So what’s happening in the cloud these days? A lot, from emerging trends to changes coming over the next two to three years, says Technology Business Research Analyst Kelsey Mason.
Kelsey Mason is an analyst in TBR’s Cloud Practice and leads TBR’s public cloud and hybrid IT research and analysis. She focuses on the business models and strategies of leading cloud and software vendors and the trends influencing these markets.
- What are some of the top cloud trends?
Kelsey: The cloud market is changing on a number of fronts as enterprises’ understanding of cloud and its benefits matures. For one, there is an ongoing shift from unsanctioned to sanctioned adoption of cloud solutions that is altering how cloud is being used within enterprises. The self-service nature of public cloud adoption lends itself to unsanctioned adoption, but enterprises are quickly realizing that adopting cloud this way ultimately does more harm than good as data becomes more siloed. This shift in adoption is fueling creation of hybrid environments, where enterprises are integrating their disparate technology, both on-premises and cloud-based, to create a more cohesive IT environment. From the vendor perspective, this creates opportunities in the management layer as enterprises grapple with how to effectively manage the combination of on-premises and cloud solutions.
The other big trend, which is also influenced by market maturity, is the proliferation of data and data’s role in helping enterprises achieve strategic goals. Enterprises are increasingly looking at cloud as a way to create competitive advantages, and evolving use of data will drive these goals as vendors create their own data economies. This is why Microsoft’s acquisition of LinkedIn and the speculation that Salesforce may buy Twitter make perfect sense. To this end, artificial intelligence will become an aspect of most cloud vendors’ portfolios, as many enterprises leverage the integrated data inherent in their hybrid IT environments, combined with third-party data sources, to create unique customer insights.
- How will the cloud vendor landscape change over the next 2 to 3 years?
Kelsey: The cloud market will continue to consolidate over the next two to three years, particularly in public cloud and cloud professional services. The public cloud IaaS market has seen its share of consolidation already, most notably with Hewlett Packard Enterprise (HPE) and Dell exiting the space and Rackspace and CenturyLink focusing their investments on private cloud and managed services. This primarily leaves Amazon Web Services (AWS), Microsoft, IBM and Google to dominate the space and capture ancillary opportunities by hosting other vendors’ SaaS and on-premises software. With regard to the SaaS space, we will continue to see vendors such as HPE that specialize in closer-to-the-box offerings de-emphasize applications, while lagging vendors such as IBM, Oracle and SAP land-grab to fill gaps, most notably demonstrated by Oracle’s pending acquisition of NetSuite. As the cloud vendor landscape consolidates and customers strategically create hybrid environments, partnerships between leading cloud vendors will become critical, blurring the lines between partner and competitor.
In the cloud professional services space, global consulting and systems integration (C&SI) vendors will continue acquiring vendor-specialized services firms, most recently demonstrated by Accenture’s acquisitions of Salesforce-focused New Energy Group and Workday specialist DayNine Consulting. This consolidation bodes well for the pure plays with global expansion ambitions, and quickly provides large services vendors with the niche expertise needed to address evolving customer demands.