Tech giants bet hybrid cloud

IBM. Microsoft. These are the tech giants flirting with hybrid cloud technologies and business models, attempting to gain an edge on pure cloud vendors like Amazon and Google. 

In recent weeks, each of these companies has moved toward accommodating big businesses with potential hybrid cloud applications. Hybrid cloud, if you’re not up to date on the latest buzz phrases circling the IT world, is a combination of both on-site data centers and cloud infrastructure, the latter usually supplied by a third-party provider.

Earlier this week, IBM acquired software broker Gravitant to bolster it’s hybrid cloud play. Gravitant helps companies buy and manage cloud computing services from multiple vendors. It’s the latest in a string of cloud-related acquisitions in recent years by IBM, including SoftLayer, Cloudant, and Cleversafe.

Also this week, Microsoft partnered with Red Hat, a former rival company that makes a version of the Linux server-side operating system. Users of Microsoft Azure, the software giant’s cloud service, will now better support hybrid cloud applications. This is an interesting move by Microsoft, as Azure actually leads AWS in enterprise public cloud services, according to Wikibon. Encouraging hybrid cloud environments could cannabalize Microsoft’s public cloud business.

Last month, HP gave up on trying to compete with Amazon, shuttering its Helion Public Cloud service. Shortly after, it announced a new angle that could give the Hewlett-Packard a foothold in the emerging hybrid cloud market. The company is throwing its weight behind Helion OpenStack 2.0, an infrastructure-as-a-service distribution for large enterprises that leverages hybrid cloud tech.

And don’t forget about the recently merged Dell-EMC. Michael Dell himself says the company’s VMWare virtualization and cloud service arm is “well-positioned” to take advantage of opportunities in hybrid cloud computing, possibly providing end-to-end enterprise cloud solutions.

See: Why Dell isn’t dead: the cloud is a storage location, not a storage medium

Betting on hybrid

Each of these corporations hedges a strategic bet that big enterprises won’t fully convert to cloud servers, preferring to keep at least some of their data and apps on premise. None of them can compete with Amazon, which holds a near-monopoly on public cloud computing services. The enterprise-level hybrid cloud offers an emerging avenue for legacy players to stay relevant and grow, so long as they can get big businesses to jump on board.

Their predictions aren’t just wishful thinking, either. While cloud computing has exploded in popularity in recent years–Amazon Web Services just posted its first quarterly profit, in fact–businesses are still uneasy about hosting sensitive and critical workloads on shared public cloud servers.

So far, the numbers weigh in favor of HP, IBM, and Microsoft. The hybrid cloud market will outstrip the overall IT market between now and 2019, with a projected annual growth rate of 27 percent according to research firm MarketsandMarkets. The hybrid cloud market was worth over $25 billion in 2014.

Exactly how a hybrid cloud model best suits enterprises is still up for discussion. Some see it as a two-way street, in which an on-premises app could benefit from cloud extensions, such as druing a spike in sales traffic on Black Friday. Vice versa, apps hosted in the cloud can reap the benefits of on-site capabilities.

Another use case is big data processing. Sensitive data is kept on a private cloud, but analysis of that data takes place on a public cloud that can scale to support such demanding tasks.

Amazon is sticking to its guns despite the proclaimed advantages of hybrid cloud. Businesses still can’t run AWS infrastructure on their private clouds and in all likelihood won’t be able to any time soon. Amazon has admitted the hybrid cloud model will continue to catch on in the short term. Twenty years from now, however, Amazon predicts very few companies will have their own data centers, and those that do will be at a disadvantage.

Amazon has led the infrastructure-as-a-service (IaaS) market for the past five years, according to Gartner, with 10 times as much cloud capacity as the next 14 providers combined.