2015 Forecast The Sun is Out for Cloud Computing

2015 Forecast: The Sun is Out for Cloud Computing

6 minute read
Frank Palermo avatar

The cloud space continues to evolve at an astounding pace. As recently as 12 months ago, we were still educating many clients about what they could achieve with cloud computing.

We tirelessly explained the differences and benefits of options such as Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS). We also debated the suitability of various architectural alternatives, like private, public or hybrid cloud.

While there continues to be some mystique around the use of the cloud, it’s safe to say that many enterprises have successfully adopted it.

The New Standard

According to PC World, cloud has become mainstream with adoption to some degree by nearly 90 percent of businesses. What’s more, according to NSK, an information technology consulting and outsourcing firm, 82 percent of companies that have moved to the cloud are saving money.

Gartner not only named cloud one of the top technology trends for 2015: It also proclaimed cloud as the new standard for application development. According to Gartner, "Cloud is the new style of elastically scalable, self-service computing and both internal applications and external applications will be built on this new style.”

They say a rising tide lifts all boats, and nothing could be truer in the cloud vendor space.

While Amazon Web Services (AWS) was the de-facto standard for many years, players like Microsoft and IBM have now entered the race. Their entrance not only validates the increasing opportunity for cloud, but also helps accelerate the pace of innovation and enterprise adoption.

Synergy Research estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS and private & hybrid cloud) have now passed the $4 billion milestone, with trailing twelve-month revenues exceeding $14.5 billion.

All of the major players (including AWS, Microsoft and IBM) are now claiming quarterly revenues of around $1 billion. All of the major players are making progress.

Vendor Offerings

IBM launched its cloud offering as a result of the $2 billion acquisition of SoftLayer in July 2013. The company has been reporting that it has added 6,000 customers, built out its partner network and now has 28 data centers fully operational.No one can argue that IBM has a strong position in the private and hybrid cloud infrastructure space,but having said that, it still isn't as top of mind as AWS.

Microsoft was a late bloomer as usual, but quickly stepped up its game under CEO Satya Nadella's Cloud First mantra. The company is making steady progress with the adoption of Office 365, which could become a $1.7 billion revenue stream for the Microsoft Office division.

The more interesting metric is the progress that the Azure platform has made, especially with offerings like the Hadoop based HDInsight. Microsoft's commercial cloud revenue grew 128 percent last quarter, while server products and services revenue increased 13 percent.Microsoft, once nearly five years behind AWS, is now probably only about 12 to 18 months behind. That's remarkable progress in a short time.

But AWS is a different league altogether. Its innovation engine continues to roll on to maintain its differentiation. It once again released a raft of new offerings at its annual re:Invent conference this past November. For instance, to address one of the top cloud adoption objections, it created three new services to complement its existing security and compliance capabilities. The three – AWS Key Management Service, AWS Config and AWS Service Catalog — are aimed at helping organizations manage custom keys for encryption, improve resource visibility and auditing, and enable standardized product delivery, respectively.

At AWS re:Invent, Amazon solidified its position as the leader of the cloud.

But IBM and Microsoft are not sitting still and there are other players like CenturyLink, CSC, Verizon Terremark and Google that are fighting their way into Gartner’s Cloud visionary quadrant.

Stop Fighting the Cloud

So what does this all mean for enterprises?

Learning Opportunities

For one, organizations need to stop fighting the cloud. Cloud needs to be part of your formal IT portfolio and should no longer be treated as competition. In 2015, we will start to see a parallel between companies that are embracing cloud and their overall market performance.

Here’s what you can do to stay ahead:

1. Go Beyond IaaS

IaaS is so 2014! Most companies have already invested in private cloud infrastructures or have moved some of their workloads to the public cloud. It’s now time to move up the value chain and seriously start leveraging PaaS capabilities. You can take advantage of PaaS tools from current IaaS providers or use open source platforms like Docker to build, ship and run distributed applications. 2015 is the year to get your Cloud based applications out there.

2. Be Smart About Your Forklift

In 2015, we are likely to see a mass migration of applications to the Cloud. But enterprises should take the time to assess those applications to ensure they are suitable for the cloud. Don’t make the mistake of moving your legacy IT estate to the cloud without spending the time to rationalize, simplify and architect it for the new cloud development paradigm.

3. Use the Cloud for Your Big Data

If you are being inundated by new sources of data and have not yet turned to the cloud to help process and analyze this data, then shame on you. With the plethora of cloud data services available like AWS DynamoDB, RDS, Redshift, SimpleDB, Kinesis or Microsoft’s HDInsight, there is no reason you should be procuring hardware and software infrastructures for processing your big data.

4. The Cloud Makes DevOps Easier

The Cloud and DevoOps are a match made in heaven. DevOps was born out of the need for organizations to become more agile in their IT and development operations. Cloud is all about agility.Cloud services let IT departments shift their focus away from commodity work, such as provisioning hardware or patching operating systems, and spend it instead on adding value by collaborating with the business. Cloud can enable greater business agility by making IT infrastructure much more pliable.

5. Streamline Your Experiences Through the Cloud

Cloud is becoming the digital glue or new orchestration layer for building applications in the modern era. It’s basically the world’s new Service Oriented Architecture (SOA). Adopt REST as the way to communicate with back office systems. Services like Amazon Cognito make it easy to save user data and context across devices with no back-end code or infrastructure. Use these capabilities as a method for providing streamlined mobile experiences. This is where the world is headed.

The Future

Cloud is becoming a much larger movement than just a standalone virtualization capability in IT. It is now a core ingredient of how organizations are accomplishing their digital transformations.

Enterprises have made a lot of progress with their cloud initiatives throughout 2014 and the pace is doing nothing but growing faster. My advice: Let the sun continue to shine through the clouds in 2015.

Title image by David DeHetre (Flickr) via a CC BY-NC-SA 2.0 license.

About the author

Frank Palermo

Frank Palermo brings more than 22 years of experience in technology leadership across a wide variety of technical products and platforms. Frank has a wealth of experience in leading global teams in large scale, transformational application and product development programs.

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