The Last Router
I have asserted in previous blogs that the term Enterprise Cloud is an oxymoron created by incumbent IT vendors and worried CIOs who fear that they are on the verge of massive change that won’t be in their favor. My position is even more resolute now that Virtual Datacenters in the cloud will replace physical datacenters in the basement because they are cheaper and easier and don’t require power, real estate or large IT staffs. The result will be the utter collapse of the current incumbent IT vendors. Amazon, just four years after creating the IaaS market is generating $650 million dollars a year from this “side business”. Today I believe my thinking has been off a bit. I now believe Cisco will sell its last Enterprise Router in the year 2015.
To some people that’s a pretty scary prediction – it should be.
There has been much debate about whether CIOs will ever move their brick and mortar (iron and wire?) datacenters into the cloud because of concerns over data security or insufficient SLA or simply the loss of control. CIOs in general don’t like being on the leading edge of a technological sea change because they find little, if any, value in that kind of risk. However, at the dawn of the SaaS phenomena the CEO took CRM away from IT because it was clearly a cheaper and better solution for automating the sales force.
In the datacenter world it’s clear that the ridiculous and socially irresponsible costs of running a power sucking, carbon spewing enterprise datacenter with a footprint the size of a football field, 24/7/365 does not help anyone’s bottom line. The fact that it’s a beehive of headcount doesn’t help. Moving the datacenter into the cloud, it will be reasoned, will free up resources to focus IT on solving business problems rather than tending to infrastructure. After all, who’s IT staff is more competent, yours or Amazon’s? In the end, given all of the risk and change and pressure from entrenched IT vendors, CIOs will not choose to move their datacenters into the cloud. Their bosses will.