Cloud Computing in 2016

We have all heard it before.  Cloud this and cloud that each year. "This year will be the year of the cloud"... Why should 2016 be any different?

A few things that will make Cloud different this year than in past years, especially for those tech companies striving to adapt their portfolios for cloud.

For those that somehow don't know, cloud computing is running your companies computing resources on a vendor's infrastructure rather than doing it yourself.  There are certain well defined criteria that make it cloud, rather than, oh say, traditional outsourcing, but that is for a different article.

What makes 2016 different?

• Transparency

Last year, the two top cloud providers in the industry started reporting their cloud financials separately from their traditional revenue streams.  Why is this important? 

By doing so, the market understands the true cloud business and the revenue, profit and projections for the cloud services.  Alot of traditional tech giants claim cloud revenue or market share, but there is very little insight into their actual numbers.  This leads to a industry that has overlap with the traditional delivery models.   But because of the transparency of the top cloud providers, this will inevitably cause transparency of the traditional tech giants.

This will ultimately lead to an educated marketplace and educated consumer base that will want true cloud services instead of re-branded or re-marketed traditional services.

• Real Growth

A recent report  analysts stated that cloud spending is still relatively small.   But the real value is in the growth numbers. Non-cloud infrastructure spending is flat and did not grow between 2014 and 2015.  However, Cloud spending is expected to make up 60% of total IT spending growth by 2018. 

So companies are investing more and more into cloud and  adoption is growing.  Traditional IT is being cannibalized.  Why is 2016 any different?

Traditional IT delivery companies must adapt. 

The client base is smarter.  Transparency is becoming the norm.  Companies can not dress up traditional IT products and services and call it cloud anymore.  They will have to do more than just position themselves as cloud providers.  They will have to change business models, go to markets, sales channels and more.

2016 will see a year of companies doing more than just transforming in financial reporting.  These traditional companies will transform their portfolios.  They will be required to in order to be transparent to the market about their revenue objectives.  They will bring to market real cloud offerings in order to meet the demands of an educated consumer base and an educated investor market.