2013: Year of the Cloud Consumer

Publisher's Outlook

2013: Year of the Cloud Consumer

By Rich Tehrani, CEO, Group Editor-in-Chief, TMC  |  January 03, 2014

It would seem 2013 marked a cloud milestone in terms of competition, acceptance and consumer value. More importantly, this year, even the skeptics seemed to give in. There are lots of reasons why this is an exemplary year in regards to cloud adoption and competition. Here are many of them.

Carrier equipment companies onboard

Recently TMC (News - Alert) hosted an event in Santa Clara, CA titled Software Telco Congress and it was unanimous among the hardware vendors in the room that they would migrate as much of their hardware solutions to software as possible. We are talking major companies like Cisco, Alcatel-Lucent and GENBAND, and representatives from the carriers such as Orange and others were eager for this transformation to take place.

There are perhaps no more important and sensitive systems than those that get installed in a central office of a carrier. Even the idea of taking bespoke hardware and replacing it with COTS servers would have been unthinkable until recently.

Part of the reason for the move in-part is a new movement called Network Functions Virtualization, or NFV. This, and competition from OTT companies like WhatsApp and Skype (News - Alert), is forcing carriers to look for alternative ways to allow customers to communicate. They have no choice but to leverage cloud-like infrastructure to ensure their costs are in-line with the rest of the players they compete with.

Wearable Tech big data

Wearable technology may just be the next big thing in tech, and the amount of information being thrown off by a myriad of devices from motion monitors to video cameras is massive. This data needs to live somewhere and by definition there isn’t much storage capacity on something you wear. Enter the cloud which will absolutely be filled with live-stream videos of consumers and a ton of other health and fitness data. All of this info needs to be crunched and massaged, and the cloud will play a huge role in this process.

IBM (News - Alert)/Amazon fight

Another big deal in 2013 was the fight between Amazon and IBM over a $600 million CIA contract where IBM had a lower bid, but Amazon technology was deemed to be better by the feds. This led to lawsuits which Amazon eventually won. One thing this public fight did was show how big cloud contracts can be. More importantly, it demonstrated to the world that the CIA which obviously values privacy was comfortable having Amazon build their cloud for them. In response, IBM started an ad campaign designed to show the world they have more cloud cred than Amazon.

Google (News - Alert) Compute Engine

Google too made a big splash in the market recently with its Compute Engine which has per-minute billing as opposed to Amazon’s hourly alternative. With 15 VM sizes to choose from in four categories many customers will be satisfied -- but AWS has even more in reserved instance and spot-market VMs. In addition, Amazon offers a variety of OS options – not just Linux. Moreover, Amazon has as many categories of partners, 22, as Google has partners. Basically Google has a lot of catching up to do, but they obviously have a strong brand name and enough resources and tech knowhow that Amazon should be concerned. This competition from IBM and Google aimed at Amazon is yet another reason why consumers are winning in 2013.

NSA Scandal has had mixed effects

Depending on your perspective, the NSA revelations of surveillance are a big or small deal. A recent survey of CIOs shows they fully expected the government to be monitoring data and telecommunications, and as a result many aren’t being dissuaded from using the cloud at all. Then again many foreign nations are at least publicly raising red flags, and there is talk of increasing nationalization of tech initiatives going forward. There are estimates of billions of dollars which will be lost by US tech companies as a result of Snowden’s leaks, but it is unknown if this will be good for the cloud as new international competitors will emerge more easily, or bad because companies in some countries won’t trust anyone with their data.


Recently Box received $100M in funding at a $2B valuation, while Dropbox (News - Alert) has a valuation perhaps north of $8B. I am loathe to bet the future of any industry based on investor euphoria but still, you have to admit as a whole, there is a lot of momentum in the cloud right now and investors and tech veterans are betting big that the cloud will be the future. Of course the winner in all this is the consumer – the SMB, enterprise or average user.

2014 should be an even better year for all things cloud and we can’t wait to bring the news to you. Thanks for reading and Happy Holidays and New Year!

Edited by Stefania Viscusi
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