider as a means of seeing who is using how much of what and how often. This is important because Oracle could then automate its licensing changes to squeeze the maximum amount of dollars out of its customers, adapting in near real time to any attempts to use licensing loopholes.
If Oracle can move enough customers over to its cloud with its new sales policies, then the cloud should help Oracle see increased short term revenue. Keeping to its existing licensing strategies, however, seems doomed to failure when the commodity approach of Amazon is just a click away.
Microsoft has a very successful public cloud. It also has some of the most advanced technologies in any number of markets and when assembled and analysed as a whole probably was the single most impressive technological product portfolio of any company on the planet. For Microsoft, this isn't even close to enough.
In your correspondent's opinion, it seems as if Microsoft operates on the belief that for every computer in use, Microsoft is owed a tithe. Every desktop ever sold should bring in a minimum amount. Every server in use should bring in a much – much – larger amount. Microsoft is seemingly so tied to this model that it has apparently blinded it to rational or useful licensing overhauls for almost two decades.
Today, however, Microsoft no longer has a monopoly on the endpoint. Mobile is huge and Microsoft is a non-entity there. Millions of people have never owned a Microsoft product but manage to access the internet every single day. Soon that number will reach a billion. What's Microsoft to do?
The answer for desktop users, apparently, is to alienate their existing installed base with intrusive Windows 10 advertisements that the average user can't make go away, download a copy of the operating system to their devices unwanted and plan to trigger an install of Windows 10 even when not requested by the user.
I'm personally bitter about the "download a copy of the operating system to their devices unwanted" because this happened to me while I had a device connected to a MiFi device while in another country. It ended up costing me hundreds of dollars, and there's absolutely nothing I can do about it.
Microsoft wants its endpoint dominance back because it allowed the firm to keep end users addicted to a huge number of Microsoft products (such as Office). These products used to reinforce Microsoft's position and in turn drove the uptake of Microsoft Server products. In turn these make using Microsoft endpoints easier.
On the Server side of the house, more than anything, Microsoft wants customers to stop running their own IT. For the very same reasons as Oracle, it wants customers to be using its public cloud for everything.
In order to help push customers to the cloud, Microsoft is making running workloads on your own tin as miserable as possible, and appears to be adopting some of Oracle's most reviled licensing strategies. One of these strategies is per core licensing.
Microsoft isn't, as the term might imply, charging some rational amount per actual core, perhaps with varying tiers based on the power and capability of the core. No, Microsoft is packaging cores up in minimum bundles, apparently ensuring that the average user can't possibly license things optimally and that ultimately the cost of on-premises workload hosting will be above that of hosting it on Azure.
Like Oracle, Microsoft is also massively incentivising its salesforce and what's left of its partners to sell Azure instead of on-premises licensing. Facing competition on various fronts, Microsoft will clearly try anything to get customers locked in.
If Microsoft succeed, it will be brilliant: once locked back in to its ecosystem, end users will be with it for another decade, maybe two. But if it fails, this will go down in history as a text book example of corporate hubris.
Microsoft stands upon the razor's edge. Will the superiority of its technology and its cross-integration win out? Or will customers say "Hold, enough"?
In part 2, I'll take a shot at decoding Cisco, Dell and HPE. ®