Rise of the Full Stack Vendors

In a recent Datanauts podcast Chris Wahl was discussing Azure and Azure Stack with fellow Rubrikan Mike Nelson and Microsoft’s Jeffrey Snover (If you haven’t already, you can check out the podcast for yourself- Datanauts #148). Jeffrey made some interesting observations about the changes in alignment of some of the major IT vendors over time (this discussion runs from 25min to 29min into the podcast).

He detailed how the big players (DEC, IBM etc) had started with a “vertical” alignment by building their own chips, boards, operating systems, and applications. This was followed by a dis-integration where the industry shifted to a “horizontal” alignment- chips from Intel/Motorola , Operating Systems from Microsoft/Sun, and applications and services coming from a wide range of vendors. He goes on to posit how cloud vendors are turning the industry back towards a vertical alignment, and gives the example of how Microsoft are designing their own chips (FPGAs, NICs, servers , the new “Brainwave” chip to accelerate AI etc)  right through to software; all to create the Azure Cloud.

This idea got me thinking about how this is happening elsewhere in the industry, and what the future might hold.

This realignment can be seen across the major IT manufacturers- in recent years Dell- traditionally just a client and server PC vendor- has formed Dell Technologies, picking up tech such as Force10’s network, EMC’s storage, and VMware’s hypervisor. This now puts them in that vertical alignment of controlling their own enterprise stack from the client device through the network to the server hardware and the hypervisor sat on it. In an on-premises setup Dell can provide the infrastructure from the end of the user’s fingers to the start of the Operating System or Container.

Amazon have started from the other direction- AWS as a cloud provider owning their own chipsets. servers, storage, and networking. They own the datacentre end of their customers today, but how long is it before we see the successors to the Kindle Fire devices and Alexa-connected displays being pushed as the end-user device of choice. Everything between the user and the application would then be in their single vertical.

We see similar activity from Google. Their cloud platform stretches down to their Android and ChromeOS operating systems, the Chrome browser, and even into hardware. Although (similarly to Amazon) the endpoint devices are today largely aimed at the consumer market, as the commoditisation of IT continues there’s nothing stopping this leaking into the enterprise.

However, these vertical orientations are not to the exclusion of horizontal partnerships and we’ve seen a lot more of that over recent years. For example VMware partnering with AWS, IBM, and Microsoft and Google for Cloud provision, or Dell-EMC powering the on-premises Microsoft Azure Stack, or IBM providing their software on Azure.

So will this continue, and what does the distant future hold? Looking far into the tech future is always guesswork, but if I had to bet I’d suggest that this alignment model will eventually swing back as these sort of things always seem to go in cycles. The verticalisation (new word?) will carry on for the next few years but over time the customers demand more choice and (in enterprise at least) less of the perceived risk of “vendor lock-in”. Eventually this leads to a tipping point, fragmentation of the stack and a turn back towards that horizontal alignment we are moving away from today.

Thanks Datanauts for the inspiration behind this, and #Blogtober2018 for convincing me to do more long-form opinion posts.

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