Kevin Montalbo

Cloud computing has come a long, long way from the early days of mainframe time sharing technology and virtualization. Over the past decade alone, we've seen cloud computing experience tremendous growth providing ubiquitous solutions for both consumers and enterprises. This trend is expected to continue with the rise of cloud based services for machine learning, artificial intelligence and edge computing. However, the transformation to cloud computing remains a very challenging prospect for many enterprises, enterprises need to consider factors such as cost security, legacy and on premise technologies and the value of using cloud native versus cloud agnostic services.

In this round of cocktails, our guests shed some light on the evolution of cloud computing, how it has changed the way enterprises deploy IT, how enterprises balance the demands of the cloud and legacy systems, analyzing your company's capabilities of going cloud native and the future of the cloud.

Joining us today from Australia's Toro Cloud CEO and founder, Cocktail's co-host David Brown. Hi, David.

David Brown

Hello, Kevin.

Kevin Montalbo

And today's guest is an internationally recognized industry expert and thought leader who is currently the Chief cloud strategy Officer for Deloitte Consulting. He has written more than 13 books on computing, published more than 7000 tech articles and spoken at more than 700 conferences. He's also a giga arm research analyst, a cloud computing blogger for Infoworld and a frequent contributor to IEEE cloud computing tech target search cloud and search AWS. Joining us to share his knowledge and expertise is well, we didn't plan this but another David, David Linthicum all the way from Virginia. Welcome to the podcast.

David Linthicum

It's great to be here and lots of Davids in the world I found out so we could have a

David Brown

Fair share of David Brown's as well.

Kevin Montalbo

OK. So 13 books and 7000 tech articles, that's a lot of content for someone who works on the content side of things. I'm just curious, how did you get into publishing?

David Linthicum

Well, boy, I started way back when, when I was in my twenties, I used to publish articles for the local PC. I remember those days, special interest groups, days before the internet was around. And we used to get together once a month and exchange ideas on how to build and deploy PCs. And I used to, you know, publish wiring diagrams and lots of technical articles then a little challenging cause I'm severely dyslexic. never spelled well. and um you know, barely made my way through college and high school with those stuff. So I started just to train my brain in order to, you know, produce additional content and actually the use of the computer and the word processor, you know, kind of changed the game for me because it could, you know, in essence, go behind me and check my spelling and my grammar and things like that in the early days of stuff.

So leverage that as a crutch and I found out that it was a career enhancer. So the more I published, the more people recognize my name and the, you know, more jobs I got and the more money I made when you're in your twenties and you want to go out and have a good time and buy a car, things like that, you know, that that kind of meant a lot and it just progressed to my career. And so in other words, I started writing books and, you know, the articles, you know, started to go PC magazine, I was one of the editors there. That was a great, a great amount of fun because it was part of testing and deployment of PC magazine's editors choice. I was involved in that then any number of enterprise software books, DB MS, database programming design, um case trends, which was computer rated software engineering trends. Just basically anything that came along that I thought was interesting as a topic and subject area. That's kind of the way I learned how the subject area was.

And so in other words, you can't do everything as a human being. I can't be an expert in every programming language, in every architecture, in every database. Um But I can learn a lot about a lot of things. Um just kind of based on the fact that I'm writing about them. So I know a lot about a few things and I know a little about a lot of things and I do that through research and writing and allows me do in essence, kind of figure out how things are shaping and working together. You know, it allows me to identify emerging patterns and, you know, kind of, that's what I do for a living now. It's figuring out when the ball is gonna be kicked, figuring out what the next generation technologies are gonna be. And in my, you know, publishing history and the last book I published, I think it was 2009, they've kind of fallen out of favor right now with people who are actually, you know, trying to get information was ultimately just revealing new concepts that didn't exist before and seeing if I could create a market around the concept.

So EAI enterprise application integration, you know, that was my term. that was, you know, basically represented by the same book, cloud and service oriented Architecture, you know, just basically building on those and then got into writing columns. I've been writing the cloud computing column for Infra World for the last 12 years and any number of other publications as well. And you know, I do a lot of radio and TV and podcasts like this and I, I just really enjoy it.

Kevin Montalbo

OK. So you have witnessed the evolution of cloud computing over the last 20 or so years. So how has the cloud changed the way enterprises provision and deploy it?

