What Did Mary Meeker Find on Her Trip to Cloud?

Annual Meeker report sees rising cloud spend, expectations and security concerns

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The annual release of the internet trends report by Mary Meeker is like Christmas morning in the tech world, only with more gadgets (Meeker says 2.8 billion smartphones are now in use globally). And as the digital economy expands, the report has expanded with it, hitting a record 355 slides this year. We’d like to focus on 15 of them, which together make up the first-ever section in the Meeker report devoted exclusively to cloud. Here’s what we found most interesting:

Cloud growth numbers aren’t near their ceiling

c1It’s old news that cloud spend is booming as cloud adoption grows. But the Meeker report shows just how much running room there is for additional cloud growth. The stats indicate IT infrastructure spend on cloud has risen an impressive 14 percentage points between 2013 and 2016 (23% to 37%). But that still leaves 63% being used on the “traditional data center.” That’s big space for more cloud-spend expansion, especially considering the enterprise is moving away from the traditional data center model of on-premises IT.

That traditional model sees data being shuttled back-and-forth between users and a distant, centralized corporate data center. Distance adds latency, and latency lowers application performance and user satisfaction. The enterprise needs to get closer to its users, and cloud is critical to doing that. In fact, in a slide on cloud evolution the Meeker report references “edge computing,” which it describes as “pushing compute away from centralized nodes and closer to sources of data” with cloud as a key component.

We’ve been talking for some time at Equinix about the need for companies to deploy IT at the digital edge, where commerce, population centers and digital ecosystems meet. An Interconnection Oriented Architecture™ (IOA™) strategy is designed to help companies thrive at the digital edge, and it’s worth checking out the details in the IOA Playbook.

c2Enterprise expectations and accountability growing

Meeker notes that users today expect IT apps to be as well-designed and easy to use as any consumer app. One chart lays out just how complete the evolution from an on-premises-based software model to a cloud model has been in the span of 17 years. Note the changes in areas that relate most directly to user experience (UX): In 2000, product intelligence was “constrained.” Now, artificial intelligence (AI) and machine learning (ML) make it “unlimited.” UX was “generic” in 2000. Today, it must be personalized for users to feel that it is viable. And even measuring customer engagement and satisfaction was extremely difficult, if not impossible in 2000. That’s far from the case now, with metrics like daily and monthly active users (DAUs and MAUs) and the customer loyalty measure NPS (net promoter score) increasing insight into customer satisfaction as enterprise accountability improves.

c3Enterprise-ready security lagging

The Meeker report’s equation on security is straightforward: More cloud applications equal more vulnerabilities. And there are a lot more cloud apps running on enterprise IT these days.

Clouds are becoming more specialized, as the increasing integration of APIs and containers into enterprise IT architectures is paving the way for more software to be delivered as-a-service. So the variety and choice of cloud apps available to the enterprise grows. A company web page today, for example, may call on numerous different cloud sources to deliver data and functionality – far more than it ever has before. And every one of those sources must be secure, to protect the enterprise.

The Meeker report has a sobering chart that shows both the heavy use of cloud apps by vertical, along with the percentages of those apps that are not “enterprise-ready,” or sufficiently robust to meet security and compliance requirements. The chart indicates that an astonishing 94% of all cloud apps are not enterprise-ready, which should be a wake-up call for the enterprise everywhere.

Enterprise worries about how to increase cloud adoption while maintaining superior user satisfaction and security can be addressed by embracing direct interconnection using an Interconnection Oriented Architecture™ (IOA™) strategy. Private, 1-to-1 interconnection that’s as close to users as possible not only has the advantage of lower latency for a better user experience – it’s also the most secure kind of connectivity there is. Read our Interconnection Strategy Guide for details on how to implement an IOA to deploy your cloud infrastructure.

 

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