A field guide to cloud computing: current trends, future opportunities

1Executive Summary

As cloud computing has grown in both scope and importance, it has become increasingly important to keep up with state-of-the-art developments. The problem is that cloud computing encompasses a number of distinct subsectors, all evolving in their own unique ways at their own paces. This report examines Infrastructure-as-a- Service (IaaS), Platform-as-Service (PaaS), Software-as-a-Service (SaaS), cloud storage and private clouds, assessing the current state of each sector and offering informed insights on where each is headed.

On a broad level, the current state of cloud computing across all sectors is that interest and plans are sky-high but actual usage still lags. There are notable exceptions, however, with regard to SaaS and cloud storage, because cloud-based email and backup services, for example, which are incredibly convenient, are broadly applicable and relatively risk-free. Where cloud computing is in use, it appears that big-name incumbents such as Amazon Web Services, Rackspace, Salesforce.com and Google still receive the lion’s share of users.

Whatever the adoption rates, though, cloud providers of all types have their foot on the gas pedal when it comes to innovation. From IaaS providers offering advanced hardware architectures and services to PaaS startups making entire application stacks literally a push-button experience, the cloud looks like a much more compelling place to host one’s applications with each passing day.

No company trying to sell cloud computing can afford to be lax on innovation, either. The rapidly growing numbers of providers in areas such as SaaS and private clouds — and the huge amounts of venture capital pouring in — indicate that competition is fierce. This incredible growth will ultimately lead to consolidation, but everyone must keep innovating until adoption picks up and true leaders (apart from today’s household names) emerge in these new sectors.

There are still some major concerns with the cloud, though, particularly around security and lock-in. A number of open-source projects and products are now attempting to resolve the lock-in problem, but there’s still a long way to go. Security, too, is the focus of much talk and a fair amount of activity from industry organizations, but it looks as if it might take a damaging breach to kick-start an industry-wide approach to resolving some core issues.

Going forward, companies within all cloud computing sectors will continue to add new features and capabilities, and they will attempt to improve their palatability to large enterprises willing to spend lots of money on IT. On a broader scale, however, we will see improved integration across the various cloud computing sectors, as customers grow tired of their myriad cloud services operating like silos — one of the major problems with the legacy IT practices that cloud computing fundamentally seeks to change.

Assuming cloud adoption takes off as data suggests it will, cloud services integration will provide major opportunities for cloud providers and software vendors willing to open up their platforms to the greater cloud ecosystem, as well as for third parties hoping to play the middleman in helping to bring together many different services.

The report includes data from the Future of the Cloud survey conducted by North Bridge Venture Partners in conjunction with GigaOM Pro and the 451 Group, as well as numerous charts illustrating the concepts discussed.

Stacey Higginbotham provided additional writing and analysis.

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