Virtualization Technology News and Information
Cloudyn 2017 Predictions: After a Decade of Cloud Evolution, Will 2017 Bring a New Era of Mass Enterprise Adoption?

VMblog Predictions 2017

Virtualization and Cloud executives share their predictions for 2017.  Read them in this 9th annual series exclusive.

Contributed by Dr. Boris Goldberg, Co-Founder and CTO, Cloudyn

After a Decade of Cloud Evolution, Will 2017 Bring a New Era of Mass Enterprise Adoption?

Back in 2006, when Amazon released the first ever public cloud platform, few could've predicted the impact cloud computing would have on the IT industry. Ten years on and Amazon Web Services (AWS) is still the market leader and remains the benchmark IaaS platform.

Much has changed over that time. The market has rapidly expanded and new players have entered -- and abruptly left -- the cloud arena. Yet three of the leading players, AWS, Microsoft Azure and Google Cloud Platform (GCP), stand head and shoulders above the competition.

Here's a look back at how the cloud landscape has changed over the last 10 years and how new technologies and business challenges will shape the future of the industry in 2017 and beyond.

The March to an Enterprise-Grade Cloud

In the early days of the cloud, vendors, such as Amazon and Google, focused their efforts on attracting start-ups and young, agile companies that were ripe for the cloud. This made sense, as their platforms offered these companies a quick and easy and alternative way to conventional, on-prem IT-as well as the ability to scale their operations without a lengthy procurement process.

But now enterprises are waking up to the benefits of on-demand, pay-as-you-go infrastructure and following in the footsteps of the early adopters.

And because big customers mean big business, cloud vendors are clamoring to build new enterprise-grade solutions aimed squarely at public sector and corporate customers. We expect this trend to continue through 2017 with increased adoption by mainstream "establishment" companies.

Public Sector Shake Up

In 2011 the Obama administration launched Cloud First, a federal initiative aimed at cutting waste in the public sector by promoting adoption of shared infrastructure and IT systems. Since then, cloud vendors have gradually maneuvered themselves into a position to take advantage of these new business opportunities.

They've launched new regions, such as Amazon's GovCloud and Microsoft's US Gov, based in data centers exclusively serving federal clients and offering enhanced security and compliance. What's more, in June this year, the Federal Risk and Authorization Management Program (FedRAMP) certified both AWS and Azure to the highest level of compliance, allowing them to host highly sensitive federal information, such as patient records, financial details and law-enforcement data. This came as a significant boost to both vendors-who, over the last couple of years, have been ramping up their efforts to attract more clients in the public sector.

With a new government coming in early this year, we expect calculated risk-taking to drive accelerated public-sector adoption.

Hybrid and Multi-Cloud Strategies

Another stumbling block to enterprise cloud adoption had been the sheer scale of the challenge large companies faced by going all out in the cloud. Migrating and modernizing tightly integrated, mission-critical legacy applications en masse simply wasn't an option. However, thanks to its close relationship with enterprise customers, Microsoft became one of the first cloud vendors to recognize the issue.

So, whereas main competitor AWS argued that the future was the cloud, Microsoft advocated and supported a hybrid approach to IT infrastructure. As a result, it developed a new hybrid cloud platform, Azure Stack, which bridges the gap between on-premise infrastructure and the vendor's cloud by giving customers a way to deliver Azure services from their own data center.

What's more, Microsoft also struck a deal to host VMware workloads on Azure. This was a significant development for enterprise IT, as it meant companies reliant on VMware technology were no longer tethered to their on-premise infrastructure and finally had a route into the public cloud.

By contrast, Amazon was enjoying significant success with value-added services, such as ECS, Lambda and Redshift. These were not only enticing customers to the vendor, but also locking them in by making them reliant on proprietary technologies.

However, while many of Amazon's products made it easier to migrate to the service, vendor lock-in and an all-in approach to the cloud presented significant barriers to enterprise adoption. Customers wanted the best of both worlds-on-premise data centers for predictable workloads and adaptable cloud infrastructure for other fluctuating IT requirements. But finally this year AWS responded by shifting its focus towards the hybrid cloud and forging a deal of its own to support VMware workloads.

