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Bluenet 2021 Predictions: The End of Cloud's Beginning

vmblog 2021 prediction series 

Industry executives and experts share their predictions for 2021.  Read them in this 13th annual VMblog.com series exclusive.

The End of Cloud's Beginning

By Kerem Koca, Co-Founder, Managing Director, Bluenet Technologies

By now, it goes without saying that the COVID-19 pandemic has had a tremendously catalytic effect on digital transformation. The overused term 'paradigm shift' works perfectly here - it's astounding how conversations in businesses have changed towards the cloud, services, and more emphasis on technology output than its ownership.

As such, in any other year, my predictions might be little more than appreciation for the gradual rise of the cloud era. But after 2020, that rise is no longer gradual, and in 2021, we'll see greater awareness and appetites for cloud translate into wholesale market shifts. It will be the end of the beginning of the cloud and the start of a new epoch in technology.

Enterprise cloud adoption will explode

The world stands at the beginning of what could be a decade-long investment cycle that will focus on data and digitalization. In 2021, Cloud adoption among enterprises will move from 23% of workloads today, to 47% at the end of 2022, and 80% at the end of 2024. This trend was building momentum, but the sheer rate of change will eclipse anything the market has experienced before. Company leaders are much more attuned to what digital can do, leading to wants from analytics to resiliency. Having a digital presence is now paramount, driving structurally higher levels of technology investment across the economy. Bluenet anticipates that 40 of the current Fortune 500 companies will be fully cloud-enabled - up from a mere one in 2020 - and will surpass 100 companies by 2022.

Legacy is in trouble

Legacy IT providers will be 2021's biggest losers. We can already anticipate this when looking at the technology channel. Market shifts urged vendors, resellers, systems integrators, and such to modernize, expand into annuity-based business models, and drive long-term modernization journeys as their core value. Now that attitudes are becoming distinctly in favor of cloud-based models, the on-premise addressable market will continue to shrink, and in 2021, we'll experience the tipping point. For example, one of the world's largest investment banks recently estimated that $1 of incremental cloud revenue resulted in a $2-3 decline at legacy vendors when the cloud was emerging. The IT services providers and consultancies that highlight cloud migration opportunities, consulting, and implementation will be the major beneficiaries of the upcoming cloud-centric investment cycle. To this end, we can expect a glut of legacy equipment on the market as enterprises start offloading their mountainous IT estates.

Transformation's real impact

It's fair to say that, before the pandemic, few of us had a complete appreciation for what the cloud era would mean. That future is still unfolding, but we can agree that it is one of the most drastic IT changes to hit corporate America in the past decade. Yet, at least technologists can admit the change, however nebulous, will be profound. Many on the outside still underestimate the impact and its requirements. In 2021, countless companies will discover how comprehensive a transformation in the cloud era is in culture and technology operations. They will realize that cloud is about how companies do computing, not where companies do computing. They will also note its dramatic effect on enterprises' IT workforce - both in the types of employees that will be needed and how technologists work within businesses.

Cloud-only leads the pack

'Cloud-only' companies and consultancies will be the stars of 2021. Their operating models will prove pivotal to success during this transition, assisting with wide-ranging cloud expertise. That expertise includes cloud migration, infrastructure, application services, and ecosystem partnerships, deep industry and cross-industry insights, data, and applied intelligence capabilities. After 2021, 'cloud-only' will very likely be the buzzword on everyone's list because of its apparent successes during trying and demanding times.

As I wrote in my preamble, many of these trends are not new. But their speed has changed, driven by market conditions that demand change, elasticity, resilience, and performance. We've seen this before: rapid innovation after the Second World War or the sudden adoption of cleaner cars during the 1970s oil crisis. A catalytic event fast-forwarded a technological revolution-ditto for the cloud era. Looking back, we'll mark 2021 as when it all changed for good.

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About the Author

Kerem Koca 

Kerem Koca, Managing Director and Co-Founder of Bluenet, focuses on developing leading practices around innovative and emerging technologies.

Kerem has more than 20 years of experience, specializing in global Financial Systems, ERP transformation, process optimization, IT strategy, Databases and Cloud Computing. Kerem has deep experience in global delivery models.

Kerem is known for his ability to design solutions to large, complex problems, and structuring/delivering long-term deals powered by automation and innovation. Collaboration, predictability, and accountability are key tenets as he delivers high quality outcomes that matter. He also champions strategic initiatives that drive client growth through collaboration.

Published Monday, December 21, 2020 7:24 AM by David Marshall
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