David Linthicum

Well, ultimately provides a different consumption model. You know, at the end of the day, you know, people always talk about the revolutionary nature of cloud. But if you think about it, we're still dealing with databases, storage, compute cycles and many of the same platforms we leverage on premise. If you look at what cloud computing is and the way it evolved to be is it's in essence the ability to configure a data center virtually. So certainly the infrastructure is a service provider. So I can put in storage, I can put in computer, I can put in databases, I can put in platforms, I can put in Linux and Windows and T and anything I need, you can figure out whatever infrastructure I need to support my applications. And the great thing about cloud is you can do it in about an hour. You know, versus if you're a traditional enterprise, you have to go through procurement cycles. It's gonna take six months to a year, you know, for the standard global 2000 companies. So the revolution is really around the consumption model and the fact of the matter is gonna free us up from actually being innovative and creative and not necessarily putting it as a limitation on the business, you talk to the CEO's out there.

They're gonna tell you that, you know, it takes me two years to integrate a company I buy because it is going to basically spin around on the particular um integration technologies that they need, need to make these things run where in cloud computing, it's a matter of setting up what you need. It's a matter of core integration technologies, it's a matter of, you know, layering in different security platforms and doing so you're really kind of at the speed of need. So that's the revolution of it. And the second generation of it that we're seeing now is the ability to leverage advanced technology that doesn't exist on premise. I mean, some of the AI stuff you can't find on premises, you know, some of the machine learning based systems can't find on premises. Certainly the serverless computing stuff you can't find on premises because that would be weird.

And ultimately, we're able to weaponize technology that prior to this was unaffordable and unobtainable. And right now, probably five years ago, the cloud cran across the chasm where they have better technology than we do on premise, whether it's security governance management monitoring. And that's because if you look at the way the R and D dollars are being spent within the technology companies, they're investing in building cloud based products, not necessarily on premise based products. So those two kind of waves occurred and I think the next wave will be, you know, absolute the sync and migration of legacy systems moving forward and kind of dealing with that whole thing. But um you know, the the revolution I saw, you know, certainly back in 99 when I got into the cloud game was the fact that this consumption model is gonna be more aligned with what business needs and business even understands what they need. And it turned out to be right thing. But of course, it took, you know, 11 years to do that.

David Brown

Can we talk, you mentioned on premise a few times there, can we talk a little bit more about that? Um Many companies have still very significant investments in it infrastructure which is on on premise. How do companies balance the demands of cloud with a legacy on premise system?

David Linthicum

Yeah, I mean, I've been in cloud for you know, a long time and I, I live in northern Virginia and this is the data center capital, it seems like of the world. And I'm watching data centers go up probably, you know, there's probably 10 projects right now within five miles from me. And so what happened, you know, suddenly the ability to leverage cloud and share resources would get us away from traditional data centers. Well, the reality is much different. The reality is that there's a certain amount of infrastructure that we're gonna have to own either that's gonna be in managed service providers, colo providers are our own private data centers. Um So we're gonna hit a saturation point in cloud migration.

Cloud guys don't like me to say this, which, you know, typically between 70 75% where the remaining 30% can't migrate anywhere and they're more valuable to the business and a lot of things we have in the cloud. And therefore we have to make these things, you know, cohabitate when I say work and play well together. And right now, we don't have a lot of very good middleware layers that are able to span on premises in the cloud. We're getting to security, we're getting to governance, we're getting management monitoring, which have this duality of roles where they're able to in essence, monitor systems that we own, monitor systems and manage service providers and colos as well as in the public cloud. Um That's new to everybody though, everybody has a tendency to kind of want to leverage whatever native tools and technologies are there moving forward. So the thing that you know, I've been spouting for a long period of time and it's actually got me more ire than anything else is the fact that I don't think these legacy systems are gonna completely go away more so than you think they're gonna be a big part of our infrastructure moving forward. I think we're gonna be able to find analogs other ways to run them. Co OS and manage service providers are good options for that right now and everything is not gonna be able to live in the cloud.

