Future of Cloud Computing Will Shatter into Smaller Things

In his talk to technology analysts, Nutanix CEO Dheeraj Pandey portends the fate of monolithic, vertically integrated cloud computing solutions.

By Ken Kaplan

By Ken Kaplan November 18, 2019

How far or long can something go against the grain? At what point does the pendulum swing so far that it must go in the opposite direction? When does big become monolithic and resemble the antithesis of true growth?

Answers to these questions point to the future of cloud computing, according to Dheeraj Pandey, founder and CEO of Nutanix, 

He believes we live in a world ruled by dispersion, where big things shatter into smaller things then get distributed. That’s why he sees today’s cloud computing market, led by a handful of very big companies, poised for a dramatic shift that will shrink cloud computing so it can be dispersed to wherever computing is consumed. Rather than centralized in a few hundred large data centers around the world, Pandey sees software innovation shrinking cloud computing so that it’s almost invisible and more easily distributed anywhere it’s needed.

Here is an edited version of his talk to technology analysts in May 2019 at the .NEXT conference in Anaheim, Calif.

Dheeraj Pandey: Why is there not an Uber of computing? 

Why did we build asset-heavy, billion-dollar mainframes, which dictate that everybody should get sucked into that billion-dollar mainstream?

And by the way, there will only be 200 of those in the world to fulfill the computing needs of 8 billion people. It goes against the grain of computing. Ideally, there should be thousands of these data centers. 

Computing has always gone through this dispersion. If you look at mainframes, they became powerful. Then Microsoft came and said you've got to disperse the computing power to desktops. When Microsoft became powerful, Apple came to compete with them on laptops and desktops, but they really competed by dispersing computing, by making it smaller. They created smartphones out of this. So this thing has to become like Uber, where service providers become suppliers in this network and that is exactly what Amazon did to Walmart.

Walmart was a fully vertically integrated supply chain company and nobody could touch Walmart. The way Amazon touched Walmart was by saying, even though I'm not fulfilling it from my warehouse, I still make money. That's how Windows displaced Macintosh in the early ‘90s. They said, look, we are going to create software and let the PC manufacturers make money as well. The market became 10 times larger. That's where Android came in against Apple saying, look, we can go into this vertically integrated hardware smartphone market. Let's create a software company out of this, and suppliers of handsets actually made Android 10 times larger than iOS itself. 

This idea that cloud has to be vertically integrated and no one else makes money is the antithesis of a half a trillion dollar market. The only way it goes from 60 or 70 billion to half a trillion dollar market is through software dispersion, and by creating a network of suppliers who basically make money along the way.

Like the way PC manufacturers made money, like the way handset manufacturers make money in Android, like the way Amazon made money against Walmart, this is why it was good for us (Nutanix). We are in this business of software. We haven't built massively large, asset-heavy facilities and 10,000-rack data centers. We have to figure out a way to survive and thrive in the opposite of Amazon. That is done by out distributing Amazon in software and making things small, maybe even half a rack for what a cloud should mean. Not just 500 racks and 5,000 racks, but what would a cloud look like at half rack? That's the equivalent of a smartphone in the world of laptops and desktops. 

The world has always gone and dispersed and distributed big things and shattered them into smaller things.

Ken Kaplan is Editor in Chief for The Forecast by Nutanix. Find him on Twitter @kenekaplan.

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