In 2017, we can expect more vendor attention (and announcements) on hybrid architectures and solutions. How this will truly help enterprises with public and private clouds remains to be seen.

Continued Convergence

As the industry continues to mature, cloud vendors are inevitably becoming more like one another. Customers are demanding more portability and interoperability between clouds to support their hybrid and multi-cloud environments. This is bringing vendors closer together towards a common objective. But this convergence isn't just happening at product level, but also in the way cloud vendors are doing business.

Traditionally, Amazon and Google have had a very hands-off relationship with customers, focusing on a self-service delivery model. By contrast, through its long association with enterprise IT, Microsoft has taken a very different approach. It works very closely with customers, driving far more of its business through sales representatives and its Enterprise Agreement (EA).

But AWS is now wising up to the corporate way of doing things and forming closer ties to large-scale enterprises. This change of direction was perfectly illustrated earlier this year when the company partnered with global communications technology provider Ericsson to deliver cloud-based solutions, such as IoT and big data analytics to telecom operators. The vendor is also cultivating a more personal approach with the launch of AWS Managed Services. The new infrastructure management service, which became available at the end of 2016, is designed to help large-scale enterprises and AWS partners accelerate cloud adoption and deliver operational excellence through ITIL best practices, automation and tooling.

2017 will bring heightened competition in existing as well as new areas, as vendors move to stress their competitive advantages while trying to reduce any perceived competitive weaknesses.


According to a recent study into growth in the cloud computing industry the leading four cloud providers, Amazon, Microsoft, IBM and Google, are pulling away from the competition. They now control more than half of the market, with Google growing at the fastest rate-at 162% year on year. By contrast, the next 20 largest providers are seeing much more modest growth, with an average rate of 41%.

This consolidation is forcing the hand of the chasing pack. For example, Cisco has already thrown in the towel by withdrawing its cloud infrastructure offering after only three years. In 2017, we expect to see other vendors bowing out of the cloud business or rethinking their business models to focus more on niche services to stay relevant in the marketplace.

A New Cloud Era of Industry Collaboration

2016 was the year when cloud vendors started to play nice with one another. VMware's decision to partner with the leading cloud vendors is not the only example that highlights the new cloud era of industry collaboration. Rackspace is another company that's adapted its proposition to the rapidly changing cloud landscape. It has gradually transformed from a rival cloud provider into a managed service provider (MSP). And instead of competing with the leading players it's now collaborating with them.

The move is now showing signs of paying off. In 2014, it forged a strategic alliance with Google to provide management, technical and operational support services designed to help GCP customers get the most out of the platform. This was quickly followed by similar deals with Amazon and Microsoft in 2015.

In a bid to keep a foothold in the market, many more rival vendors are likely to follow suit­ in the coming year-by adding value to the big four cloud offerings rather than trying to compete with them.

Increasing Complexity Leads to Growing Demand for Cloud Cost Optimization Solutions

After 10 years of innovation and evolution, the stage looks set for an era of mass enterprise cloud adoption. This will create new challenges for cloud management, such as performance, cost and security, brought on by the complexity of large-scale hybrid and multi-cloud enterprise environments and the vast array of services on offer.

Not only that, but big business will also mean big cloud bills. And that will only strengthen the demand for cloud cost optimization solutions that will help enterprises keep on top of this complexity and keep their cloud bills down.


About the Author

Boris Goldberg is responsible for Cloudyn's technology and architectural direction. He has more than 25 years of hands-on experience in configuration discovery, configuration management and business service management solutions. Prior to co-founding Cloudyn, Boris served as Chief Architect for Evolven, and previously was a Senior R&D Manager and Senior Architect for BMC Performance Monitoring Solutions. Boris holds a B.Sc and M.Sc degree in Electronics and Ph.D. degree in Computer Science.  


Published Wednesday, January 11, 2017 7:01 AM by David Marshall
There are no comments for this post.
To post a comment, you must be a registered user. Registration is free and easy! Sign up now!
<January 2017>