UPDATED 14:27 EDT / DECEMBER 30 2018


The 2019 forecast for cloud computing: Up the value chain they go

The year just concluded may end up being remembered as the one in which the final barriers to widespread cloud adoption fell.

Finally convinced that concerns about security and stability were more perception than reality, chief information officers flocked to cloud platforms with the rapid adoption of software containers paving the way. Containers make it simple to run software on any computing environment, and some experts predict adoption rates in the enterprise will reach 90 percent by next year.

So what’s next? Whenever the industry agrees upon a platform, the action invariably moves upscale, and that’s what will happen in 2019. The biggest cloud providers will consolidate their positions and begin to encroach upon software-as-a-service companies, some of which are among their largest customers. But that’s business as usual in an environment of growing codependency.

Here are trends that will likely dominate the news in the coming year:

The big get bigger

The first stage of the commercial cloud revolution has ended, and the winners have been declared. Time to close the betting windows. Amazon Web Services Inc. and Microsoft Corp. will become bigger and stronger, while Google LLC continues its late push for enterprise credibility.

Other pretenders will be forced into niches. However, managed service providers and colocation providers will continue to flourish on the back of specialized and regional services. This doesn’t mean cloud growth flattens. In fact, it should accelerate as enterprises become more emboldened to move the 80 percent of workloads that are still on-premises to cloud infrastructure.

How others see it

  • “To blunt AWS’ momentum in the hybrid cloud before Outposts’ release, AWS public cloud competitors will enhance and promote their existing hybrid-cloud on-premises compute/storage racks. However, it remains doubtful whether Microsoft Azure Stack, IBM Cloud Private, Oracle Cloud At Customer, and the like will offer those vendors any advantages in their strategic push to migrate existing enterprise customers to their respective public clouds.” — James Kobielus, lead analyst, Wikibon (a SiliconANGLE sister company), writing in InfoWorld.
  • Gartner predicts that by 2025, 80 percent of organizations will migrate entirely away from on-premises data centers, with the current trend of moving workloads to colocation, hosting and the cloud leading them to shut down their traditional data centers. “Leaders must identify whether there are truly strategic reasons to persist with on-premises needs, especially when they consider the significant amount of investment involved is often amortized over many years,” said Ross Winser, senior research director at Gartner Inc. — InformationAge

Cloud makers push deeper into software as a service

Server instances are now a commodity, so cloud providers will focus their expansion efforts on value-added business services. Expect the lines between infrastructure-as-a-service and software-as-a-service to blur further as platform providers move up the stack.

As a result, don’t be surprised to see a lot of merger and acquisition activity in the process. Infrastructure-as-a-service companies can leverage their strong customer relationships to turn small SaaS vendors into profitable lines of business. More of the competitive action will also turn to platform as a service because of its potential to lock customers into specific IaaS and SaaS providers.

  • “One area that’s ripe for Amazon expansion is hospitality. They’ve just started dipping their toes into local services like house cleaning and handymen. I see great potential value for Amazon to venture into travel and restaurants.” — Amit Sharma, founder and chief executive of Narvar Inc., a customer-engagement platform, quoted by Inc.

The year of the multicloud

Last year I predicted that customers’ move to multiple clouds would be opposed by the entrenched cloud vendors, which had no interest in making it easy for customers to switch. What a difference a year makes.

The startling success of the Kubernetes container orchestration layer has quickly leveled the playing field between public and private clouds, making multicloud a no-brainer option. Customers won’t need to sweat the choice of providers for basic server instances or choose between public and private cloud for new workloads. This will give them unprecedented pricing leverage and hasten the move of cloud providers into functional and vertical markets.

How others see it

  • “Public cloud providers will put the highest priority on offering migration tools, multicloud backplanes, professional services to help enterprise execute these migrations rapidly, cost-effectively, and with manageable risk.” — James Kobielus, Wikibon, writing in InfoWorld.
  • “We’ll see more clouds pop up as data becomes increasingly distributed – at the edge in autonomous car environments or in smart factories, in cloud-native apps, in protected on-prem centers to meet a host of new compliance and privacy standards.” — Jeff Clarke, vice chairman of products and operations, Dell Technologies Inc.
  • “Technology providers will increasingly offer native support for multiple cloud providers and other powerful cloud tools that equip enterprises with a single interface for managing applications, workloads and data across both on-premises and cloud environments.” — Don Foster, senior director of worldwide solutions marketing, Commvault Systems Inc.
  • Although single-cloud designs can benefit enterprises, they’ve become the second-leading cause of application downtime, much like single data center deployments were in the past. Those moving their data-driven apps to the cloud will need to architect them in a way so they are hybrid and multi-cloud in design.” — Robin Schumacher, chief product officer at DataStax Inc., quoted by Inc.

Cloud-induced open-source licensing debate intensifies

The move by cloud providers to take advantage of favorable licensing terms to build proprietary extensions on top of open-source code has sparked a lot of soul-searching in the open-source community. The question is whether open-source licensing will further fragment or the factions will unite around current or revised rules. One thing’s for sure: We haven’t heard the final word on this issue, and open-source licensing is likely to be a major topic of debate in the new year.

How others see it

  • “There are signs that big [cloud] vendors are taking a nuanced approach — in some cases working to co-opt open source to the ecosystem’s detriment while in other cases supporting vibrant open source ecosystems…. This trend will accelerate in 2019 and beyond, and the extent to which these companies act as ‘good citizens’ within open source will bear watching.” — Karthik Ramasamy, co-creator of the Apache Heron distributed stream processing engine and co-founder of Streamlio Inc.
Photo: Unsplash

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