Cloud

Cloud computing: Not nearly hyped enough

Sometimes it seems as if cloud is old news, but the truth is we've barely scratched the surface on cloud adoption, even in established categories such as SaaS.

In the wake of big data, cloud seems like old news. Yet as Host Analytics CEO Dave Kellogg points out, we've barely scratched the surface on cloud adoption, even in established categories like SaaS.

Cloud, in other words, is not nearly hyped enough.

The future will take a long, long time

In 2013 the overall cloud pie grew to $131 billion, including such diverse segments as Infrastructure as a Service (IaaS), advertising services and Software as a Service (SaaS), according to Gartner.

Yet big as that sounds, we're nowhere near saturation, as Kellogg highlights:

"IDC predicts that aggregate cloud spending will exceed $100B in 2014 with amazing growth, given the scale, of 25%. Those are big numbers, but think about this: some 15 years after Salesforce.com was founded, its head pin category, sales force automation (SFA), is still only around 40% penetrated by the cloud. ERP is less than 10% in the cloud. EPM is less than 5% in the cloud."

Kellogg goes on to quote Bill Gates, who once stated that "we always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten." It's clear that enterprise IT is moving to the cloud. What's less clear is just how long it will take.

Signs of things to come

If anything, the cloud is underhyped, and by quite a lot.

Just ask Forrester analyst Jeffrey Hammond, who notes that "hype" is in the eye of the beholder. Or, rather, the mouth of the hypester:

[Cloud is] over-hyped by vendors, [but] under-hyped by successful adopters who get the culture shift and competitive advantage it brings.

Adding to this DataStax co-founder Matt Pfeil stresses that cloud "enables faster technology innovation" by letting developers focus on building applications, not infrastructure. In fact, cloud frees businesses from the shackles of old-school IT, waiting around for servers to be provisioned before getting to innovate.

Is IT obstructing the cloud?

Or would, if only IT would get out of the way.

Too often, what the business wants and what IT delivers are two very different things, and cloud takes the blame. As George Reese, executive director of Cloud Management at Dell, indicates, "[The business] goes to IT and says, 'I want cloud.' They are thinking (cloud = AWS). [But when] IT hears. 'I want cloud,' they are thinking (cloud = virt[ualization]). [The business] wants 'on demand, self service.' IT delivers them virtualization. Thus, cloud fails both."

Enterprise IT, in other words, delivers cloud according to the tools it knows, from the vendors it knows, and the line of business suffers as a result. Cloud computing isn't yesterday's technology dressed up in cloudwashed language.

True cloud looks, feels and smells a lot like Amazon Web Services, which is one reason I suspect AWS adoption is actually bigger than we think. Gartner analyst Lydia Leong pegs AWS's utilized compute capacity at five times that of the other 14 cloud providers in the Gartner Magic Quadrant combined.

That may be low.

An Amazonian cloud future?

So the real question going into 2014 is whether the cloud, as defined by the enterprise, simply means "Amazon." Today it seems plausible that the answer is a resounding "Yes."

But remember: we're in the earliest days of cloud computing, even in "established" markets like SaaS. For the vast majority of the cloud market, at least as detailed by analysts like IDC and Gartner, Amazon doesn't even play. Over time it may come to compete in SaaS and advertising, but this is doubtful.

But what doesn't seem to be in doubt is the enterprise's voracious appetite for more cloud services, be they business processes like salesforce automation delivered as cloud services or infrastructure made available as such. Each year we talk about security and other inhibitors to greater cloud adoption, and each year these fade in the face of the improved business and development agility the cloud affords. As such, we should expect 2014 to be the Year of the Cloud...just like 2013, 2012, 2011 and 2010 were before it.

About

Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. Asay has also held a variety of executive roles with leading mobile and big data software companies.

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