When looking at the European cloud market ecosystem, most people would be forgiven for not looking much past the three largest holders of market share; AWS, Microsoft Azure and Google. But there are alternatives, despite them being less well known. This is the challenge facing Virtustream MD Simon Walsh.
Although as a company Virtustream has been in operation since 2009, the team consider themselves in start-up mode, taking position to pounce on the European market over the company months. The company was acquired by EMC last year, and formed the tech giant’s managed cloud services business, a position which could be seen as enviable by other cloud companies aiming to topple the top three’s firm grasp on the cloud market.
“EMC is the largest storage company in the world,” said Walsh. “And we’re aiming to leverage that position. We’re taking a rifle shot approach to building business in the European markets, but in parallel we’ve partnered with EMC because they own us, and we’ve partnered with Dell because they own EMC. With these relationships, we have access to multiple routes to market, and we plan on leveraging the recognition of companies like EMC and Dell to scale Virtustream rapidly.”
Virtustream is currently one of six EMC Federation companies (EMC2, Pivotal, RSA, VCE, VMWare and Virtustream), and will continue to be an independent brand following the introduction of Dell Technologies, and the subsequent sub-brands, in the coming months. While the brand is relatively unknown in the EMEA and APJ markets, this is not the case in North America where it has a number of certifications for federal government contracts and a number of enterprise customers.
Growth in the European market will firstly utilize the certifications Virtustream has in the US market to provide credibility for public sector organizations in Europe, and secondly, leverage customers who are already bought into the EMC and Dell portfolios.
The new EMC/Dell execs are seemingly learning lessons from Microsoft’s rise to the top of the market segment, as opposed to AWS’, becoming an end-to-end enterprise IT vendor (similar to Microsoft) as opposed to a specialist public cloud company (AWS). While AWS is widely recognised as the cloud leader worldwide, a recent study from JP Morgan will give the new EMC/Dell execs confidence.
The research highlighted 46.9% of the CIOs surveyed highlighted Microsoft as the most critical and indispensable to the future of their IT environment, whereas AWS only accounted for 13%. The all-encompassing portfolio offered by Microsoft (cloud, desktop, server and database etc.) was more appealing than AWS’ offering.
Virtustream can offer cloud capabilities across the board, from cloud native to traditional systems of record, and now the team have connected the cloud storage options directly to three EMC platforms in the software. The team are leaning on the idea of trust in the EMC brand, straightforwardness of upgrade and the simple integration between the offerings of all federation businesses, will offer customers a portfolio which can’t be matched in the industry.
“EMC is globally 30% of the storage market, if we go to the installed base and connect these customers to our storage cloud we should be able to scale pretty quickly (on growth of the Virtustream business),” said Walsh. “We may not be number one in the cloud storage market, but I can see us being in the top three for market share within the near future.”
One area the team are targeting in particular is the core business applications. Most enterprise organizations cloud be perceived to have a reluctance and a paranoia to run core business applications in the cloud, though Virtustream believes it has an offering which can counter this trend.
“Yes, I see paranoia, however it is geographically different,” said Walsh. “Europe is behind. Europe is still clinging onto building it themselves or outsourcing. There’s nothing wrong with outsourcing, but in the America’s they are much bolder at adopting cloud.
“Most people have used cloud to date for dev and test or they’ve used it for web front end or scale out systems of engagement, hardly anybody actually has an application which they run their business on in the cloud. It’s either in their own data centre which they run themselves or they’ve outsourced, and they have someone doing application management services. We have a hybrid solution which can change all this.”
The team have combined public cloud attributes of agility and tiered payment, and the outsourcing attributes of a core app, with an SLA and a performance guarantee, to create a hybrid proposition which they claim is unique for the industry. Walsh and his team now face the task of convincing European decision makers there is a feasible option to run core business applications in the cloud.
“The entire world has not shifted to cloud native,” said Walsh. “There is still a substantial amount of money spent by corporations around the world on running core business applications. We have a proposition which can run cloud native but can also run core business applications in the cloud, on demand and on consumption. No-one else in the industry does that. We can run all the systems on the same billing engine, the same cloud management tools and the same application management tools, which gives us a differentiator in the market.”