Mature Megavendors Gaining Ground in Cloud Computing 

Oracle, IBM, and Dell See Impressive Gains

Daren Brabham PhD | ETR Research   

| February 22, 2024

Data from the January 2024 Technology Spending Intentions Survey (TSIS) showed notable Net Score growth for large, mature tech companies, such as Oracle, IBM, and Dell Technologies. In particular, these established megavendors saw impressive gains in spending momentum in the Cloud Computing sector (see Figure 1). While these vendors are still outpaced by a considerable margin in this sector by the Big Three public cloud vendors – AWS, Microsoft Azure, and Google Cloud Platform – these recent gains are still eye-opening, perhaps signaling the closing of a gap between the Big Three and the mature megavendor group.

Figure 1. According to the January 2024 Technology Spending Intentions Survey (TSIS), Dell, Oracle, and IBM, along with Akamai, have the largest Net Score gains since April 2023 among vendors in the Cloud Computing sector (N>75).

One probable explanation for recent jumps in spending momentum for these established vendors in the Cloud Computing sector could be due to recent freezes in IT spending for new projects during COVID and the subsequent economic slowdown. This pause in new spending allowed mature vendors to make up ground in their technical capabilities and breadth of product offerings. By the time organizations’ IT budgets thawed in late 2022, the technical differentiation between the cloud offerings from Oracle, Dell, and IBM compared to Microsoft Azure, Google Cloud Platform, and AWS was beginning to narrow.

A DevOps Lead and Release Manager for a midsize tech enterprise noted that there is a "perception some people have" about Oracle, for instance. He said Oracle "arrived a bit late" to the cloud, getting beat by the Big Three public cloud platforms. But "they had to recover from that, but nowadays it's a stable cloud. They bet a lot on low prices without compromising quality. They have SLAs for performance," and in the end all the cloud providers are by now "quite similar." The inertia of staying with an established megavendor, with which most organizations have sizable and long-standing footprints, is also a driving factor for organizations; many firms find existing licenses with complex ERP, CRM, databases, and other systems offered by megavendors to be compelling reasons to give their cloud computing offerings a more thorough vetting.

Though ETR Insights interviews and much grumbling in the industry press have surfaced concerns – or even regret – about organizations’ cloud investments, particularly around out-of-control costs, enthusiasm for the cloud remains generally strong. ETR's annual Cloud Computing survey was most recently run in August of 2023 and found that more than half of companies’ workloads would be in IaaS or PaaS cloud offerings by the start of 2025. What seems to have changed in the past year or so, however, is which vendors in the cloud computing market are sharing in that growth. To be clear, the Big Three public cloud platforms – Microsoft Azure, AWS, and Google Cloud Platform – maintain the strongest standing in both Net Score and Pervasion in the Cloud Computing sector, by a considerable margin. But whereas Oracle, Dell, and IBM were once seen by many IT decision makers as sector laggards in technical capability, the sentiment today seems to have elevated these three mature megavendors into the same conversation with the Big Three. Long-established relationships and existing enterprise apps, database, and infrastructure licenses with Oracle, Dell, and IBM seem to be seeding fruitful conversations about pricing negotiations and bundling for some IT decision makers, too, making further investment in these tech stacks more appealing. Time will tell whether this sudden surge in spending momentum for Oracle, Dell, and IBM in the Cloud Computing sector will remain a trend or fade away as a one-off blip

The full report examines trends from the most recent TSIS data for these three established megavendors with a presence in the Cloud Computing sector. In addition to this analysis, full January 2024 Technology Spending Intentions reports are available on the ETR platform for IBM, Dell Technologies, and Oracle. ETR subscribers can view the full report here. Not a subscriber? Start a free trial to gain access.

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