And by the way, um even if we have platform analogs that exist in the cloud, that doesn't necessarily mean that a data set or an application workload should exist in the cloud. And also we're finding that the economies are really kind of driving a lot of things back to the data centers. I mean that some of the Silicon Valley Based companies where they're putting out a social media platform or they're putting out a gaming platform and they did so in the um in Amazon cloud or whatever public clouds that are out there found that it's more cost effective to basically move it back to their existing data center that they own because you think about it, it's really kind of a single pattern of a workload. In other words, they're running a game, they're doing one thing, they're not running 10,000 applications like a typical enterprise is and if they're able to own the hardware and software and able to optimize that and optimize the network bandwidth as it goes between them and the users and able to do so at a, at a decreased cost, that's where you're gonna be. And I think we're gonna see a lot of that, we're gonna see normalization in the market where people moved out to cloud, probably ill advised and they're going to normalize back to the data centers, their private data centers or COLOS, things like that. And then we're gonna see certain platforms move out to the cloud.

You know, one of the things that I tell my clients when I meet with them is just, you know, I'm not a cloud bigot. Um I'm here to basically mediate the best solution, you know, to the problem and the best architecture which is gonna be optimized in a certain way. And sometimes that's on premise, sometimes that's other platforms. Sometimes it's cloud private cloud edge computing, IOT based computing all of the above and it's really becoming that way and figuring out how we're going to, you know, look at this from a I guess, a unpartisan way, you know, since we have an election coming up, um where you're actually gonna pick out the right solutions um for the problems that we're looking to solve and not necessarily move in a certain way, what I call the managed by magazine crowd, just because everybody else thinks it's trendy to move out in this direction.

David Brown

Here's a lot of pain points associated with it. If you, if you try to make that move and you're not ready for it or it really wasn't designed to be made that move. Is there any sort of use cases which come to mind where people really shouldn't try and move on premise to the cloud.

David Linthicum

Yeah, I mean, obviously if you have a significant amount of security risks, that's there. Um, and you're worried about,, you know, for example, data solventy issues, you know, some of the countries out there have, you know, very strict, um, you know, data retention rates, auditing rates, things like that where it's almost impossible to move it out in the cloud. If you have to audit these systems in a certain way, in many instances, the cloud providers just don't provide a way for you to do that. You can't walk through their data centers, for example, and you know, take the serial numbers off of their servers, you don't know where their data centers are. And that's a good thing. You don't know what servers are running on. That's a good thing. You don't know who's maintaining the servers. So if those kind of restrictions are there that immediately eliminates cloud, the, the other thing I say, which is a little different, different than most people have in an opinion, if you're overly concerned about the control aspect of it. In other words, you're going to think that you're running a risk even though I don't think you're gonna be running a risk.

Those are reasons to hold off for now because things are only gonna get better in the cloud security is gonna get better governance is gonna get better things like that. So if you have any kind of reservations of the fact that we're taking additional risk and moving into the cloud, which by the way, you are, any migration comes along with a risk, then maybe it's something you shouldn't do, you know, moving forward and then the cost justification, you know, obviously it's changing from a really consumption efficiency or, or basically cost efficiency to business agility, you know, kind of an argument, but you have to completely look at it in many instances. If it's you know, 10% increase in efficiency, don't do it. I mean, your risk cost of risk is gonna be way above 10%. It's 30% you know, maybe it's worth it's worth the risk and there's other other mitigating factors there and the ability to kind of leverage technologies, of course, multiplying for your business and agility and those sorts of things. And it's something you should probably do.

David Brown

You mentioned an point. I also wanted to ask you more about which was this concept of we're going to reach some sort of saturation point. I think you mentioned like 75 80%. And then we're going to see some sort of contraction back to the private data centers are on premise, where do you think we are in that cycle at the moment? How far away?

David Linthicum

Yeah, we're at about 30 40% penetration right now in the, in the best cases, And that's considering Sass as well. And Sass is kind of a big beast to itself that no one seems to be paying attention to. And as far as infrastructure, the service migrations, you know, maybe 10 to 20% for most global 2000 enterprises out there, it's fairly miscued than what I think the press is talking about. So when I see things out there, I still see data centers in play, I see people building net new applications, they may have moved 1000 applications out of the 10,000 applications within a particular enterprise. They're in the process of moving data, they're in the process of figuring out um security and complexity and all those sorts of things. And that's kind of hindering the movement right now. And I think that people are trying to accelerate, but it's tough to accelerate.

