10 Factors Now Having a Major Impact on Cloud IT

by Chris Preimesberger

IoT, the promise of adding greater value to our electronic devices by giving device owners the ability to control and monitor them over the Internet, requires that devices are networked and can communicate with each other. But only by combining this capability with distributed cloud centers can we make massively scaled sensor, analysis and response networks feasible. The Internet of things will not work unless all the devices and data can be connected, compiled and analyzed. Look for the next generation grid to lead the way.

Now that the cloud is maturing and is viewed and consumed as more of a commodity by enterprises, these same enterprises are becoming savvier about the cloud services to which they subscribe. This year, we will see organizations choosing cloud services based not only on price, but on service levels and quality and depth of customer support.

Increased focus on the “right tool for the job” will drive multi-cloud adoption. More users are beginning to manage their workloads as a portfolio—assigning certain apps to certain clouds based on SLAs, price and security/compliance requirements set by the end user.

After users get Web applications up and running, they will start to look at migrating existing legacy applications into their private clouds. This forces a real change in how organizations build, manage and protect these core IT services. As a result of that shift, the spotlight is going to move away from infrastructure players and how they enable a cloud. Instead, it will be on a host of new startups that are focusing on solving the difficult problems of managing these legacy apps in a cloud environment.

Just as the cloud has continued to evolve and grow, so will the cloud delivery model. As businesses become increasingly comfortable with the use of cloud services, they are also becoming more aware of the differences between services and service providers, causing them to be more selective about the cloud solutions to which they subscribe. As a result, we expect to see the creation of new cloud marketplaces that will become an integral part of this evolution, helping buyers and sellers transact for multiple cloud services from a single location.

Stiffening competition in the cloud provider market will continue to lead to more competitively priced cloud services. Cloud monolith Amazon has cut prices 44 times over the last six years, causing competitors, including Microsoft and Google, to keep up with the “race to zero,” leaving providers to look to other ways to compete.

The farther your data is geographically located from the cloud data center hosting it, the greater the possibility of performance issues and latency problems. Now that there are more service providers from which to choose, and with pricing due to level out, enterprises will be more concerned with the location of their cloud providers’ data centers. They will select cloud providers that have data centers local to the regions where their data stores reside. People are starting to realize that location still matters, especially for security/data regulation and performance/latency issues. As a result, we will see cloud service providers start focusing less on massive centralized data centers and more on smaller, distributed infrastructures. This will allow organizations the ability to place workloads closer to users of the application.

Look for cloud providers to join together to combine infrastructures and coverage areas so as to better serve their customers and improve the utilization of their resources.

Small, independent clouds will go away. Replacing them will be wholesale cloud services. We will see an increase in wholesale cloud services this year, which will drive up the number of providers and drive down pricing for cloud services. This will enable smaller managed service providers that have put time and effort into developing strong relationships with their customer bases to continue to focus on those relationships rather than necessitate a shift in focus to building and maintaining their own clouds.

There are tens of thousands of ISVs in business, most with a vertically-oriented application. Many of the newer entrants built their business in the cloud at the start, and customers embraced the model. Some of the large, established ISVs followed suit, but many have still not made the switch. In 2015, expect to see the laggards finally “SaaSify” their products.