Cloud Disruption Is Here

Jim Poole

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Over the next two years, waves of digital transformation and 3rd Platform (cloud, mobility, big data/analytics and social business) disruption will become a virtual tsunami consuming enterprise IT and business, according to IDC’s report, “FutureScape: Worldwide Cloud 2016 Predictions-Mastering the Raw Material of Digital Transformation (Nov 2015, Doc #259840).” The report’s overall message: The cloud in all its manifestations will be the inevitable enabler, with business and IT looking for ways to leverage and master the cloud as best they can.

The IDC report is a series of 10 predictions, which we will discuss in this blog series. We have reordered them into four categories around cloud: disruption, management, transformation and analytics. The first three below highlight the drivers of cloud disruption:

IDC Cloud Prediction #3: By 2018, at Least Half of IT Spending Will Be Cloud-Based, Reaching 60% of All IT Infrastructure, and 60-70% of All Software, Services and Technology Spending by 2020

Our take: In the next two years, the cloud will morph from an emerging strategy to the strategy for mastering business digitalization and third-platform disruption. Just about all next-generation, mission-critical, data-intensive applications will be (and are already being) developed and run in the cloud. Every enterprise will become something of a cloud provider of innovative services for its industry.

IDC Cloud Prediction #1: Hybrid Cloud – More than 80% of Enterprise IT Organizations Will Commit to Hybrid Cloud Architectures by 2017, Vastly Driving the Rate and Pace of Change in IT Organizations

Hybrid and multi-cloud will rule, such that by 2018, 65% of all IT assets will be housed in offsite cloud, hosting and colocation centers and a full third of IT staff will actually be employed by third-party providers. By 2017, more than 60% of enterprises will subscribe to more than 10 different cloud services.

Our take: With all of this mix of legacy and cloud-native applications, IT will seek out processes and tools to simplify operations and maintain end-to-end service levels. Performance and security requirements will drive decisions on which applications get deployed in public and private clouds and which go to SaaS vs. PaaS, etc. To enable the multi-cloud, the industry will inevitably adapt OpenStack APIs and open source container management technologies such as Docker. The challenge will be in delivering a consistent end user experience while complying with regulatory requirements.

IDC Cloud Prediction #2: By 2018, Industry Cloud Creation Will Be Seen as a Top Market Entry Strategy for IT Providers and Industrial Firms as IT and Industry Domain Experts Team Up to Remove Barriers to Entry.

Our take: Emerging “industry clouds” ̶ partnerships between cloud service providers and enterprises in a particular sector (finance, healthcare, government, retail, etc.) – will provide unique opportunities for all players. Cloud providers will get the industry expertise they need to serve the specific needs of financial, healthcare or other targeted customers. Enterprise industry cloud partners will have a vehicle for commercializing their intellectual property, breaking into new markets and enhancing market visibility. Enterprise industry cloud customers will get cloud agility and industry expertise more closely aligned with their business, risk and regulatory requirements than they do from more traditional cloud providers. Hardware and software providers will find sales moving from large numbers of enterprise customers to smaller numbers of industry clouds.

Of course cloud, multi-cloud and industry cloud will all rely on fast interconnections for performance and progress. Business processes that depend on so many partnerships and transactions among multiple players can no longer function on insecure, unreliable, long distance interconnections traveling through the more congested and riskier public Internet. Colocation centers that bring customers, partners, cloud providers and network ecosystems together in strategic global locations close to customers will offer the fast, secure Interconnection Oriented Architecture™ to power this new service paradigm.

The next blog in this series will discuss the cloud development and management tools required to support the next wave of digital transformation.

 

Jim Poole
Jim Poole Vice President, Business Development, Equinix, Inc.