David Brown

That's an interesting thing because you know, like you mentioned is you know, it's a fad, it's a buzzword and it's sort of VC chasing SaaS and pushing SaaS. But in our particular business case, which is application integration, API management and data management, most of our demand comes from on premise related systems. And and so whilst there is this market demand in terms of the business case of driving into SAS and providing a solution, which is a cloud based solution for really sort of cloud based integration type patterns. Fortunately, from the outset we developed both a hybrid solution of both on premise and cloud. And we're finding still today, the vast majority of the demand from enterprise customers is for on premise solution, which I think is partly because most of our new age competitors, at least purely cloud based. So it's interesting that perhaps the market was trying to service a demand particularly in the enterprise space which was maybe forecast to be, I guess they were forecasting the demand decrease for on premise, accelerated rate perhaps more than it actually will.

David Linthicum

Yeah, I think that that's in line. I mean, I've been a CTO five times and you always have to predict the platform utilization where people are going to be. And I think the reality is, is that um people have a tendency to be more reactionary in organizations that are building product. And if they see people moving to a Sass, which has been that way for the last 15, even 20 years, if you look at the application service providers that we had way back when um it's, it seems like you're gonna be all in on, on creating a Sass based version of your system. I think you did it the right way. In other words, you're creating a hybrid version and you consume the technology, however you want to consume the technology. But many people have just said we're all in on Sass and in essence trying to sell it that way and then they put an automatic limitation on consuming the technology and I wouldn't do that as a CTO certainly looking at the ability to do duality and deployment, the ability to kind of deploy to two different systems and basically having one be multi-tenant and basically using the same code base for those sorts of things. And that's all possible if you're, you know, a smart developer, smart programmer, smart product manager,

Kevin Montalbo

You mentioned that you were talking to a lot of clients. So when you talk to clients, do you see right away some of the success factors or some of the variables that are present currently with their organization? So who has a more positive success rate when adopting a cloud strategy or going for a digital transformation projects with the cloud?

David Linthicum

Yeah. Stor factor is number one, people who have vision as to where they're looking to take this stuff. In other words, they know where they're going one year, two year, five year, even 10 years down the road and what they need to be as a business and what it needs to be to support the business. And then second would be folks with resources to make it happen. I think the biggest hindrance to moving a cloud is people underestimate the amount of money it's gonna take to make these moves. And reality is it's gonna be binary. Either you're gonna hit the threshold of resources you need to actually make the move successfully or you're gonna fall short, you're actually gonna waste the money, you're, you're going to spend, even though you're spending less money than other folk, other folks in the peer group.

So when I hear people, let's, we're gonna basically fund this cloud migration by savings we're gonna get from cloud that won't never work your ability to, in essence, be all in on migrating these various systems and getting the right talent and tools and technology, we need to make it happen, you know, it's gonna be a lubrication to success and then also the ability to kind of understand where you're going. If you could, you could spend lots of money. And I see this all the time too without having a good vision as to where the commonalities are and how you're going to in essence, create a common architecture and move stuff forward where it's just gonna fall short because you're gonna build too much complexity because everybody in essence is um and has too many choices. They're selecting what they think is best to breed and you're gonna end up with a big complex mass that you spend a lot of money to get to. They're gonna have to fix.

David Brown

Interesting. I was just thinking about the enterprise software solutions were typically sold in the day as highly customisable frameworks. I used to get frustrated when dealing, you know, as a customer with enterprise vendor and being told it was a framework rather than a product, which meant that I had to spend exponential amounts of dollars on the implementation of the software, not just on the product licensing fees.

Now, the upside was as a customer as it could be tailored to my unique requirements. You know, I can do what I needed with it. And that's the differentiator between an enterprise requirement to a small business requirement. But one of the downsides was that it could also result in lock in to that vendor and all the systems integrator for that matter who was implementing it for you because they knew the custos conversations that were being implemented. So it wasn't often easy to migrate away from these solutions. And do you think in in the cloud space, do you think something similar is happening that the cloud native solutions that public cloud providers are are providing such as cloud native databases and systems like like that? Are they providing the equivalent of the vendor lock in of the traditional software model?

