Given most New Zealand businesses are adopting cloud in some form, and it’s not the easiest of transitions, we felt it was timely to explore the forces at work in the market.
The pace of cloud innovation and adoption is rapidly accelerating across industries, bringing opportunity, yet also greater complexity and risk.
In the first of a two-part series, we will highlight the nine main trends that we see have the biggest impact on an organisation’s journey to and use of the cloud.
In part two, we will show how organisations can respond and capitalise on these forces.
#1 - CapEx investments secure the Hyper 3 winners
Let’s start with Amazon, Microsoft and Google, which clearly dominate the global cloud services market. Collectively, the Hyper 3 have invested more than $30 billion in capital expense just this past year to build and scale their global cloud footprint. That’s an average of $1 billion per company per month—creating a significant gap between them and any remaining providers.
This substantial investment is not just for building infrastructure and facilities. The Hyper 3 are also investing heavily in innovative new services and capabilities at a pace that leave few if any competitors able to keep up.
#2 - Private cloud finds its specialty
There’s much uncertainty in the market about what defines a true private cloud. Opinions vary, and the multiple answers from a broad range of legacy vendors are a source of considerable confusion. However, successful private clouds are now defined around solving a specific use case, such as conforming to data sovereignty needs or supporting edge-use cases. Newer offerings to extend virtualised environments to public cloud, or bring public cloud attributes on-premise, are increasing with more and more adoption of new architecture involving concepts such as containerisation.
#3 - Cloud tipping point forces IT to run differently
Many of you may now be moving toward a tipping point, where a substantial amount of your workload is in the public cloud. Unfortunately, most IT organisations mistakenly treat the new estate as just another data centre and don’t see the need to shift their operating model to the realities of cloud management. In actuality, operating in the cloud requires a new cloud-based operating model, and along with it, people with new skills and new roles.
#4 - Multi-cloud is the new reality
The steady adoption of cloud services has created a complex computing environment. Some companies are in the position to plan for a multi-cloud environment, while many others simply find themselves using multiple vendors without proper planning, governance, or controls. From a cloud management perspective, this new reality makes it difficult to publish policy, manage costs, and maintain security.
#5 - Cloud management emerges as the next big challenge
In the world of hybrid and multi-cloud environments, managed services have become very complicated. Each cloud provider may offer a dashboard to manage its environment but achieving a unified view across a hybrid IT and public cloud estate is no small feat. No two cloud providers expose the same billing or management APIs, and no single tool can handle all enterprise management needs.
#6 - Native vs. niche
Your organisation may be facing the tricky decision of how, when, and where to use niche tools versus native cloud provider tools. These decisions can’t be made lightly—many pros and cons need to be explored.
#7 - Secure from start
Most CIOs and CISOs realise public clouds are more secure than their own data centres. The critical difference, though, is that the threat vectors in the cloud have changed. The actions of individuals can now have a dramatic and immediate impact on security and place a significant burden on the CIO and/or CISO to maintain a compliant environment.
#8 - Cloud’s pace of innovation drives fear of missing out (FOMO)
The pace of innovation in the public cloud is unprecedented. The offerings of new services and capabilities are astounding: literally thousands a year from a single provider. Skilled people in your organisation don’t want to miss out and will be eager to try every new feature.
#9 - Game over. Let the games begin
The Hyper 3 winners are solidified. As the rest of the market responds, shifting sands make for tricky navigation. We’re still early in the cloud’s maturation cycle and the market remains nascent. Niche cloud vendors are many but are tempting acquisition targets. When acquisitions happen, the game changes. A solution that once seemed multi-cloud aligned may become isolated because of the acquisition and force a pivot in a new direction.
And as the Hyper 3 get stronger, competitive intensity grows and will likely continue unabated for years to come.
This means if you align with the Hyper 3 you’ll benefit from greater innovation at continually lower costs. So, you need to navigate with care when choosing.
Suraj Sowki is operations lead at Accenture
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