Cloud: The Year Past, The Year Ahead

During 2010, enterprises were figuring out and defining the cloud; in 2011, they’ll be putting clouds into action.

By Peder Ulander, Chief marketing officer, Cloud.com

It’s been a year of much technological advancement, but almost no technology came close to receiving the amount of buzz and discussion as cloud computing. Three trends that stood out.

2010 Trend #1: The emergence of infrastructure as a service (IaaS) management platforms as a key player in the cloud computing market

As cloud computing is starting to move beyond the hype cycle, enterprises are looking for technologies that can enable them to build a cloud easily and cost-efficiently. Over the past year several companies have either launched or further developed their IaaS technology to address the growing demand for innovative cloud platforms. According to an August 2010 report from the Yankee Group (Is IaaS Moving Beyond Just Cloud Fluff, enterprise adoption of IaaS is growing rapidly. More than 24 percent of large enterprises with cloud experience are already using IaaS, and an additional 37 percent expect to adopt IaaS during the next 24 months.

Open source also played a big role in 2010, as evidenced by the significant collaboration and co-opetition in the cloud infrastructure market. One of the key drivers has been the community-building aspect of open source. The cloud is still an emerging technology, and many organizations are merely testing it; therefore, the open-source element has inspired technological and business innovations. Another obvious reason is the possibility of decreasing costs even more with no vendor lock-in.

2010 Trend #2: The year of cloud confusion

Confusion and cacophony come with the territory for any new technology, so it was no surprise that an abundance of questions and discrepancies related to the cloud arose.

Disagreements about the true definition of a cloud and what constitutes a “false cloud,” combined with instances of cloud washing from some enterprise vendors relabeling legacy systems as cloud platforms, contributed to customer uncertainty. Companies had a difficult time determining which cloud solution to choose and how to avoid selecting an inflexible system that would not provide the economic benefits that make the cloud so attractive in the first place.

2010 Trend #3: The consolidation by classic IT vendors

This year alone, the number of cloud vendors has dramatically decreased due to acquisitions by major IT vendors. As soon as the cloud began to see traction and real use cases, larger vendors looked to expand their cloud offerings. The acquisition of cloud storage vendors, raises the possibility that storage will be a crucial issue in the cloud as it has been in virtual environments.

Looking forward to 2011, it will be interesting to see some of the market trends around consolidation as the larger, classic enterprise vendors fill gaps in their strategies around the emerging cloud market. Although consolidation will most likely continue through 2011, this is not one of my top three predictions for the coming year.

2011 Predictions

What’s ahead for 2011? One thing’s for sure -- we’ll see a continued emphasis on cloud technology. Here are my top three predictions.

2011 Prediction #1: Enterprises will build their own private clouds rather than turning to public clouds

If 2010 was all about testing the cloud and deploying small clouds, 2011 will be the year the private cloud will move beyond small, lab-based environments and leverage the cloud model as a way for managing and deploying new applications and services across an enterprise. Although slightly dated, The Google-ization of Bechtel is a great, early reference of what we may see over the next year.

Although most private clouds will be small at the start, I believe that 2011 will bring a few extremely large private clouds that will rival most service providers. NASA’s Nebula Project is a great example of one of these, but expect to see more in the social media/gaming market take shape this year.

Interesting use cases have already begun to appear, and even more will emerge in the market -- from mobile application framework to the cloud replacing HPC/Grid management for certain use cases.

Unfortunately, many enterprises will fail in building their own clouds due to their selection of the wrong technologies -- see “Year of Cloud Confusion” above.

2011 Prediction #2: New hosted offerings will be targeted at specific needs vs. replicating existing models in the marketplace today (i.e., Amazon clones) We’ll see the emergence of regional clouds that will focus on delivering cloud services that match the language, application, currency, and cultural focus of the growing local markets. This is significant as the major IaaS cloud providers today are North America-based. Additionally, enterprises will turn to managed service providers (MSPs) and other value-added providers for "hosted private clouds" in an effort to get to a cloud operating model while alleviating the concern around security and compliance (James Staten from Forrester recently predicted hosted private clouds will outnumber internal clouds 3:1).

In the market, hosting service providers talk about their double-digit churn rates of users moving off of VDC (hosted virtualization) to the cloud, which is driving their need to offer new services. In 2011, hosts will replace/migrate users from traditional virtualization offerings to a cloud environment or risk losing those customers to a public cloud offering.

I think in the first half of 2011 we will see everything from broad, volume-based cloud offerings that will challenge Amazon on a pricing model, to high-touch, white-glove offerings that will offer significant differentiation above the commodity cloud, in order to address vertical market needs (i.e., HPTC clouds, academic clouds, gaming clouds, etc.).

2011 Prediction #3: Open Source will continue to be a driving force behind infrastructure cloud adoption

As mentioned in the first trend of 2010, open source is beginning to play an important role in cloud computing, and 2011 will only see this trend become even more prevalent as the cloud becomes more mainstream.

Open source will also be a strong driver for smaller, private clouds in the enterprise. Similar to how Linux broke into the enterprise, open source clouds provide a low barrier to entry and enable users/system admins of all levels to test and prove use cases for where the cloud makes sense in the enterprise.

The Final Word

Now it’s time to sit back and see what happens. All that is certain is that 2011 will be the year of the cloud.

Peder Ulander is the chief marketing officer at Cloud.com. You can contact the author at peder@cloud.com