David Linthicum

Yeah, it's a great question. I think for the most part they are when I hear cloud native, I, you know, I always tell my clients you're really walking down the aisle with that particular vendor. However, the other, the other side of the coin, if you're trying to be too generic and and too open and trying to be, you know, at least common denominator approach, you, you're gonna find that you're not able to um satisfy the needs of your applications on any platform you run on. So that's the trade off. So ultimately, most people aren't going to migrate off of where they're looking to go, they're gonna leverage the technology for the life of the system, not always, but most of the time. And so I tell people to kind of take a look at that. And if you are go in anticipating migration off a particular cloud provider and you're leveraging their secu native security system, their native databases and object database, you know, system in AWS, their particular platforms which are native to it and you can't find in other systems or other other clouds, then the trade off is gonna be, it's gonna be um almost uneconomically viable for you to move off that stuff ever. And so if they do jack up the price and you know, start charging you more, you're kind of in trouble.

However, the other trade off that was just mentioned is ok well, let's do everything generic and let's leverage open source databases and let's leverage, you know, open source Linux systems and all these open systems on the cloud, they'll still be a cost of transferring the system. It's not gonna be as hindrance as you leveraging the cloud needed features. But actually, in many instances that's gonna cost you more because you're building systems that are really kind of built to run on multiple clouds and therefore they're gonna be wasteful in terms of resources everywhere and they're gonna be more expensive to run over time. So the I mean, it's one of these, it depends answers as a consultant as to what you're looking at, you have to kind of take it on a case by case basis. So I can't stand in front of me and say cloud native is the way to go, even though lots of people are doing that now or cloud native is not the way to go because it's gonna cause lock in the reality is you have to consider all all alternatives and figure out your best path in terms of cost and efficiency through those alternatives.

David Brown

And I guess one of the counter arguments of pro cloud native is also the obviously the maintenance of the application itself. But but I think also some of the vendors now of the open source applications like MongoDB, I know are doing it are providing the maintenance services where they're effectively doing that same remote management of the database that you would get in a in a native solution, a public cloud native solution.

So I guess the argument for lower maintenance can be some somewhat mitigated by some of the services being offered by these open source solution providers as well. Yeah. So what would you recommend to a company to, to to mitigate this risk if they, if they're looking at the, you know, they go the open source route versus the cloud native route.

David Linthicum

Well, we we just kind of talked about that. I mean, really, you kind of have to take applications on workload by workload basis. And I know that's a question that people want to hear because they want the easy answer. But the reality is I can have an application that's running on a lamp stack, that's been running in the enterprise for the last 10 years. And I can find platform analogs for it, open source analogs for it in a public cloud provider where I'm not leveraging cloud native features. And so it's almost a lift and shift port from one to the other. And that's obviously going to be the cheapest way to migrate into the cloud. The downside could be that that application is gonna leverage those resources in a much less efficient way. And therefore my cloud bill is gonna be 20 30% higher, you know, over the 1010 year lifespan in the application. And versus, and also it's gonna run, it's gonna run um in a diminished way because it's not leveraging the native APIs leveraging the native security systems, you know, things like that were in essence running in an abstraction layer above those systems.

However, and so if you go down to the native system, you're gonna be able to hopefully get a lower cloud bill. You should and ultimately run faster. You should and therefore people are gonna be happier with performance, you know, which is gonna be a step in the right direction. However, if for some reason, the cloud provider, you know, raises the rates or, you know, something occurred where we have to move off that system, you're gonna pay a quite hefty fee. You in essence recon for, you know, down to an open source standard that's gonna run on premises or even move into another cloud native system, another public cloud provider. So these are the risks you need to need to, you know, in essence kind of talk through. And so my advice to this is almost like an attorney.

So in other words, we're going to court and this could go any way. And also you have to kind of figure out where the vision is for this application, what these things, what this purpose is gonna be the importance of the business, you know, how much money we're willing to spend and then really kind of talk about the tradeoffs and making it happen. Many instances, probably 60 70% of the time people go cloud native just because they're almost have a religious belief around that just because some of the other people are talking about it. and then other instances, they're looking for the least common denominator approach, which is scary into itself because in essence, you're gonna run poor everywhere. Um, you know, versus just on one system.

