I’m just wrapping up the Q3 report, which should soon be published here. In doing so, I’m forced to think about what has happened in the cloud computing space in the last 3 months. Also, what I think will occur toward the end of the year, and next year.
While it could be a bit early to begin making calls around the cloud technology space in 2015, I think the more mature the cloud computing market gets, the easier it is to predict. Predicting any technology market trajectory is really a matter of understanding the near past, the existing patterns, and then using those patterns to pick the likely direction of the market, even the events that are like to occur.
We do this exercise to get those who are moving to cloud to think about what’s next, and dial the changing vision into their cloud computing plans so they make wise investments in time and money. Here’s what I see:
First, there will be more market convergence around the three major public cloud computing players; Google, AWS, and Microsoft. This one is about as easy to call as the sunset. Enterprises moving to public cloud are investing in these three companies’ products. Moreover, cloud computing is where these big three players are placing their technology bets right now, and this will occur for the foreseeable future.
While many had thought that this would be race of a dozen or so public cloud providers, the market has taken care of most of them. Indeed, smaller cloud providers, such as Rackspace, could not keep up with the investment needed and have moved to a narrower and more niche-oriented focus.
You can count on anybody who is not AWS, Google, and Microsoft to grab a smaller piece of the market and hold on for dear life. Figure a few will move to the managed services space, such as Rackspace, while others will provide a specific area of public cloud services, such as “bare metal” clouds, and other providers will focus on specific verticals such as healthcare or finance.
Of course, then you have to look at the battles taking shape between the big three. The patterns in 2015 will be who can invest faster. Count on Google to gather more relative momentum than both AWS and Microsoft. Why? Google has deep pockets to make the right investment, and already knows how to do Web-scale systems.
AWS won’t slack off either, and this company will continue to dominate the public cloud space, with its relative rate of acceleration slowing down when compared with both Google and Microsoft. Microsoft will obtain more SaaS growth around its office projects, which will drive profitability. They will continue to be extremely aggressive on price with the Azure deals, and that will put price pressures on both AWS and Google.
Second, enterprises will become more TCO (Total Cost of Ownership) aware, and this knowledge will slow or stop cloud adoption within some enterprises. The fact of the matter is that cloud computing is not always cost effective, and not always a good fit. However, that’s typically not understood until after the deployment of the first few cloud computing projects, when the cost and benefit issues are better understood.
In 2015, we will become better at running the numbers for the cost benefit analysis of cloud-based platform usage within the enterprise. We’ll hear more about the “cost of risk,” value of resilience, service reuse benefits, and a lot of things that most enterprises never considered until they got the bill.
Third, we’ll see the continued fall of the private cloud, yet another very easy prediction to make. Just follow the trend.
Private cloud was once the way that many enterprise software players wanted you to go, because it allowed them to continue selling on premise software systems. These days, most enterprises opt for public cloud over private. The reasons are obvious. There is the cost of private clouds, once you consider the hardware and software costs, and the explosion of capabilities now found in public cloud offerings.
The fall of the private cloud will have some collateral damage as well. Private cloud technology providers, many of which leverage OpenStack, will have a tough time of it in 2015. Moreover, the OpenStack standard itself could find that the falling usage of private clouds means less use of OpenStack.
Fourth, the government will become even more of a concern for the growing cloud computing space. Yes, the NSA scandal was surprising, but more surprising was the way the government mismanaged the fallout from the disclosures.
Enterprises looking to utilize public clouds expressed huge concerns to cloud providers. A as a result, the cloud providers began to push back on the government surveillance programs, either through lobbying or lawsuits. Indeed, Twitter announced just last week that’s it suing the FBI to gain the right to tell their users that the FBI could be going through their data. Cloud providers are ramping up aggressive data encryption subsystems, which will surely cause legal action from government agencies that claim a right to see most data in the public clouds. The end result will be scared existing and potential cloud users, thus a slower growth around the use of cloud until conflicts, and bad press, begin to subside.
Finally, the increased complexity around most enterprise cloud deployments will become even more complex in 2015. Most enterprises leverage more than one cloud brand and type. Most have as many as 10 public clouds, including IaaS and SaaS, as well as a mix of some private clouds, and, of course, many traditional systems. While often called multi-cloud, this is really how most enterprises adopt technology, allowing many distributed and loosely coupled project teams to pick the technology, and then later attempt to bring it together as many technologies that are centrally managed.
Adding to the complexity trend is the fact that those cloud technologies leveraged by shadow IT are now being passed back to central IT for management. Enterprise IT is ending up with dozens of cloud technologies, many of which provide redundant capabilities. While there is some normalization and migration to a less complex sets of cloud services, it’s difficult to migrate from many of these storages systems, databases, and applications platforms. This adds more stress to enterprise IT shops, and will actually become one of the negative outcomes of leveraging cloud-based technologies.
No matter if these predictions come true in part or in whole, the patterns of adoption of cloud computing technology will change less and less as the technology matures. As time progresses, cloud computing itself could become less of a buzzword, and more just a known set of patterns of computing, like many other patterns that came before it.
