Thursday, September 23, 2010

Top 11 Cloud Companies Versus IDC and Gartner estimated market sizes

The purpose of the table below is to estimate very roughly how much business in terms of revenues the cloud  companies collect today. Then I compared these numbers to much publicized IDC $56B per year and Gartner $146B per year. Assumptions:
  • I included top 10 2009 companies, top 15 2010 both from Network World
  • I added new names suggested by contributors to Google cloud computing discussion group (over 40,000 readers) 
  • I added the company  names suggested as comments to my previous blog entry
  • I divided the revenues as "Licenses sales and Services", "Hardware Sales" considered for Oracle only and advertising income, which is key
  • My research for revenues is minimal and I used these simplifications
    • Any cloud company that does not disclose revenues, gets $10M per year default assumption. This is generous for many start-ups, usually struggling with the first millions,and could be an underestimate for some other companies. Overall the number is adequate
    • Google advertising data is from published data
    • Oracle cloud income come from their estimated business on Amazon. and "cloud-in-box" future sales
    • The table does not list other hardware vendors, who also supply cloud service companies: Dell, HP, IBM
    • The table does not include Hadoop and analytics companies, as promising startups, like Cloudera are struggling to find a business model. If we include Cloudera and assign a default $10M in revenues, it will make no difference in final conclusion
Looking at the data, here are some starling conclusions:
  1. The 29 companies listed had revenues in Licenses ad Services just over $10B per year.That is barely 19% of the total market estimate of IDC ($56B per year). As most cloud companies are software and services, the current market size could be, say $15B , but not$ 56B !!!
  2. The discrepancy may be that IDC counted the hardware sold by Dell, IBM, HP, Sun (now Oracle) as part of the cloud market. Thus is a fuzzy assumption, as one does not know for sure, whether the 1,500 boxes Sales Force bought are the part of the cloud market, just 10,000 more servers were sold to other enterprises where we may guess will be used for clouds
  3. The definition of "cloud-in-a-box" will make easier to include the hardware as part of the cloud market
  4. The advertising revenues in cloud market size is 3x larger than software and services revenues
  5. In terms of revenues, Google and Yahoo pocket three quarters of the entire cloud revenues, almost exclusively through advertising and marketing services
  6. 11 companies in the next bullet capture almost 100% of the total revenues.

    • Google
    • YAHOO
    • Microsoft
    • Oracle
    • Amazon
    • SAVVIS
    • GoGrid
    • NetSuite
    • Rackspace
    • RightScale

    All the other 18 companies share a meager 0.5% of the market :-(
    Not much left over  from cloud sw and service market ?
     The take away is this: we usually call any company providing software and  service for cloud industry. This market is still very small and it is 10% of the total Gartner number including marketing services and add revenues. (Assumed $15B versus $146B per year)
    For all practical purposes, the cloud market for software and services is $15B maximum. This is realistic. This is what we should plan before. Don't base your business plan on market share, but on named customers, say 20, that you know for sure will buy from you once you have the product ready
    As earliest cloud adopters, Google and Yahoo cleaned the bulk of the revenues that go into their pockets comfortably

Revenues (US$ millions per year)

Company Lic & Services Hw Adds Total % Total Cum.
Google 762
23,000 23,762 59% 59%
6,000 6,100 15% 74% 5,000

5,000 12% 86%
Microsoft 2,000

2,000 5% 91%
Oracle 800 1,000
1,800 4% 96%
Amazon 600

600 1% 97%

300 1% 98%
GoGrid 250

250 1% 99%
NetSuite 200

200 0% 99%
Rackspace 100

100 0% 99%
RightScale 100

100 0% 100%
Enomaly 10

10 0% 100%
Abiquo 10

10 0% 100%
Boom! 10

10 0% 100%
Cloudshare 10

10 0% 100%
Crosscheck Networks 10

10 0% 100%
Elastra 10

10 0% 100%
Egnyte 10

10 0% 100%
Good Data 10

10 0% 100%
Kaevo 10

10 0% 100%
Nasuni 10

10 0% 100%
Navajo Systems 10

10 0% 100%
Symplified 10

10 0% 100%
Terremark Worldwide 10

10 0% 100%
Viewfinity 10

10 0% 100%
Virtual Ark 10

10 0% 100%
VMlogix 10

10 0% 100%
CloudSwitch 10

10 0% 100%
Greenqloud 0

0 0% 100%
T O T A L 10,382 1,000 29,000 40,382

Market Estimate, no advertising IDC 56,000

Market Estimate with Advertising, Gartner


% 19%


Thursday, September 16, 2010

The Fate of Oracle’s Grid Engine , fall 2010

For more details see my blog on

The growing concern in HPC circles about the fate of Oracle Grid Engine (OGE) after the merger with Sun in February 2010 is the catalyst for asking thiis rhetorical question.

  Oracle strategy seems focused primarily  to monetize immediately new products from acquired companies. OGE monetary potential visible with the naked eye is misleading. The product itself and the know how of its’ engineers can create new solutions in Oracle impossible to acquire from other companies, because they don’t exist yet.

For now the access to  Oracle Grid Engine product page  is complicated. If one does not know anything about what Oracle Grid Engine can do, it is highly improbable to discover this product by simply browsing Oracle's web site.

A seasoned executive from HPC industry commented: “Add to it the convergence of the IT infrastructure operating enterprise and HPC services then you will see that Oracle blocks out an opportunity if they don't listen to the HPC side of their customers and doesn't give them suitable products.”

Can  Oracle  wait until they can buy some company which has shown how to bridge enterprise and HPC computing  rather than be the innovator themselves?  My answer is No.
Here is an  example of where Grid Engine can bring a competitive edge for Oracle. OGE can help Oracle being very competitive on smart power grid market. Perhaps they did not realize this yet. But they will.
The new $200B per year smart power grids has no dominating product ready. President Obama has called for the installation 40,000,000 smart meters and 3,000 miles of transmission lines. Venture Capital companies like  Nth Power,  Foundation Capital, New Enterprise Associates, Kleiner Perkins Caulfield and Byers, Siemens venture arm and many others are actively investing. Cisco just acquired a start up Arch Rock, a smart grid monitoring company. The market is there, but the products are incipient.

Tuesday, September 07, 2010

Top 15 Cloud Computing Companies

According to Network World  these are the cloud  companies to watch  in May 2010:
  • Abiquo
  •  Boom!
  • Cloudshare
  • Crosscheck Networks
  • Elastra
  • Egnyte
  • Good Data
  • Kaevo
  • Nasuni
  • Navajo Systems
  • Symplified
  • Terremark Worldwide
  • Viewfinity
  • Virtual Ark
  • VMlogix
A year before, in May 2009, Network World  listed 10 companies to watch
  • Amazon
  • Enomaly 
  • Google
  • GoGrid
  • Microsoft
  • NetSuite
  • Rackspace
  • RightScale
Do you agree? In 2010, all are start ups yet to make a name. In  2009, we had all big companies listed

Please delete or add companies to watch in September 2010, and a short explanation why  in the comments section. The idea is to keep the numbers to 10 top cloud companies

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