Not long ago, many would have written off the likes of the big five large enterprise IT firms as slow, lethargic, expensive and out of touch. Who are the big five? IBM (NYSE: IBM), HP (NYSE: HPQ), Microsoft (NASDAQ: MSFT), Oracle (NYSE: ORCL) and Cisco (NASDAQ: CSCO). Specifically, they are companies that provide traditional enterprise IT software, hardware and services.
Today, most of the technology innovation is coming from startups, not the large enterprise providers. Over the course of 2015, we have seen two trends pick up momentum: 1) Consolidation in the major categories (software, hardware, and services) and 2) Acquisitions by the big five. Each of them are making huge strides in different ways.
Here’s a quick rundown of the big five.
IBM guns for the developer
Knowing that the developer is the start of the development process, IBM is shifting gears toward solutions that address the new developer. Just look at the past 18 months alone.
- February 2014: Dev@Pulse conference showed a mix of Cobol developers alongside promotion of Bluemix. The attendees didn’t resemble your typical developer conference. More details here.
- April 2014: Impact conference celebrated 50 years of the mainframe. Impact also highlighted the SoftLayer acquisition and brought the integration of mobile and cloud.
- October 2014: Insight conference goes further to bring cloud, data and Bluemix into the fold.
- February 2015: InterConnect combines a couple of previous conferences into one. IBM continues the drive with cloud, SoftLayer and Bluemix while adding their Open Source contributions specifically around OpenStack.
SoftLayer (cloud), Watson (analytics) and Bluemix are strengths in the IBM portfolio. And now with IBM’s recent acquisition of BlueBox and partnership with Box, it doesn’t appear they are letting up on the gas. Add their work with Open Source software and it creates an interesting mix.
There are still significant gaps for IBM to fill. However, the message from IBM supports their strengths in cloud, analytics and the developer. This is key for the enterprise both today and tomorrow.
HP’s cloudy outlook
HP has long had a diverse portfolio that addresses the needs of the enterprise today and into the future. Of all big five providers, HP has one of the best matched to the enterprise needs today and in the future.
- Infrastructure: HP’s portfolio of converged infrastructure and components is solid. Really solid. Much of it is geared for the traditional enterprise. One curious point is that their server components span the enterprise and service provider market. However, their storage products are squarely targeting the enterprise to the omission of the service providers. You can read more here.
- Software: I have long since felt that HP’s software group has a good bead on the industry trends. They have a strong portfolio of data analytics tools with Vertica, Autonomy and HAVEn (being rebranded). HP’s march to support the Idea Economy is backed up by the solutions they’re putting in place. You can read more here.
- Cloud: I have said that HP’s cloud strategy is an enigma. Unfortunately, discussions with the HP Cloud team at Discover this month further cemented that perspective. There is quite a bit of hard work being done by the Helion team, but the results are less clear. HP’s cloud strategy is directly tied to OpenStack and their contributions to the projects support this move.
HP will need to move beyond operating in silos and support a more integrated approach that mirrors the needs of their customers. While HP Infrastructure and Software are humming along, Helion cloud will need a renewed focus to gain relevance and mass adoption.
Microsoft’s race to lose
Above all other players, Microsoft still has the broadest and deepest relationships across the enterprise market today. Granted, much of those relationships are built upon their productivity apps, desktop and server operating systems, and core applications (Exchange, SQL, etc). There is no denying that Microsoft probably has relationships with more organizations than any of the others.
Since Microsoft Office 365 hit its stride, enterprises are starting to take a second look at Azure and Microsoft’s cloud-based offerings. This still leaves a number of gaps for Microsoft; specifically around data analytics and open standards. Moving to open standards will require a significant cultural shift for Microsoft. Data analytics could come through the acquisition of a strong player in the space.
Oracle’s comprehensive cloud
Oracle has long been seen as a strong player in the enterprise space. Unlike many other players that provide the building blocks to support enterprise applications, Oracle provides the blocks and the business applications.
One of Oracle’s key challenges is that the solutions are heavy and costly. As enterprises move to a consumption-based model by leveraging cloud, Oracle found itself flat-footed. Over the past year or so, Oracle has worked to change that position with their cloud-based offerings.
On Monday, Executive Chairman, CTO and Founder Larry Ellison presented Oracle’s latest update in their race for the enterprise cloud business. Oracle is now providing the cloud building blocks from top to bottom (SaaS PaaS IaaS). The message is strong: Oracle is out to support both the developer and business user through their transformation.
Oracle’s strong message to go after the entire cloud stack should not go unnoticed. In Q4 alone, Oracle cloud cleared $426M. That is a massive number. Even if they did a poor job of delivering solutions, one cannot deny the sheer girth of opportunity that overshadows others.
Cisco’s shift to software
Cisco has long since been the darling of the IT infrastructure and operations world. Their challenge has been to create a separation between hardware and software while advancing their position beyond the infrastructure realms.
In general, networking technology is one of the least advanced areas when compared with advances in compute and storage infrastructure. As cloud and speed become the new mantra, the emphasis on networking becomes more important than ever.
As the industry moves to integrate both infrastructure and developers, Cisco will need to make a similar shift. Their work in SDN with ACI and around thought-leadership pieces is making significant inroads with enterprises.
Summing it all up
Each is approaching the problem in their own ways with varying degrees of success. The bottom line is that each of them is making significant strides to remain relevant and support tomorrow’s enterprise. Equally important is how quickly they’re making the shift.
If you’re a startup, you will want to take note. No longer are these folks in your dust. But they are your potential exit strategy.
It will be interesting to watch how each evolves over the next 6-12 months. Yes, that is a very short timeframe, but echoes the speed in which the industry is evolving.