2011 Cloud Predictions

Happy new year to fellow Cloud technologists, vendors, capitalists and enthusiasts!  There are almost too many Cloud year-in-review and Predictions to keep track of, and I apologize for adding yet another to the list, but these three predictions were inspired by a variety of sources, including smart work colleagues, respected industry voices and random online sources.  I've tried to give credit where it's due.  I look forward to sharing another very exciting year in the cloud community with you.

1.   Cloud becomes the default IT platform – We’re seeing growth estimates of 20-30% for public cloud offerings, and anywhere from 10-15% of IT spending being redirected to the cloud, so it should be a safe bet that Cloud will continue to grow in 2011.  But 2011may be the tipping point where for most companies, IT Project leaders will have to start considering a cloud option for every new project, and perhaps will be required to present the more demanding business case for On-Premise deployment versus the default of using Amazon, Azure or a SaaS provider.

2.   Hybrid cloud becomes the key battlefield – For now, most investment has been clearly either internal ‘private’ cloud or external SaaS, PaaS or IaaS, and never the twain shall meet.  IT teams in 2011 will have an epiphany that it all needs to connect together, whether because of performance, compliance or manageability.  Expect to see wide adoption of heterogeneous cloud management tools, continued investment and growth in the WAN optimization and cloud gateway space, as well as the convergence of SAN/LAN/WAN capabilities within underlying networking gear.

3.   Cloud M&A Peaks – Fueled by a low growth environment and cheap capital, we can expect to see a number of acquisitions across the IT landscape, including mega deals like Oracle buying Salesforce.com and/or CSC, IBM buying NetApp, HP buying SAP.  And specific Cloud-related deals will also rise, with vendors filling networking and capabilities gaps, such as Cisco buying Riverbed, Dell buying Brocade, and Cloud management tools like Rightscale, Abiquo and Joyent being snapped up and folded into the IT management suites of IBM and HP.

Special thanks to: Brook Reams http://brook.reams.me/, Datapipe http://www.datapipe.com/, IDC www.idc.com, Channel Buzz Canada http://www.channelbuzz.ca

Cloud on the Top of the Hype Curve

I know there's a lot of talk out there about the Cloud and how hyped it is.  It's true.  If you look at Gartner's latest Hype cycle on Emerging technologies, you can see where they place it: literally at the top of the cycle. 

But that's OK - A lot of hype means a lot of awareness. As a vendor this adds wind in our sails and as a customer it makes it easy to find the content that will help make informed decisions.  In fact, last I checked, the term 'Cloud Computing' was yielding over 34 million hits on Google.  Sounds like lots of information for folks who want to learn more.

Another popular topic about Cloud is how long will it take to become a significant movement.  Well, if you believe the leading, trusted analysts in the space like Frank Gens from IDC (I know I do), he already puts the Cloud market -- and let's be specific -- this is the market for External Cloud services (not 'private cloud' spending) at $15.6 billion as of 2009.  That's a big Total Addressable Market.  Far bigger than many segments of IT as we know it today.   And the growth rate is expected to be 27% annually between now and 2014, with some areas such as Cloud Storage racing ahead at a 37% compound annual growth rate. 

Let's look at just Cloud Storage.  According to those same IDC numbers, it's already 9% of the market, and at the current growth rate, that would make it about $1.8bil this year.  That's almost as large as the entire SAN storage networking market, and growing far faster.  Projecting forward, by 2014 Cloud Storage spending will exceed $7 bil.  And by that time external Cloud spending will account for 10% of the IT budget. 

So some are saying Cloud is over-hyped.  Some, that it's under-hyped.  I'd say it's about right for where it is in its maturity.  The perception for some is that Cloud is just for deep file archiving, Test/Dev and limited web-based development.  In reality, early adoptors are already running 60-70% of their business apps in the cloud.  We're seeing the Government laying the groundwork for serious investments in Cloud-based services through programs such as FedRAMP.  And enterprises are swarming shows like VMworld to understand the art-of-the possible, and continue to build upon their internal 'cloud' efforts to be able to extend them towards carrier and service provider clouds.

So long as Cloud vendors continue to deliver capex and opex savings, improved efficiencies, decent quality and security, and fast time-to-solution, then the growth will continue, with or without the hype.