New Cloud Formations in 2015

Cloud Predictions

New Cloud Formations in 2015

By TMCnet Special Guest
Mark Cunningham, President and Founder, D&B Cloud Innovation Center
  |  April 27, 2015

2014 was a year of significant maturation for cloud computing. We now have a complex and established cloud ecosystem, which means the way we use it, implement it and, even the way we talk about it, is changing rapidly. As we settle into 2015, the conversation around cloud is becoming increasingly subtle and the use cases more sophisticated. As cloud computing allows us to continue pushing boundaries in business, we’re enjoying greater agility, innovation and, in some cases, witnessing the disruption of entire industries by the adoption and application of cloud technology. This is happening even in the most traditional, non-technology spaces.

So, with this in mind, my overarching forecast for cloud computing is that 2015 will be a year of cloud-driven innovation. From service providers to software vendors to end-users, innovation will thrive.

Adoption Will Explode

Cloud computing is quickly becoming an essential part of business for many industries, and one that few companies can afford to ignore. In five years’ time, I don’t expect we’ll be talking about whether certain services are cloud-based or not; they just will be. The idea that cloud is only for startups and tech companies is already long gone. Even traditional laggards are setting their sights on cloud and it’s these companies that I expect will be making the largest strides towards cloud adoption and integration this year, as they look to keep skin in the game. In fact, Computerworld’s 2015 Forecast Study predicts that the greatest growth in cloud computing spend this year will come from enterprises with over 1,000 employees.

Expect the Unexpected

As more businesses come to recognize the opportunities that cloud offers, the more it will be leveraged in order to aggressively compete and, in some cases, to revolutionize whole industries. There have been many examples of this kind of disruption over the past five years. Just look at Netflix, a company that used cloud technology to turn the entire video industry on its head. Expect to see many more examples of cloud-enabled industry disruption over the coming 12 months.

Price Wars Will Change the Ecosystem

As competition within the cloud industry increases, providers are essentially locked in a spiraling price war, which will force them to start innovating in order to differentiate, rather than competing on price alone.

One of the ways I expect this will manifest is in a race for global coverage. As enterprises grapple with data sovereignty issues and the major cloud providers scramble to address them, we’re going to see new data centers popping up everywhere, a recent example being the opening of an AWS region in Germany late last year, a country with very strict data protection laws. In addition, I expect to see the major providers continue to add value to their services by building out and innovating in their apps environments.

In the meantime, as prices plummet, cost savings from the providers get passed down the chain to the software vendors who, in turn, pass savings onto their own customers. This will ultimately make cloud solutions more compelling for the end-user and less expensive for new SaaS (News - Alert) players to get up and running. This, plus cuts in upfront costs from the major cloud providers, will lead to greater competition and innovation in the SaaS market as well.

The downside? Only the biggest companies can afford to take part in this price war, which could deter new players from throwing their hats in the ring and eventually stifle competition and innovation within the market.

Speed of Software Innovation will Increase

We have now propelled past the experimental phase with cloud computing and onto established software development practices. This is driving an unprecedented pace of software innovation. We’re to a point where we can set up a new cloud environment in minutes. We can scale up or down with a few mouse clicks. We can iterate frequently and deliver new solutions quickly. This means that we can anticipate changing market conditions better and our customer feedback loop is much shorter, allowing those companies that truly listen to their customers and embrace business agility, to pull ahead in 2015.

More Data-Driven Insight

Becoming a data-driven enterprise will be essential in order to compete in the years to come, regardless of industry. Cloud computing has given us the capacity to manage and process huge amounts of data, as well as a new generation of cloud-based analytics tools to help make sense of it all. The ability to analyze, spot trends, and predict what lies ahead is key to knowing where to apply innovation efforts in the first place. Data drives innovation. As organizations become increasingly confident with storing data in the cloud, their ability to innovate will also increase.

Edited by Dominick Sorrentino
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