Reading the Cloud Tealeaves in 2018

By Sean Hackett, Research Director Cloud and SaaS, IDC

Sean Hackett, Research Director Cloud and SaaS, IDC

The key to successfully reading the cloud tealeaves in 2018 will center on one’s ability to more deeply understand the “why” of adoption and the “how” of implementation. There is no question that Cloud adoption for many years has been rising. The conversations related purely to adoption rates and usage, however are stale. For more insightful clues into the future one should look at the changing nature of the “why” and the “how” of cloud adoption and deployment. The implications will set the stage for 2018 and will have a significant impact on a broad swath of IT suppliers, enterprise IT and CIO’s.

Unless you have been living under a rock then it will likely come as no surprise that organizations continue to consume cloud services via a mix of on-premise, and off-premise resources. According to IDC's 2017 CloudView Survey, 78.5 percent of respondents are using public or private cloud, with 42.0 percent of respondents using public and private cloud. It may also come as no surprise that organizations are using more than one vendor to deliver their cloud services. In the same IDC survey, when the qualified, cloud-using respondents were asked to identify which vendors they're using to support their public cloud, private cloud, or cloud professional service’s needs, respondents identified an average of 4.73 different vendors, with over 75 percent of respondents identifying at least 3 different vendors.Interesting data, but what does this mean for suppliers and buyers of cloud services in 2018?

Traditional cloud (supplier) businesses focusing mostly on lowering capital cost (CapEx to OpEx, pay-per-use) and scaling is just plain old-school. While these traditional measures do remain, today there is a clear shift in the reasons behind cloud-adoption. Organizations cloud-objectives are increasingly being driven and measured in a much broader context. When organizations today think cloud, they relate success to the achievement of various business and digital transformation goals. You might be thinking, yes, but we have been talking about this for a hundred years. I would respond and say yes, I agree, but with the advent of IoT and data-driven applications the realization of true business benefit from IT and Cloud is finally front and center.This shift translates into a broader array of objectives for an-organizations cloud projects. The achievement of speed, responsiveness and the ability to bypass slow processes and agility, have increasingly become the achievable objectives.

"Organizations cloud-objectives are increasingly being driven and measured in a much broader context”

The evolving “why” of cloud adoption is being intersected by a change in the “how” of implementation. Heavy I know, but organizations today are increasingly living in a multi-cloud reality, where they have a range of clouds for various purposes. It must be this way, the complexity of today’s organizations, together with the breadth and strategic importance of workloads and often global cloud initiatives simply can’t be addressed by one model. Multi-cloud for most has simply been a logical evolution. However, the implementation of a multi-cloud environment can’t and shouldn’t be happenstance; instead it needs to be highly orchestrated and managed effort. As referenced previously, IDC data shows that organizations will use a mix of cloud platforms and vendors to deliver services. But it’s not enough to just use multi-cloud platforms especially when they are siloed, and the unintended result of a mish-mash of multiple cloud platforms and software solutions. Multi-cloud in this context isn’t new and it’s certainly not compelling. So, for cloud suppliers in 2018 it will not be enough to just use the term multi cloud without also focusing offerings and marketing initiatives on orchestration and management.

The implications of the shifts outlined in this article, for both suppliers and buyers of cloud services will be significant. Vendors and service providers will need to choose and refine where it is that they want to compete. Apps will aggregate around cloud leaders where there is choice, security, and availability, custom developer activity will coalesce around center-of-gravity players, and once key data is in the cloud it tends to stay put in general. Customers will also want flexibility to orchestrate and move workloads using common management software between existing infrastructure, private cloud, and a public cloud. Simple market messages of lower-cost will increasingly give way to a more complex narrative centered on business benefits and the realization of the ever elusive “digital transformation”. The growing role of the business in this whole equation will continue to affect the roles of enterprise IT and the CIO to that of an orchestrator or facilitator.