Four trends driving the cloud technology market in 2021

By Dave Friend, co-founder and CEO, Wasabi

It's hard to believe that 2020 is coming to a (welcomed) end. This year threw a lot at us - everything from a pandemic to hurricanes, wildfires and an unprecedented election - that completely changed our work and personal lives as we knew it almost overnight.

With a distributed workforce becoming the new normal for many, this move to remote work forced many industries to go digital by necessity, accelerating digital transformation while putting new demands on IT infrastructure. With this, we saw many organizations move to the cloud to accommodate this new work environment for greater access to data, and enhanced productivity and collaboration over long-distances.

While there's no way to know for certain what the year ahead will hold, it's clear that 2020 has acted as the catalyst for businesses to fully embrace the cloud. Here are four trends that I predict we will see come to the forefront of the cloud technology market in the year to come.  

A Richer, More Varied, Cloud

2021 will be a good year for the hyperscalers like Amazon, Microsoft and Google, but also for the many up-and-coming companies that offer components of a hybrid cloud model. Hyperscalers will not own the entire cloud - no matter how big you are, you can't be best at everything. Companies that focus on specific cloud services and execute on those limited functions better than anyone else will thrive. For example, Equinix's recent acquisition of Packet gives customers a new "bare metal in the cloud" product that does not really compete with the value proposition of the hyperscalers. Similarly, Wasabi focuses just on cloud storage, while companies like Stackpath, Akamai and others focus on artificial intelligence and machine learning, data analytics, and so on. 

It's important to remember that the value proposition for the hyperscalers is their "everything under one roof" approach. The good news is that these completely integrated services can make life easy for a developer. The bad news is that all of this dedicated software creates vendor lock-in and can lead to high costs. 

MSPs, VARs, and CSPs will Flourish

MSPs and system integrators will flourish as the result of this diversification of cloud services because their expertise is needed to stitch together complete solutions from a variety of best-of-breed providers. For example, backup software vendors like Veeam sell exclusively through the channel. Veeam cusomers are offered a more complete solution packaged up with other storage options that would only be possible through partnering with the channel. Instead of selling on-premises hardware, the channel is now learning that it might be more profitable for them (and better for their customers) to couple backup software with cloud storage. In fact, a new generation of MSPs, called CSPs (Cloud Service Providers) has emerged who realize that there's money to be made by working strictly with cloud-based products. 

Data as a Competitive Weapon

Looking back, the first 15 years or so of the cloud were focused on moving workloads and production applications to the cloud. Now, the focus is increasingly turning to data and the value that proprietary data can unleash. 

We are entering the "Data Age" where businesses increasingly depend on massive amounts of historical data. This data ranges from detailed maps of all the world's roads, gas stations and EV charging stations, to twenty years of X-ray data that can be used to train artificial intelligence to detect cancer that even an experienced radiologist can miss. As the leader of a cloud storage company, I see hundreds of successful companies whose entire business models are based on the accumulation, analysis, and sale of vast quantities of historical data. The world's data is migrating to the cloud, and we're saving increasing amounts of it for longer periods of time.

Surveillance Moves to the Cloud

I predict that the surveillance industry will be the next major industry to migrate to the cloud. There are 770 million surveillance cameras in operation around the world today, and that number is expected to grow to over 1 billion by 2021. Every year camera manufacturers come out with even-higher-resolution cameras that can pick out faces in a large crowd or read license plates from blocks away. 

All of this means more storage. I estimate that there are 200,000 petabytes of storage used for surveillance today. At my company's prices, that would be nearly a $20 billion market.  

So why has almost none of that data moved to the cloud thus far? There are two reasons, the first being cost, the second being bandwidth. My analysis is that the total cost of ownership (TCO) of the kind of on-premises storage used by the surveillance industry is in the range of nine to twelve dollars per terabyte per month. Moving that storage from on-prem to any of the hyperscalers' storage would actually increase costs. As low-cost cloud storage competitors enter the market at a fraction of the hyperscalers' costs, that equation flips.

Regarding bandwidth, surveillance doesn't usually produce a steady stream of data 24 hours a day. There are active periods, and there are dead periods. A hybrid approach where a few days of data is saved locally and streamed to the cloud as a continuous background process greatly reduces the need for extravagantly priced networks. As a result, 2021 will begin to see widespread use of cloud storage in surveillance. 

Regardless of what 2021 has in store, there is no doubt that cloud storage will continue to play a major role in the tech industry and organizations' data management approaches. As the cloud market becomes more diverse, we'll see a new wave of innovation across sectors from research in life sciences to the way Hollywood approaches film production. 

Now ask yourself, how do you see storage and data accessibility impacting your business in the year ahead?

##

About the Author

Dave Friend is the co-founder and CEO of Wasabi, a revolutionary cloud storage company. David's first company, ARP Instruments developed synthesizers used by Stevie Wonder, David Bowie, Led Zeppelin and even helped Steven Spielberg communicate with aliens providing that legendary five-note communication in Close Encounters of the ThirdKind.

David founded or co-founded five other companies: Computer Pictures Corporation - an early player in computer graphics, Pilot Software - a company that pioneered multidimensional databases for crunching large amounts of customer data, Faxnet - which became the world's largest provider of fax-to-email services, Sonexis - a VoIP conferencing company, and immediately prior to Wasabi, what is now one of the world's leading cloud backup companies, Carbonite.

David is a respected philanthropist and is on the board of Berklee College of Music, where there is a concert hall named in his honor, serves as president of the board of Boston Baroque, an orchestra and chorus that has received 7 Grammy nominations. An avid mineral and gem collector he donated Friend Gem and Mineral Hall at the Yale Peabody Museum of Natural History.

David graduated from Yale and attended the Princeton University Graduate School of Engineering where he was a David Sarnoff Fellow.