back to article Vendors reporting their cloud revenue with funny money

There's no way to tell just how successful your suppliers are in the cloud, because nobody's counting cloud cash consistently. So says analyst house Gartner in a paper titled “Vendor Cloud Revenue Claims — Should Enterprises Care?” Gartner thinks you need to care, because vendors are finding all sorts of ways to cook up a big …

  1. Ken Moorhouse Silver badge

    suggests asking the following questions

    I would have thought a better question would be: How much hardware infrastructure do you actually have ownership of? This is surely the kind of question that can more readily be verified as fact: look in the company's Accounts under "Fixed Assets". What are they reporting in that category?

    For all anyone knows, most of these companies might be hosting their solutions on other company's kit. Which means that they are not in full control of any service that they are supplying.

    1. Anonymous Coward
      Anonymous Coward

      Re: suggests asking the following questions

      For all anyone knows, most of these companies might be hosting their solutions on other company's kit.

      To an extent that's barely more or less a problem than having legal ownership of the kit. What counts is whether the company (or nested hosting companies) have a genuinely viable business model.

      There's some interesting analysis kicking about the web that reports that half of all AWS phenomenal growth is seriously VC funded startups with no real revenue. And there's quite a few revenue-free tech sector IPO's active in the cloud marketplace - you know of whom I speak. My guess is that the cloud market has already built out to saturation, large segments of demand will evaporate soon as many of the startups implode, or IPOs have to cut their cloth according to their means. What we'll see could well be a re-run of the 2000 telecoms implosion, as cloud providers find that they have little pricing power in a commodity market, and that too much of their costs are essentially fixed as demand declines.

      There will certainly be survivors, but its interesting to note that the casualties last time round included obvious companies like Qwest and Global Crossing (at the time with valuations like Amazon today), but it wasn't just the telecoms owner-operators who suffered, but also their supply chain like Nortel and Lucent. When the cloud market implodes, which bit barn & comms equipment suppliers will take a major hit?

  2. David Roberts

    Virtual Cloud?

    Just had an uncomfortable vision of Google deploying their cloud by front ending Azure, who in turn were deploying their cloud by front ending Amazon.

    Much like the dodgy financial derivatives which boosted the apparent size of the market by investing in each others products with little real customer money involved.

    1. Ken Moorhouse Silver badge

      Re: Virtual Cloud?

      Exactly that. Well, maybe a slight exaggeration, but this is what I had in mind.

      The Cloud Bubble could learn from the Dot Com Bubble. Historically when investors buy-in to a company they looked at tangible assets. In a Bubble era investors were/are being asked to forgo that analysis.

  3. Mage Silver badge
    Facepalm

    Tears

    It will end in tears. I hope not the end of civilisation.

  4. Anonymous Coward
    Anonymous Coward

    This is what happens when everyone is working with a different definition. I would probably just make stuff up too if I were in these executives' position. Lets call everything cloud! Who is to say we're wrong?.... IBM is clearly the worst offender of those mentioned. Their annual run rate of properly public cloud, the same services offered by AWS and Azure, is just a fraction of a fraction of what they report as cloud. IBM includes things which are not even remotely related to cloud as cloud. For instance, IBM counts SVC as cloud because it is virtualized (taking a cue from VMware's bogus definition of the cloud that cloud = virtualization)... on premise storage hardware which has been around since before anyone had heard the term cloud, is cloud. Cisco and HPE are way worse than IBM though... Those guys don't have a cloud product of any sort and they are claiming cloud revenues. A good way to understand the cloud revenue would be to ask: 1) Does it run in a customer's on premise data center or in your data center? If it runs in a customer data center, it is not cloud. It is just hardware. 2) Are the physical infrastructure resources dedicated to one customer or are they shared, multi tenant environments? If they are dedicated systems, that is not cloud. It is hosting. There would still be some ambiguity, but that would cut down on 90% of the genuinely spurious claims.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Other stories you might like