David Brown

And of course, the argument that,, you know, costs may go up, haven't been founded yet because, you know, over the last 10 years we've seen public cloud provider costs go down. It may, it may well be another reason for the migration. You know, there could be some other fundamental reason, vendor, you know, affiliation or, or whatever it maybe that is driving the change. But so far cost probably isn't the major driving factor to wanting to change to, to Google versus AWS. For example,

David Linthicum

It typically isn't, it typically is in many instances, they're, they're looking for the strategic advantage of leveraging cloud as a bringing value to the business in some other ways. Like I, you know, I always tell my clients, you know, people came to me for cost reduction in terms of migrating to the cloud, but they stayed for the business agility, the ability to enhance the business using this technology. And if you look at some of the disruptors out there, they're able to weaponize cloud computing, you know, the Ubers and the Netflix and other folks out there there and there's many others that are, you don't just don't hear about anymore in essence, allow them to disrupt their business.

And so they're able to become a better business because they're able to operate faster, able to move into the market, able to get products out and running, able to expand their business faster than any of the traditional business. You know, as things that sit on premise. And so moving forward, we have pharmaceuticals, we have um you know, banking systems, things like that that are in the works. Now, you know, they're gonna be huge disruptors in 2021 and 2022 and the weapons that they're able to use is leveraging cloud computing as the ability to just basically move a lot faster. You know, car companies like, you know, Tesla versus traditional, you know, Detroit based companies would be instances of it. They're born in the cloud and therefore they have a huge advantage.

David Brown

Where do you think this is all gonna end up? What's, what's your prediction for the next 20 years? where, where is the public cloud? What are the major innovations we're gonna see in the public cloud providers over the next 20 years?

David Linthicum

I think, ultimately, we're gonna have a saturation point on the future function stuff in the next five years because, you know, right now you could go to, you know, some of the big cloud, you know, cloud shows, you know, they're kind of stretching the limits, they're, you know, building things that we didn't think we needed.

And so ultimately, they're gonna have so much money and so much um technology that's able to play and so many more resources in the, in the traditional software providers that in essence, it's almost like the way I describe it. It's almost like word for windows, you know, I use Microsoft Word, but I keep getting a new version of that, but I don't use any of the new features. You don't have to pay for it. And so I, you know, basically use the same version of word I used 10 years ago and I think it would be perfectly fine. Well, it's beyond some of the resources that are there now. And so instead of storage and compute and, and all the bread and butter things that cloud computing does, it's really kind of the future functions around that. So it's IOT edge based computing, digital twins machine learning based systems, that's where they're looking to make their money. Um because all that stuff by definition is gonna be cloud native for the most part and some are not. Um but your ability to kind of get people on that technology and leveraging the value of that technology is really gonna be the big win for them that makes the technology incredibly sticky.

So people are going to definitely go to multi cloud. We're, we're seeing that now, almost 90% of the folks that are out there that's gonna expand. And I think the cloud companies are gonna basically enhance a lot of their existing stuff, but they're, they're gonna reach a saturation point of themselves where people, they're gonna start building stuff people aren't asking for and they're gonna realize the folly in doing that in essence, trying to get back to the essence of what they're able to do and manage these systems better.

One of the things I do see happen is a lot of the public cloud providers kind of accepting the fact that it's gonna be a multi cloud world and the ability to kind of manage and monitor and work and play while with other public cloud providers that right now they don't like and hate. And so they're doing that for the um for, in essence, the the value to the client client sees them really. They're supporting my multi cloud and leveraging features and functions within their cloud that are native to the systems and they can talk to Google and Amazon and Microsoft to make all these things work and play well together, then we're gonna start moving in those directions and we haven't seen that a lot yet. And I actually made a prediction that I was absolutely wrong about for re invent last year. I thought that we were gonna see, you know, some of these things start coming out of the public cloud providers, but we, I haven't seen it yet other than some stuff, you know, maybe that's shown up from Google. Um So that's gonna be a big thing.

