Looking at the state of the cloud computing market, we see the coming year as one in which organizations will be thinking more strategically about the cloud. There will still be growth as organizations continue to invest in the advantages of cloud computing, but it’s necessary for everyone to evaluate the lessons learned and make sure that those investments are, in fact, strategic.
This is already happening to a degree and can be seen in two cloud trends reported in the Wall Street Journal. In a study by the tech research firm IDC, reports on cloud infrastructure spending is not only on an upward trend, it is also outpacing that of traditional IT. The second report, based on a CompTIA survey, found that the adoption of enterprise cloud applications was trending down.
This contradiction in trends can be explained as a symptom of where we are in the maturation process of the cloud computing market.
No one questions that cloud adoption comes with a host of clear benefits in terms of cost, accessibility, and flexibility. These have been and will continue to be major drivers for cloud computing. Lingering questions related to security are, in large part, fear, uncertainty, and doubt generated by segments of the industry that find themselves well behind the curve. Of course, it’s normal to have concerns about the security of data in the cloud, but security is an issue that spans all aspects of technology, not just the cloud. We all grapple with enterprise security.
As for the IDC and CompTIA findings, how do you reconcile the increase in adoption of cloud infrastructure and the migration of workloads to the cloud with a slowdown in the adoption of cloud applications?
The answer is that, as organizations examine their experience with the cloud, they recognize that while it is great for some things, the cloud may not be the technical panacea they’d hoped. It may be that existing investments in back-office systems are simply not ready for cloud integration and that day is farther down the road than first thought. New IT projects may well be cloud-centric, but for legacy IT that is already in place and operating satisfactorily, the ROI may not make sense.
That is an opportunity for vendors whose portfolios span cloud and traditional offerings and can leverage goodwill to maintain recurring revenue with the maintenance of existing systems while capturing new revenue with the sale of both hybrid and cloud products that make sense for existing and new customers.
In my experience, the IDC and CompTIA trends make perfect sense as we’ve seen our customers engaged in the migration to the leading cloud infrastructure service providers like Microsoft Azure, Amazon Web Services (AWS), Google Cloud, and others whose Infrastrucutre-as-a-Service (IaaS) offerings represent the pinnacle of cloud ROI. They are taking advantage of the cloud’s cost savings by shifting the responsibility of managing equipment and the capital costs of hardware to the IaaS provider, but maintaining management-level control of their operations and, in particular, their mission critical systems.
In other cases — and especially for companies operating in or expanding into today’s global markets — the cloud can offer advantages associated with the flexibility of being able to establish a local footprint in countries where local control is necessary because of regulation. In such cases, the right cloud strategy can give the organization the ability to focus on compliance in an increasingly regulated business environment without being distracted with the hassles of standing up a new server farm. Consider the changing environment in the EU where the future of the recently adopted EU-US Privacy Shield agreement is already in question, and where the UK’s looming exit from the European Union may have further implications on cross-border data management. For organizations active in Pacific markets, that can also mean responding to changes to the APEC Cross Border Privacy Rules.
It makes sense for any organization to respond to changing circumstances and adjust plans accordingly. You may be three years into a five-year cloud migration plan and, if you haven’t been correcting course along the way, you may find yourself a long way from your destination. Just as cloud consumers must take stock of where they are today in order to adapt strategy, cloud vendors must also recognize how their product development and sales strategies need to change to meet the needs of their customers and of the market as a whole.