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ClearSky Data 2015 Prediction: Innovation Continues at All Levels of the Enterprise Infrastructure Stack in 2015


 

Virtualization and Cloud executives share their predictions for 2015.  Read them in this VMblog.com series exclusive.

Contributed article by Lazarus Vekiarides, chief technology officer and co-founder, ClearSky Data

Innovation Continues at All Levels of the Enterprise Infrastructure Stack in 2015

By early 2014, whatever doubts remained about the role of cloud giants Amazon, Microsoft and Google had been dispelled. The big clouds were clearly here to stay, and they were already disrupting the way IT did business. This trend will evolve in 2015 as the market separates into the disruptors and the disrupted. With scrappy new technology companies aligning themselves with the Big Three, and the incumbent IT players trying to maintain relevance, we expect to see the following four trends emerge as the dominant direction of the marketplace in the coming year:  

Enterprise technology vendors learn they have to use the cloud and not be the cloud.

Given the scale of investment required and their head start in the public cloud market, Amazon Web Services (AWS), Microsoft Azure and the Google Cloud will maintain significant leads, primarily fighting with each other. Although traditional IT vendors will continue to market their cloud offerings as counterpoints, the Big Three's repeated price cuts and new feature rollouts will make it difficult for any players with legacy software or hardware businesses to compete without cannibalizing their existing franchises. As with all such battles, the increased emphasis on low price over innovation will limit the appeal of basic cloud services from alternative providers.

We expect to see the next entrants to the market seizing opportunities to create new service models by using public cloud resources as the building blocks for more resilient, enterprise-class IT infrastructure. The rise of cloud as the new commodity substrate for enterprise infrastructure will encourage innovators to layer applications, security and high-value infrastructure platforms on top of the core service offerings of the major cloud providers. These new companies will become the next generation of hyper-growth IT players, and they will be increasingly sought out by acquirers, as well as investors in subsequent years.

Divestiture will be the new black.

With the pervasiveness of cloud as a commodity, the large, legacy IT conglomerates that have dominated the landscape for most of two decades are finding themselves in a state of existential crisis. Burdened with enormously complex portfolios of acquired products, byzantine organizational structures and fundamental internal business conflicts, these traditional IT vendors will continue to underperform in 2015. Given their corpulent balance sheets, it should surprise no one that activist shareholders will pressure nearly all of them to spin off portions of their businesses in the name of shareholder value, making divestiture one of the key trends of 2015. However, perhaps due to a soft global economy, most of these spinoffs will result in losses for shareholders. More interestingly, a slew of these newly divested entities, finally finding some focus, will need to go on merger and acquisition sprees to shore up their technology portfolios, leading to a surge of venture capital returns in the coming years.

Flash will fizzle as a differentiator.

In 2015, the industry will realize that flash is not the disruptive technology it was once considered to be. While the benefits of flash are clear, the technology has become ubiquitous and, therefore, it no longer has the potential to serve as a game changer.

In an echo of the notable high performance computing busts of the ‘80s and ‘90s, in 2015, IT professionals will discover that paying huge premiums simply to make things go faster does not solve their really big problems. Furthermore, no one should be surprised as the increasing density and lower price of SSD devices make them a universal alternative to high-speed rotating media. With the majority of players now offering flash-based storage infrastructure, it will become increasingly difficult to differentiate solely on this feature. Expect to see the pure-play flash vendors either evolve their strategies or seek profitable exits while their businesses are still attractively valued.            

The importance of hybrid Internet will grow in the enterprise space.

Perhaps the biggest sleeper this year will be enterprises' increasingly pervasive use of cheaper, more available dark fiber and lit services such as metro Ethernet to stitch together "hybrid" networks between public and private infrastructure. These arrangements will enable broader enterprise adoption of services from public cloud, service providers and partners. The use of private connectivity to public infrastructure will mean the growth of a new hybrid Internet, which maximizes the privacy, performance and cost-effectiveness of connectivity. Because any-to-any private connectivity is expensive for a solo customer, the trend will be hallmarked by partnerships and multi-tenant services that can be leveraged for private connectivity. Look for the emergence of managed service and colocation providers that will offer innovative connectivity options to enterprises by virtue of their scale and strategic locations near customers.

In all, 2015 will be a great year to not have a legacy IT business. Given the massive shifts underway in the core business model of IT, along with the obsolescence of the last decade's worth of new infrastructure ideas, this is probably the most exciting time to be part of a startup in recent memory.

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About the Author

Lazarus Vekiarides is the chief technology officer and co-founder of ClearSky Data, a stealth mode startup building a breakthrough enterprise infrastructure solution. Previously, Vekiarides was a member of the core leadership team at EqualLogic and an executive at Dell. He is an expert in data storage, virtualization and networking technologies.
Published Wednesday, November 19, 2014 9:01 AM by David Marshall
Comments
@VMblog - (Author's Link) - February 10, 2015 6:59 AM

Once again, how great is it to be a part of the virtualization and cloud industries? 2014 was another banner year, and we witnessed a number of fantastic technologies take shape and skyrocket. And I, along with many industry experts and executives, media

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