Cloud computing is the way of the present and the future. The cloud world just keeps getting bigger. We’ve already talked about the kinds of services, infrastructure, platforms, and software that you can get. We’ve also looked at how those services can be used in public, private, and hybrid clouds.
Now we’re taking a look at why we keep seeing more and more cloud products. Big tech companies are putting more of their investment dollars in the cloud. Let’s look at why and what this focus means for long-term planning.
The Future of Cloud Computing by the Stats
The numbers are clear. They show fast cloud computing growth that isn’t slowing anytime soon. So fast that the future of cloud computing is probably a bigger market that we can even imagine today.
As we can see in this chart, Public cloud market revenue worldwide from 2012 to 2026 (in billion U.S. dollars), from Statista, public cloud services have grown a ton. From just $26.4 billion in 2012, revenue has boomed into the hundreds of billions today.
In fact, Gartner says that cloud services have grown even faster than initially anticipated. Its latest cloud report estimates that by 2020 total cloud revenues, including cloud advertising, will add up to $411.4 billion. What will be used the most heavily? Cloud advertising, Infrastructure as a Service (IaaS), and Software as a Service (SaaS).
Plus, there is another revenue increase to ponder. IDC estimates that this push toward using cloud services also means increased business revenue for cloud users as well as providers. In 2015, IDC expects that “cloud computing accounted for more than half a trillion dollars of business revenue.”
So what is fueling all this cloud computing growth? And how is cloud technology impacting business?
How Changing Business IT is Fueling Cloud Computing Growth
Remember the many benefits of cloud computing we outlined in our earlier post? Cloud computing frees up funds so businesses can invest more in core products and research. Cloud tech is also the way that a business can upgrade faster, use the newest technology, and feel the most secure. Companies want the cloud, and the cloud is growing to give us what we want.
- IT cost savings are huge.So IDC finds that business revenue has gone up because of cloud usage-what made that happen? A big part of this increase is due to savings. IDC found that businesses may spend 71% of their IT budget on system upkeep when a company is using an in-house datacenter. Yes, your IT department has to spend a lot of time patching and updating hardware.With a cloud service, a company relies on a cloud provider to take care of those maintenance tasks. It’s clear that there is an opportunity to free up funds that can be invested in your core business instead.
- The future is more cloud spending, less in-house IT spending.So it makes sense that IDC estimates that the average compound growth rate of cloud spending will outpace the same for IT spending by six times in the next few years. (It estimates a 19% average compound growth rate for cloud services from 2015-2020, but only a 3% rate for IT spending in the same timeframe.)
- Cost comparison estimates show that the cloud can mean less overall spending.
Bloomberg Intelligence, as reported by MarketInsite, also estimates a significant savings. Its April 2017 cost comparison shows that owning and maintaining in-house systems may cost 30% more than using cloud services.You would expect these cost differences, right? Is your company’s expertise finding the best hardware and keeping up with how it needs to be updated or patched? Probably not. Most of us have had to take on a lot more IT in our day-to-day routine to manage everything that we want to accomplish. We would preferably focus on growing our core products and services. So it’s not surprising that the future is an option where we have access to the tech we need without having to become experts in maintaining it.The right balance won’t be the same for every company, but all signs point to each of us starting to use more and more of the cloud.
- Fast anywhere, anytime scaling is another demand fueling cloud growth.
The cloud offers so much more than offices of all sizes could ever imagine. Even if your company sits on a massive resort-style lot. Big cloud service providers are showcasing data transfers that put the equivalent of two billion filing cabinets of paper on neatly tucked away cloud data storage, far away from your tidy desk.And you can access what you need, when and where you need it. An office in Chicago needs more computing power today-use it on the cloud. Plus, it’s not the computer you bought five years ago that you’re pulling out of storage. It’s new and up-to-date. Your other office in Seattle is using less today; you don’t have to keep paying for what they’re not using.The ability to get what you need in an updated, easy-to-access package makes so much sense. Yet, another reason for unstoppable cloud computing growth.
Cloud Providers are Investing in Big Growth
With the cloud computing news trending to more demand, it’s not surprising that the big players are focused on rolling out more and improved cloud products. What will we see improve as the competition keeps pushing everyone? Every company wants to offer faster, cheaper, more secure, and more integrated options.
- Google is a good example of a company seeing a big market, and making big moves.
Google hasn’t been a big player in the cloud service area, yet. Recently, Google parent Alphabet’s chairman Eric Schmidt noted that the company has put “$30 billion” into its cloud platform.And some of these investments are pretty interesting. How about the undersea cable installations, including three from Los Angeles to Chile, from the U.S. to Denmark and Ireland, and from Hong Kong to Guam, that are supposed to be ready in 2019? These will significantly expand their network reach.They’re also working on an integration that seems obvious, but may be game-changing. Google is working to combine more of its data and analytics power into its cloud offerings. Google is the king of big data, so this could be a big set of products.
- Microsoft’s focus on helping companies build hybrid clouds has Forrester predicting a big jump in hybrid cloud use.
Remember that a hybrid cloud combines public cloud (fully off-site) pieces with private (on-site) cloud centers. A product that helps companies install this combination is Microsoft’s Azure Stack. Azure Stack lets your company more seamlessly use a Microsoft’s managed public cloud and your own private datacenter resources together. Integrating gives your employees easier and more consistent access to both your public and private cloud resources.As reported by Forbes, one of Forrester’s top ten predictions for cloud computing growth in 2018 is that Azure Stack will lead to a jump in hybrid cloud use. As more companies use the flexibility of the public cloud combined with the added security of private clouds, Microsoft will continue to expand Azure Stack.
- Cloud-focused security is its own focus area.
Tech Crunch recently outlined some of the new data security questions posed by cloud usage. Two big ones: protecting cloud storage from hacking and making sure mobile access to data is secure.Centralized data means stronger security needs. And this means that the big providers bring in and/or partner with more expertise. Security-focused companies will have a bigger role to play and will also be looking to expand revenue with cloud-focused security.
Also, with so much data being accessed on-the-go, securing mobile access with encryption is another area of cloud computing growth. Again, companies with expertise are adding to the cloud world, and reaping the revenues, by offering add-on encryption. Cisco’s CloudLock, for example, adds encryption to public cloud usage.
How Your Company Can Get Ready and Get On Board
So clearly, the cloud is growing. Not just a fad or today’s trend, the cloud makes the most sense. We all need the right tech to run our businesses, but how much maintenance work should we take on? The answer isn’t the same for everyone, but getting stuck in the old IT world isn’t anyone’s best bet.
As you can see, cloud tech comes in so many shapes and sizes now. The right set of cloud infrastructure, platforms, and software for your company is a necessary question for your company’s long-term planning.
- Rethink your IT investments and expertise.
Two of the big questions are how much do different combinations of cloud and onsite tech cost and how do you begin to implement them?It’s true that transitioning to cloud infrastructure and platforms is not costless. The question is what upfront transition costs will give you long-term savings and make your company more productive? Remember that this new IT plan means investing differently.
Think about finding the right partners to help you transition. Also, think about how you will begin to shift the focus of your on-site IT to help you manage your cloud resources.
- Learn about integrated and add-on security and find the right fit for you.
Something that stops a lot of companies from moving to the cloud is the concern that your data won’t be as secure as you need it to be. But security is a big focus for cloud providers, and there are a ton of options. You might even be surprised when you start comparing your current security strategy to what the cloud offers.Take the time to figure out your main security needs. From there, you can decide what combination of public and private cloud or add-on security you need to meet those needs.