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2016 Enterprise Cloud Predictions

Public cloud computing is still hot for the enterprise, even though we’ve been talking about it for years now. In 2016, however, the industry will see a decided maturing of offerings, with a focus on enterprise computing needs that go beyond development and . For instance, in the area of data management, especially big data analytics, the cloud is the only way to cost-effectively handle the scalability and elasticity needs of ingesting terabytes of real-time data on a daily basis. Moving on, here are some other areas to watch in 2016.

Public cloud security: A significant development at the Amazon re:Invent show was AWS’ announcement of its web application firewall. Today, there are limited options for a watertight public cloud native security solution, so Amazon stepped in to fulfill that need. Vendors that are trying to take their on-premise security solutions to the cloud aren’t yet succeeding in that endeavor. Just as traditional hardware vendors are becoming obsolete because of the cloud, infrastructure software is heading down the same path. Security-as-a-service providers are maturing their offerings, especially through security management services that help companies better understand the loopholes they have in the cloud. Alert Logic’s recent launch of Cloud Insight is a good example of the kind of innovation happening in pockets in the public cloud for security-as-a-service.  A majority of breaches in cloud are due to misconfigurations, so providers that can help monitor this risk and provide recommendations, are a great asset. Enterprise security is a complex problem to solve; enterprises want a single vendor that can deliver the full solution covering security auditing and logging, user access and control, API endpoint monitoring and overall governance. This will be the year when CIOs will work harder toward developing standards for configuration, reference architecture, tools and more, for working in the cloud.

Internet of Things: Most large enterprise vendors are staking a claim in the IoT marketplace, and cloud providers are no exception. AWS announced its IoT platform in October and the strategy is smart, taking a page from the Microsoft playbook of 20 or 30 years ago. Build a platform which makes it easy for developers to create applications and services on top, which thereby grows adoption of the base product. AWS and other providers will develop solutions helping CIOs securely connect sensors to the cloud and manage the data. This will solve one of the burdensome complexity issues around IoT. Developers love this model, because they can help deliver a business need but they don’t have to worry about the underlying technology enabling hyper-connectivity. Through a management infrastructure and standard frameworks for communications, cloud providers will make it dead simple for companies to start from scratch on IoT. The cloud is today the only way to launch and maintain an IoT project, given the extreme scale and real-time processing demands in these applications.

Big legacy applications in the cloud: Next year will be the end of IT executives complaining that the public cloud can’t handle their scalability needs in regard to large legacy applications. Massive instance sizes, such as AWS X1, will be available to deliver all the terabytes and processing needs required even by the largest of companies. A CIO can migrate the SAP or Oracle environment, unchanged, to the cloud. That’s a game changer. Let’s face it: big companies are not getting rid of their legacy ERP and financial systems anytime soon, and few IT executives want to spend the time, money and risk redesigning these monolithic applications for the cloud. We expect to also see increasing investment by public cloud providers in the full suite of enterprise IT requirements such as multi-layered security, auditing logging, and change management. CIOs must be able to track changes to their environment, no matter where the systems are being hosted. That is critical for compliance, security and governance. We are bullish that large companies will increasingly trust in the capabilities of major cloud providers to meet legacy application needs without increasing risk, or compromising productivity and customer relationships.

-Kris Bliesner, CTO

This article was first published on VMblog.com on 11/9/15.


Digital Enterprises Learning to Earnings Growth

Increasingly over the last couple of years, I have had more conversations with C-level executives who are asking, “How do I transition and change my business from where it is today, to a digital business?”  What is driving this discussion is that businesses are evolving rapidly to a global Digital Economy. In a recent article by The Economist, Where the Digital Economy is Moving the Fas, it is easy to see why the United States is in the center of high levels of digital development. Over the last two decades we have seen massive enterprises formed like eBay, Amazon and Netflix, and it’s been less than a decade since up and comers like Airbnb and Uber have been launched.  In short, consumers used to be confined to make purchasing decisions within a particular geography or source until digital businesses leveraged the internet to sell products and services worldwide.

In today’s Digital Economy, customers have more information and more purchasing choices.  Therefore, traditional businesses recognize that in order to keep the customers’ interest and loyalty, they must be relevant where their customers are spending their time, searching for information and making buying decisions.  Traditional companies are also facing competitive pressures online globally that they may not have had in the past.  Enterprises that are transitioning to becoming a digital enterprise are evaluating current revenue streams and how future revenue streams may differ.  A classic example is that of Blockbuster, who filed for bankruptcy almost five years ago for a few reasons.  First, they did not recognize how their customers wanted to buy, which was a reason Netflix prevailed.  Second, they were focused on how to increase (current revenue streams) in-store sales outside of movie rentals.  For more than five years now, this customer, along with many others I presume, has been happy ordering movies from home when we want and without feeling like we had to stop at another convenience store on the way home on Friday night.

In our recent whitepaper available for download, The Digital Enterprise: Transforming Business in the Cloud, we discuss other companies that have been successful in the Digital Economy.   Companies that are successful will learn more and earn more revenues rather than being displaced by upstarts. If you look at the most recent YOY revenue growth of IBM and Salesforce as examples, you may be shocked to know that Salesforce reported 38% growth while IBM reported -4%. Some traditional companies may be slow to change or resistant all together, while more agile and nimble companies are learning and seeing earnings growth and becoming the enterprise of tomorrow.

In this whitepaper, we have laid out our view of how companies can transition to being a digital business.  Cloud transformation isn’t just for emerging companies. The rapidly maturing infrastructure of the public cloud has finally hit the big time for big business. Many large companies have been dabbling in Infrastructure-as-a-Service (IaaS) for years. Now, well-known, major brands are taking the plunge to commit critical parts – if not all – of their IT infrastructure to the public cloud. These pioneers have every reason to be optimistic about what the future holds.

We are happy to help you make this transformation. Contact us to see how we can help.

Jeff Aden, EVP Marketing & Strategic Business Development