Non-cloud technologies lumped into cloud revenue makes for a cloudy financial picture for users
Vendors in the cloud computing market hype up the revenues they earn from this emerging technology, making it difficult for customers to truly judge the strength of a vendor’s financial health and difficult to make comparisons between vendors, a report from Gartner finds.
Analysts David Mitchell Smith and Ed Anderson say opaque reporting by vendors means customers should evaluate providers not based on earnings but on which offering best matches their use case.
“Assessing vendor cloud revenue claims has become more challenging, with many vendors’ IT-related businesses being complicated and nuanced,” Gartner’s Smith and Anderson write in the report, which was issued in late December. “We recommend CIOs direct their organizations to never take vendor cloud revenue at face value, and evaluate vendors on their strategy and service mix.”
One of the most common tricks vendors use is to include non-cloud technology in their cloud earnings. A vendor may, for example, include cloud-enabling technologies in their cloud revenue, such as servers, virtualization software or management tool sales. These are all components of a cloud, but are not an actual cloud service.
Some vendors lump hosted or managed hosting revenues in with cloud earnings. Those are perfectly legitimate markets, but they’re not IaaS cloud. Consulting and professional services revenue related to cloud have been found to be bundled with cloud revenue, too, in order to inflate the figure.
Frustration in evaluating revenues of emerging technology is an “age-old” issue says Jeff Kaplan with THINKStrategies, a cloud watcher. “It should be part of an overall evaluation. But it’s always been difficult to discern what money a vendor is generating from a specific product line.”
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SOURCE: Network World
Brandon Butler
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