Few activities are more perilous than predicting the future of the tech industry. That goes double for cloud computing forecasts. Yet, with thoughtful deliberation and the appropriate amount of caution, you can get a fairly accurate read on what’s to come in the increasingly competitive cloud services market.
Here’s a quick look at several trends evident among leading cloud vendors and technologies through the first half of 2016, along with a look ahead at what awaits us for the second half of the year, and on through the next decade.
Google Makes a Major Cloud Play
The company synonymous with search isn’t used to looking up at the leaders in its markets, yet according to figures compiled by Synergy Research Group, Google’s 4 percent share in the cloud services market in fourth quarter 2015 makes it an also-ran behind Amazon (31 percent), Microsoft (9 percent) and IBM (7 percent). Market Realist’s Puneet Sikka reports on the share numbers in a May 31 article.
Google’s first-quarter 2016 earnings call highlighted three recent actions by the company that signal its intention to grow its cloud business:
- Google has gained experience through its internal cloud operations that it is now ready to share with its customers.
- The company is integrating its artificial intelligence (AI) and machine-learning expertise with its cloud services for enterprises.
- VMWare co-founder Diane Greene was appointed to lead Google’s cloud business in late 2015.
AWS, Microsoft Azure Continue to Raise the Cloud Services Bar
Even with its depth of technical expertise and seemingly endless resources, Google faces a formidable challenge in taking share away from Amazon and Microsoft in the skyrocketing cloud services market. Among the 722 new features added to AWS in 2015 was the Aurora relational database that Amazon claims is its fastest ever, according to Sikka. The Amazon QuickSight (AWS data analytics and visualization) tool has helped AWS sustain quarterly revenue growth near or above 50 percent for five consecutive periods.
Meanwhile, Microsoft’s 2015 revenue from Azure, Office 365 and Dynamics CRM increased a whopping 140 percent year over year. Microsoft’s continued ascendance, as well as that of other cloud service providers, is attributable in part to a trend highlighted in RightScale’s 2016 State of the Cloud Survey: Companies using the cloud run apps on an average of 1.5 public clouds and are experimenting with another 1.5 public clouds. They’re also using 1.7 private clouds on average, and they’re experimenting with 1.3 private clouds.
The RightScale survey notes that while AWS’s share of the public cloud market was flat at 57 percent in 2015, the number of workloads per customer increased, which helps account for the service’s 69 percent jump in revenue for the year over 2014’s figures. Venture Beat’s Jordan Novet digs into AWS’s 2015 financials in a Jan. 28 article.
Vendors Called Out for ‘Cloudwashing’
The rosy outlook for cloud services through this year and beyond is echoed in Gartner’s Cloud Computing Primer for 2016 (Gartner account required to access). Yet, cost and security continue to be two primary obstacles to cloud adoption. One other impediment to success identified by Gartner researchers is the tendency of cloud vendors to make unsubstantiated claims about their offerings. Gartner refers to this as “cloudwashing.”
The industry has matured to a point where most obstacles to cloud adoption are non-technical, according to Gartner: adapting the organization’s culture, skills and management to a cloud framework; and winning the hearts and minds of end users, who often are hesitant to overcome their innate fear and mistrust of the cloud model. (Yes, your sensitive data is indeed safer on a cloud server than it is on your local hard drive.)
Much of the confusion that Gartner lumps into the “cloudwashing” category relates to a lack of clear definitions of cloud terms such as “infrastructure as a service” and “platform as a service”—two categories whose distinctions will continue to blur.
They’re All ‘Hybrid’ Clouds—or Soon Will Be
Also becoming less discernable are differences between public and private clouds, both of which are morphing into versions of hybrid cloud, according to Gartner. In fact, it’s not unusual for enterprises to have multiple cloud strategies being implemented in parallel. An overarching aspect of this trend is that the fundamental role of IT is changing from a service provider to a service broker.
The Gartner survey points out that IT pros now wear several hats and switch between roles in the course of a given day, from provider to broker to consumer. The hybrid model itself is evolving from “public/private” to “fast mode/safe mode,” according to Gartner. Confusion surrounding the term “hybrid” as it relates to cloud services is likely to continue with the rise of mobile devices, where “hybrid” refers to apps that are both web-based and native to the mobile platform.
One way to ensure cloud customers and vendors are speaking the same language is to focus on cloud outcomes rather than the means of achieving those outcomes. Customers need to define what results they expect from their cloud efforts—financial effectiveness, tapping the expertise of cloud providers, delivering immediate results to business consumers and making overall IT operations more efficient, for example.
What’s in Store for 2017 and Beyond?
The popular buzzwords resurface when you scan the prognostications of the cloud experts: microservices, containers, open source. Yet customers—particularly those in enterprises—have the same concerns about cloud computing now that they had when the technology first emerged a decade ago: security, risk management, governance, compliance and disaster recovery. How much progress is being made on these fronts?
Perhaps those areas will be addressed not by traditional IT providers but instead by web-centric services and other non-IT companies that develop and market cloud solutions for their vertical. You can’t blame non-cloud service providers from salivating at the prospect of grabbing a share of the booming cloud market. According to Forbes’ 2016 Roundup of Market Estimates, cloud forecasts are dominated by a single preposition: “Up.”
- Public cloud IaaS hardware and infrastructure software revenue up to $38 billion in 2016 from $25 billion in 2015 and jumping to $173 billion by 2026 (Statista)
- Worldwide public cloud revenues up to $117 billion in 2017 from $80 billion in 2015 and $167 billion in 2020 (TBR)
- Cloud’s share of annual IT budgets up from 29.8 percent as of January 2016 to 43 percent by January 2018 (IDC)
No matter your organization’s current state of cloud adoption—whether dipping your toe, or in with both feet—you’ll future-proof your cloud investment by relying on vendor-agnostic application-management services. There’s no better way to take advantage of what the cloud has to offer now while ensuring you’re positioned to benefit from tomorrow’s cloud enhancements.
