We spend a lot of time thinking about where this industry is going – there’s so much hype, so many new entrants, and the term has become so generic it’s hard to pin down what’s relevant and what’s just PR. Based on our experience, what we’ve learned from talking to customers, and being keen industry observers, we’ve put together the trends we think will influence Cloud Computing in 2011.
(For a primer, you might want to read our previous post – State of the Cloud 2010)
- Adoption: Cloud Computing is mainstream now and there are many solutions and plenty of providers to implement them. While developers have been the early-adopters, in 2011 IT Managers and IT Services Providers will move to utilising Cloud Computing within their service catalogue. 2011 will be the year businesses begin to adopt Cloud Computing in a serious way.
- EcoSystem: The ecosystem of applications on top of base-level infrastructure and platform providers will emerge as a force controlling a lot of Cloud deployments. This year saw the ecosystem begin to solidify, with a couple of acquisitions, but a lot of startup funding. This paves the way for 2011 to be a big year for ‘value added providers’ in the Cloud. We expect a lot of innovation and a few more ‘Heroku’ like big wins. (Heroku was acquired by Salesforce for over $200m).
- Public/Private & Hybrid Cloud: Public Cloud Computing (IaaS – providers like Amazon) has dominated the spectrum so far, and industry professionals spent much of the first half of 2010 arguing over the technical definition of ‘Private Cloud’. To us, a Private Cloud is an infrastructure which is controlled BY or FOR the users’ organisation and meets the core tenets of Cloud Computing – which are: self-provisioning, elasticity (bi-directional) and utility-based billing or metering. Virtualising an internal IT infrastructure is a step in the right direction, but it is not a Private Cloud. A large percentage of companies have already implemented virtualisation, and we will see this progress to Private and Hybrid Cloud Computing in 2011 as these IT managers seek better measure and manage their IT resources, and to take advantage of the Public Cloud for portions of their workload. Hybrid Cloud Providers will emerge in 2011 and this will be a hype space for a while as use-cases need to be demonstrated.
- Infrastructure as a Service Providers: Amazon currently lead the charge and will continue to dominate in 2011, although we expect to see strong challenges, from both existing entrants like Microsoft and potentially other large IT companies not yet active in the space – IBM/SunGard/EMC/Cisco. It makes sense for the large infrastructure suppliers to enter this space eventually – despite the fight they have put up against it thus far – as customer demand is strong. Lots of local Cloud providers started to emerge towards the end of 2010 and this trend will continue, although it is hard to see how they can effectively compete at the commoditised layer of Cloud Infrastructure with the big players.
- Hosting Companies: As traditional IT Companies start to move into Cloud Computing, so too Hosting Providers will move to offer more traditional IT services such as applications, communication and collaboration, and managed services. The hosting industry is changing – with platforms like WordPress and Salesforce small businesses no longer need basic web or application hosting; and on the other side large businesses like Amazon and Microsoft are competing for the ‘bread and butter’ business. Hosting Providers will start to re-brand their existing services as ‘Cloud Services’ to try and stay relevant.
- Data Centres: The growth in the need for Data Centre space will not diminish with the growth in Cloud Computing. Quite the contrary – Cloud Infrastructure needs to be located in Data Centres – the change may be the smaller customers go with an IT provider (that resells Public Cloud space, or provides their own Private or Managed Cloud Services) so Data Centres see a reduction in customer numbers and a shift of power to the IT provider. Some Data Centre enterprises may acquire into the Managed Service space and become a ‘New Age Systems Integrator’ and compete with traditional MSPs and IT Service Providers.
- Managed Cloud Providers: We see a new type of business emerging in 2011, that sits between Public and Private Cloud providers. A so-called ‘Managed Cloud Provider’ is one which delivers IT Infrastructure, from first customer meeting through to deployment, SLA implementation and technical support, on a mix of dedicated Private Cloud (on-site or co-located), Local Managed Cloud (infrastructure deployed and managed by the service provider for multiple clients) and Public Cloud resources. The industry will likely debate this heavily as the definition of Private and Public Cloud is barely agreed, but what matters is customer acceptance, and these IT companies that transform into Managed Cloud Providers already own a vast amount of the available customer base, and so they will win business regardless of industry experts acceptance of their offerings and marketing collateral.
- Cloud Software: Already this area can be segmented into Cloud Enablers, Cloud Platforms and Cloud Management. Cloud Enablers are those companies whose application enables an organisation to offer it’s own Cloud Services. Enomaly, OnApp, Flexiant, Eucalyptus, Cloud.com, OpenStack, are just a few, and VMWare is entering the space with vCloud, which will test the mettle of the smaller independent software businesses. Cloud Platforms make up a lot of the EcoSystem mentioned above – companies such as Heroku and EngineYard, and we will see more in 2011. Finally, Cloud Management providers, like ourselves in Digital Mines, are businesses that build on top of commodity Cloud providers and virtualisation applications, and provide value-added services, such as monitoring, support, and managed services to enable Cloud Computing in organisations.
Disclaimer: This blog post is an opinion piece only and by no means exhaustive. We welcome discussion on any of the topics above, these opinions were formed based on our experiences in the industry, and we are more than happy to discuss them.