The Cloud Market Is Growing, in Complexity

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    Enterprise cloud deployments are on the upswing with little or no sign of slowing down in the coming year, but inside all the market projections are some key trends that indicate exactly what form this new infrastructure will take and what services it will support.

    Across the board, reports are calling for a continuation of last year’s double-digit growth for 2017 and beyond, but it is fair to say that some earlier assumptions about cloud computing have not panned out, at least not yet.

    For one thing, says Forrester’s Dave Bartoletti, big enterprises are turning toward big cloud providers for increased application support, which was expected. But at the same time, regional providers are also still in play due to the highly specialized nature of their service offerings. The global public cloud market will top $146 billion in 2017, led by the quadrumvirate of Amazon, Microsoft, Google and IBM. But since these players offer generalized services, niche players are starting to make gains through more hands-on service and infrastructure offerings, as well as their ability to meet data residency and other compliance mandates. And in a side note, Forrester surveys are starting to detect some frustration with the cost and complexity of converting legacy infrastructure to private clouds, which suggest more of the workload will shift to public infrastructure over the coming year.

    Meanwhile, Technavio is reporting that demand for enterprise cloud services is on pace to top 23.8 percent compound annual growth for the remainder of the decade. This will include the gamut of software, infrastructure and platforms, all of which have been transitioning to as-a-service models for the past decade. As this trend unfolds, many organizations will find themselves outsourcing nearly all of their IT operations to managed service providers, freeing their own personnel to focus on core business activities. This will have the added benefit of increased agility and rapid deployment capabilities to maintain competitiveness in fast-moving business environments.

    But if this is the case, then why are firms like CompTIA reporting steadily declining use of cloud-based applications and services? The movement is particularly acute in business productivity, email and analytics, but it also spans emerging cloud-friendly functions like collaboration, customer relationship management (CRM) and enterprise resource planning (ERP). The answer, says Constellation Research’s Ray Wang, may be in the fact that organizations are becoming more savvy in determining what is and is not a cloud-based app, so the decline is more due to the reclassification of simple hosted solutions or non-cloud services rather than waning interest in cloud operations.

    For a company like Cisco, enterprise cloud computing can only increase from today’s levels. The company’s latest Global Cloud Index maintains that 92 percent of workloads will reside in cloud data centers by 2020, with 68 percent of that going to the public cloud. This will put quite a strain on global IP networks, which will face traffic volume of more than 14 ZB per year – more than triple today’s load. As for the types of services users will demand from the cloud, 74 percent will be on the software-as-a-Service (SaaS) model, while infrastructure (IaaS) and platform (PaaS) will comprise 17 percent and 8 percent of the workload, respectively.

    Without doubt, the cloud is here to stay. But it is also true that the cloud does not represent the same monolithic data infrastructure that has supported the enterprise throughout the digital age. It now incorporates so many architecture, infrastructure and service offerings that trying to gauge it as a single market is like trying to assess a patient’s health by their general appearance and behavior.

    Even as cloud activity continues to expand, there will be missteps and setbacks within its myriad micro-segmentations that should remind data executives that not all that is cloudy is golden.

    Arthur Cole writes about infrastructure for IT Business Edge. Cole has been covering the high-tech media and computing industries for more than 20 years, having served as editor of TV Technology, Video Technology News, Internet News and Multimedia Weekly. His contributions have appeared in Communications Today and Enterprise Networking Planet and as web content for numerous high-tech clients like TwinStrata and Carpathia. Follow Art on Twitter @acole602.

    Arthur Cole
    Arthur Cole
    With more than 20 years of experience in technology journalism, Arthur has written on the rise of everything from the first digital video editing platforms to virtualization, advanced cloud architectures and the Internet of Things. He is a regular contributor to IT Business Edge and Enterprise Networking Planet and provides blog posts and other web content to numerous company web sites in the high-tech and data communications industries.

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