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Cloud Computing Hits (mostly) Unexpected Cycles in 2015

 

May 1, 2015

The cloud computing march will hit some interesting hiccups in 2015. There will be innovation and growth.Complementary technologies like big data and social media will drive more to the public cloud. And, new business models based on ramping up digitial services on the cloud will emerge. However, legacy enterprise software vendors are in for a tough ride as customer concern about lock-in, integration and usability hits critical mass.

Yet, core information assets will remain on-premises and many organizations will adopt hybrid approaches: non-core assets on the public cloud, family jewels where they belong. That means that IT (information technology) isn`t dead. Yet.

Which leads me to the illusion of cloud computing: private cloud is not cloud. It could be shared services. Or, virtualization. Or, better use of information resources. But, it ain’t cloud. It does not give the elasticity, the temporary scaling, the testing capabilities of true cloud. Cloudwashing will continue in 2015 but more people will see through the illusion.

My predictions:

  1. News of the death of IT because of cloud computing is greatly exaggerated. The realization that “private cloud” does not provide “public cloud” advantages will cause some intermediate industry changes. Hybrid cloud will increase with core assets on premises and non-core on public cloud.
  2. Complementary technologies like big data will create cloud demand – public, private and hybrid. Cost saving for traditional application types will be less of a driver than quick accessibility to new and improved technology categories.
  3. The next cloud loser, after traditional enterprise software, is outsourcing. Cloud services enable experimentation, less-expensive automation and lower IT burdens. This will take the bottom “low hanging fruit” from outsourcing but not higher value services.
  4. Cloud growth will continue, but expect a backlash against the over-promise. As Ray Wang told me, there is a growing concern about public cloud security, availability and vendor lock-in. And, there is also the concern that “engineered systems” for “private cloud” are yet another way for vendor lock-in. The cloud enthusiasm will be curbed.
  5. The SaaS market will remain unkind for established enterprise software vendors. Cloud changes the calculus for application decisions from complexity to simplicity. From customization to configuration. From features to usability. From horizontal to vertical capabilities. Major vendors will not be able to acquire and integrate cloud providers fast enough.

 

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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