And then I think the cost reduction is gonna occur as well, the ability to kind of get down to a commoditized cost, even though it's scary because we can't sign up to an enterprise license agreement where the costs are gonna be held down in perpetuity. They're not signing those deals and so they could raise the cost and the fees as a utility service, you know, very much like our water bills and electricity bills we don't have in the last few years. They're doing the same thing in the cloud space. And it's even more scary if we're gonna get down to three major cloud providers or five major cloud providers. Well, 10 years ago we had 15 and their prices are easy to control. Um I see commonalities and security systems, the ability to kind of mediate complexity is gonna be the big thing to solve. Um We say I've been focusing on that as, as kind of a discipline, you know, for the last few years because a lot of my clients are mediating their complexity moving forward, the cloud providers are not helping on that journey. And I think we're gonna have to start helping on that journey.

So there's basically, I think that if you're gonna, you know, look for the next 10 years, the theme is gonna be, you know, back to the bread and butter of what cloud does and really kind of focusing on doing that even better and better and cheaper and cheaper and certainly everybody's gonna leverage these advanced, you know, very cool, you know, cool kid technology like machine learning and, and edge computing and IOT and all these things like that, that's gonna be part of it. Um But I think businesses want to focus on the fundamental, there's not as much interest in that moving forward as I think that the cloud providers think. And even since the COVID stuff hit six months ago, I noticed a direct shift in people not necessarily focusing on analytics and A I technology and IOT and edge based system, they're just focused on getting their stuff out of their data centers and that the cloud because they view the data centers as being the risky aspect of moving into a pandemic.

David Brown

So if we, if we, we're gonna reach saturation point in in a relatively short amount of time and it's becoming gonna become a commodity item and like you say, like a utility and it's gonna be, you know, price compression. We obviously have very significant businesses we still need to justify here and the public cloud providers. And as you say, consolidating down to a few major ones. So I'm wondering where they go next? Do they, do they put on an application layer on top of the infrastructure as a service? Do they become software as a service providers leveraging their own infrastructure?

David Linthicum

Well, they've been trying that for years. I mean, if you look at some of the stuff that the public cloud providers are putting out and they're all in essence SaaS providers as well, they may not be business applications per se, but they're, you know, putting out 3D modeling systems and virtual reality systems. They're in essence software as a service design systems, you know, things like that. And so we'll see more and more of that moving forward. But I think their better play would be to allow the third parties to build that infrastructure on their systems, which they're doing now. And therefore they, they get the money, you know, from the utilization of the system without taking the risk from building the wrong IP that's going to tank in the market.

But, you know, they're, they're playing those games as well. I mean, um, you know, all the major cloud providers out there are also Softwares and service providers., you know, certainly,, you know, office and, you know, the office products with Microsoft and Google, Microsoft and Google and, you know, 3D modeling and design engineering and some things that, that A B US is putting forward and it's just gonna be integrated into their business. My advice to them, if I was CTO of these companies would be, you know, limit your ability to do this because in essence, saturates your under underlying capability to build existing infrastructure. moving forward. In the case of two of them, they had an existing businesses, you know, 15 plus years old. So I understand why they're doing it and really just kind of focus on what people need and that's reliable storage systems, things like that, you start putting your resources on building SaaS systems on top of it, you're in essence diluting the resources that are basically focused on building a better cloud provider and we haven't gone through a downturn yet. I suspect we will at some point in the future.

And then those sorts of resources are gonna be, are gonna be, um, tougher to allocate and those sorts of things will go away and it's not a big pr move by the way to put out something that you lose faith in, you know, five years down the road and you sunset it and pull it off the market and then the press goes nuts about it. Things like that. I see a lot of that happening coming forward. I think the normalization of the market is gonna be a lot of these feature functions and even the SaaS products that are built by the public cloud providers in essence, not being profitable into themselves disappearing and them not getting a big reliability points or, you know, trust points from doing that.

David Brown

It does make a lot more sense to, you know, to earn a cut from someone else's efforts through a marketplace type play. you know, like a Apple Google Play store, I guess all the providers have a marketplace to provision software on their platforms, but it's not the exclusive distribution point for their software platforms at the moment. So yeah, vendors can still provision two instances on Amazon and install their software directly or customers can do it directly. You're not, you're not forced to go through the marketplace. So it'd be interesting to see if that place becomes more mandatory in the future. So that, that, you know, 30% cut of the revenue stream is it, you know, gets pulled through the marketplace., at some point in time in the future, might be an additional revenue stream that these guys could take a look at.

