The Cloud in 2014: From Exotic to the New Normal

Arthur Cole
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It’s holiday time again, so the trade press is awash in predictions for the coming year. And as is our tradition at IT Business Edge, we provide you with a roundup of fortune-telling by some of the leading voices in the industry.

Naturally, our first outlook will focus on the cloud, as that is the dominant trend sweeping the industry at the moment and will likely remain so for the foreseeable future. In general, it seems most of the big research houses think 2014 is the year the cloud transitions from “new technology” to standard operating practice, which is probably a reflection of the fact that a large percentage of the enterprise industry is up and running with some form of cloud infrastructure and is now seeking ways to leverage the technology to the greatest advantage.

Forrester, for one, says SaaS is ready to become the de facto means of purchasing new enterprise applications like CRM, while the public cloud itself will become the new backbone for the burgeoning Internet of Things. At the same time, functions like security and automation will become more centralized even as the IT perimeter becomes more distributed and therefore difficult to ascertain. Fixes for these and other issues will continue apace, but they will reside more in the cloud as opposed to the traditional enterprise model.

For IDC, 2014 will be a boom year for cloud services, Big Data, mobile infrastructure and a host of other functions, pushing total IT spending up 5 percent to $2.1 trillion. Spending on services from Google, Amazon and other “3rd platform technologies” will account for nearly 90 percent of the total IT spending, with much of that coming from newly revitalized emerging markets. In particular, PaaS seems poised for significant growth as it moves from a generic footprint to data-optimized services. As well, expect to see new workload-specialized cloud-infrastructure services that will lead to increased differentiation between cloud providers.

For traditional IT vendors, both the cloud and mobility pose significant challenges within longstanding channel relationships as they alter the role that IT plays in the enterprise, according to Frost & Sullivan. Both Google and Amazon have made enterprise-class services a top priority, putting them in a position to play central roles in IT development and provisioning decisions in the coming year. But that doesn’t mean they are likely to get a free ride: Top telecommunications providers like Telstra are ramping up their service capabilities as they push to bring unified communications across cloud, data center, contact center and internal enterprise infrastructure.

Indeed, every dollar spent on the cloud results in two or three unspent dollars in traditional IT systems, says Barclays. So if cloud spending does top the $10 billion mark in 2014 as firms like IDC and 451 Research predict, top vendors like EMC and IBM, as well as leading integrators like Accenture, could be in for a very rough year. In the end, it comes down to simple economics: If the enterprise is willing to adopt the cloud as a means to lower its IT budget, then someone somewhere has to feel the pinch.

In short, it seems that current predictions for the cloud mirror last years’: More reliance on the cloud, less on traditional infrastructure; greater diversity among service offerings; and increased flexibility in pursuit of scale-out architectures to meet the challenges of Big Data, mobility, social networking and other advancing services.

For the cloud, then, 2014 will be more of the same - much more.

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