There is a lot of hoopla out there about the cloud, especially since dozens of startups have gone public over the last year or two, and many more are in the queue. Here are what I believe to be the top five cloud predictions for the coming years:
1. More application availability on the cloud
With most new software being built for cloud from the outset, it is predicted that by 2016 over a quarter of all applications (around 48 million) will be available on the cloud (Global Technology Outlook: Cloud 2014: A More Disruptive Phase).
This makes sense when you consider that about 56 percent of enterprises consider cloud to be a strategic differentiator, and approximately 58 percent of enterprises spend more than 10 percent of their annual budgets on cloud services. The Everest Group, in their recent Enterprise Cloud Adoption Survey, further argues that cloud adoption enables operational excellence and accelerated innovation.
2. Increased growth in the market for cloud
According to Gartner, the cloud is here, and it is accelerating globally. Based on their forecast for 2011-2017, Gartner expects adoption to hit $250 billion by 2017. In the fourth quarter of 2013, we saw this prediction supported by enterprises worldwide—enterprises that were increasingly relying on cloud to develop, market and sell products, manage supply chains and more.
In the same forecast, Gartner also suggested that the worldwide software as a service (SaaS) market would grow at an astounding yearly growth rate of 20.2 percent! This means it will be growing from $18.2 billion in 2012 to $45.6 billion in 2017. With that kind of growth expected, it is no wonder that many are companies are rebranding anything that makes sense “as a service” to get a piece of the pie.
3. More hybrid cloud adoption
Gartner proposes that 50 percent of enterprises will have hybrid clouds by 2017. As we see more and more companies adopt cloud, we see CIOs crafting well-thought-out strategies that include cloud. However, pure cloud implementations are the exception and not the rule. And this is to be expected.
Simply put, it would be very difficult, if at all possible, to move everything wholesale to the cloud because of the complexity of today’s environments. The hybrid cloud—a mix of on and off premises—offers the best of both worlds: a combination of strengths allowing organizations to achieve the performance of on-premises solutions yet also the management convenience of the cloud business model.
4. Increased development for the cloud
More development is going to go to the cloud. According to Evans Data Corporation, there are more than 18 million software developers worldwide yet less than 25 percent are developing for the cloud today. We can expect that as cloud continues to be adopted, more developers will develop for the cloud—especially when you consider that 85 percent of the new software being built today is for cloud according to IDC’s article, “IT Cloud Services at the Crossroads: How IaaS/PaaS/SaaS Business Models are Evolving.”
IDC concurs with Gartner regarding the growth of these IT services and suggests that 20 percent of all application revenue in 2014 will be generated by SaaS. IDC further suggests that there will be an increase in third-party, commercial and enterprise developers and contributors to cloud application ecosystems, marketplaces and application programming interface (API) exchanges by 2017.
5. More innovation because of cloud
Increased competition in the cloud space will give way to better products, services and innovation. This last point is a little counterintuitive for any of us that have read Geoffrey Moore’s book, Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers. Moore writes that after a vendor establishes a new product or service, its pace of innovation drops. Moore suggests that this occurs because companies need to help their clients adopt the new innovative offering.
Moore named his book Crossing the Chasm after the phenomenon that refers to how companies need to become more like their existing competitors in order to achieve mainstream success. However, this is not what we have seen in the industry so far. In fact, the pace at which organizations are innovating appears to have sped up—at least from my perspective.
I noticed other trends in addition to the ones I have talked about here, but for these I did not see the data support the prediction. For example, there is the trend that says developers are becoming more important. I have always seen development as a key skill set, but I’m not sure that cloud will elevate its standing. You get the idea.
What other significant trends can you spot?
Let’s start a conversation. Let me know what you think here or connect with me on Twitter @GeryMenegaz.
Chief Architect – IBM Global Technology Services