David Linthicum

Yeah, I have a, I have a lot of um, technology providers that make their entire marketing through marketplace. They have no sales people, they have no marketing people. and they're, you know, close to half a billion to a billion dollar companies. And they just basically, they're living within the marketplace of the big three, Google, Microsoft and,, and AWS. And that's the only way they do it. The, the, the um risk is there to the point you just made was, you're in essence depending on somebody else to make your sales.

And if I was CEO of the company, I would diversify fairly quickly even if it took a bit of a loss to make that happen because we're essence exposed if those marketplaces go away or somehow they decide to drop us or, you know, whatever can happen if you're depending on somebody else for your business and some someplace I never like to be, you know, a couple of times, I was a CEO and, you know, five times I was CTO, um, I walked away from doing that each and every time I did it, it was the right decision.

David Brown

That's a big number. So, I'm, I'm surprised you've got,, customers doing those kind of revenue is an exclusive play through a marketplace.

David Linthicum

Yeah, they do. They do. And it's, um, it's kind of what I call an invisible market, visible economy that's out there. You know, people are able to, in essence, get very wiggy with how they sell things and they're avoiding human beings doing it. And so if you're born in the cloud and everything is gonna be on demand, you're in essence leveraging the cloud provider is a place where you're building the playing your systems.

In other words, they're your infrastructure on behalf, they basically use it to sell your software as well. And so open source systems, um believe it or not, they still make a lot of money on those things and providing services and, and extensions and, and those in, in the marketplace, proprietary monitoring management, software, security software, you know, things like that. Many of those folks haven't invested in marketing and certainly don't have a sales staff in making it happen in essence, become electronic order takers. And I think that's the best of the world if you can get it, you know, my concern would be that just going away and, you know, pulling the rug right out from under me or someone stealing my idea and me not having a very valid way to protect it. And we're in essence competing, we, in essence it sitting in the list in the same marketplace in no way to differentiate my technology and all those sorts of things are risk and moving forward.

And so if you're starting a software company these days, as you guys know, you know, those are fundamental decisions you have to make in terms of what business model you're gonna leverage. I mean, ones that invest in a lot of money and time and hiring human beings to help and sell it. even your own existing distribution system that sits online. And the other is basically doing the marketplace stuff where you're paying homage to somebody else to sell your stuff, you have to pay a fee to make that happen and they actually take a fee on each and every time you sell a product. And so, you know, what do you do? And I, I think those are, those are interesting questions that quite frankly were easier to answer 10 years ago, but not as easy to answer today. 10 years ago. I just didn't know all, all the time. And right now, I, I'd have to take a look at the model and look at the viability of the system in order to be, you know, what CEO's or CTO's do. And that's basically max and I shareholder value. So what's the best path to value.

David Brown

David, we covered lots of ground today and solved the world's problems in public cloud and I now also taking your SaaS solution to market as well. Thank you for your time today. Really interesting conversation. I enjoyed it a lot

David Linthicum

Yeah me as well. Please ask me back any time.

Kevin Montalbo

All right. Thank you very much, David Linthicum. Before we end this podcast, can you tell us where people can find you listen to your podcast and learn more about your work?

David Linthicum

Yeah, I go out to itunes and search on on cloud podcast, publish there about once a week, twice a week on on Infoworld, I have a, a column there, a blog that I had that for the last 12 years um published a lot on Tech Target, um also published on gigo.com. I have a number of reports there where I do the research and really kind of dive deep into different technology spaces, things like that. And you know, do a lot of this and a lot of podcasts and and love talking to people about technology and they can always reach out to me at DLinthicum@deloitte.com.

Kevin Montalbo

All right. Thank you very much for being with us. You can listen to our previous episodes which are available for streaming and, or download on your favorite podcast platforms. By the way, what do you think about cloud computing? Let us know by commenting your thoughts and opinions on the comment section of this podcast. Also, if you need to learn more, you can visit our website at triple www.torocloud.com to read up on our blogs and find out more about our products. We're also on social media, Facebook, LinkedIn, Youtube, Twitter and Instagram. Just look for Toro Cloud. Thank you. Thank you very much for listening to us today on behalf of David Brown and David Linthicum. This has been Kevin Montalbo for Coding over Cocktails.