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5 cloud computing predictions for 2016

Bernard Golden | Jan. 21, 2016’s Bernard Golden looks into the near future of cloud computing. Here’s what he sees.

No matter how these play out, it’s obvious that the bright future envisioned by these companies when they started their “enterprise-grade” cloud path has not developed as forecast. Bluntly stated, it’s clear that enterprises were just fine with “commodity cloud,” thank you very much. It’s become obvious that there are three major cloud providers – AWS, Microsoft and Google – all of which follow the commodity cloud approach – whitebox, self-designed hardware and a self-developed software control plane. This is the winning formula. Any other provider that attempts to deviate from this approach may achieve some success, but it will be by addressing a narrow market niche; it may look successful, but it will pale in comparison to the numbers the main cloud providers will put up on the board. 

I believe 2016 will deliver the coup de grace to the “enterprise cloud.” Going forward, every cloud provider with ambitions to be a major market presence will have to fight on the territory of the big players, which will pose its own set of challenges. Among them will be: 

  • Recognizing that the commodity providers’ prices are the market expectation and customers will not pay a premium for putatively superior “enterprise” offerings.
  • Understanding that a provider’s cost structure has to support these lower prices, and the corollary that use of commodity gear and a “free” (i.e., non-licensed) control plane are therefore required.
  • Investing the capital required to compete with the large providers. To play in this league requires billions, not millions, even if there are a couple of zeroes in front of the millions. 

In short, 2016 will see even more public cloud offerings shuttered, with additional growth being funneled to the dominant providers. 

2. Hybrid cloud and cloud brokerage have their day in the sun 

The default response for users and vendors giving way to the large public cloud providers is to retreat to what seems to be a more defensible position. 

On the part of enterprises, it is to recognize that large public cloud providers will be the location of external workloads, but that many workloads will remain on-premise. This is labelled hybrid cloud, and is assumed to represent the future of enterprise workload management. 

On the part of legacy vendors, it is to position themselves as cloud brokers – entities that can assist enterprises in selecting appropriate application deployment locations, help design applications so they can operate properly in a given deployment location, provide software products to aid in managing multiple deployment locations (this is an obvious counterpart to the hybrid approach described above), and/or manage cloud-based applications on behalf of the user. 

All of this is true enough – as far as it goes. The biggest problem is that both hybrid cloud and cloud brokerage are vague, ambiguous terms that can be used to describe almost any possible arrangement of application deployment and infrastructure choice. 


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