What to Expect from Cloud Computing in 2016

In 2015 there was a large movement among business to get on board the cloud train.  In truth it has been going on for some time, as cloud platforms have matured more organisations have shifted part and in some cases all of their workloads to cloud. Those that were clever enough to recognise the importance of it and jump right in at the beginning are now reaping the rewards in the form of differentiated product and service offerings and new revenue streams.

In 2016 we are likely to see accelerated levels of innovation amongst major cloud vendors, new offerings and further development of technologies such as containerisation and IoT.  Moving off legacy to hybrid hyper-converged architectures will be the focus for IT staff, as well as development of new solutions built on and optimized for cloud.  In all of these cases we can expect to see security and regulation to be important topics.

The year 2016 has even more promise.  Please read through the following predictions to see what this year holds and, whether you believe our predictions are accurate or are not, feel to leave a comment below. I’d love to hear your thoughts!

Let's have a look at what is likely to happen this year…

Cloud Market Consolidation

2015 ended with the announcement of the Dell-EMC acquisition for a whopping total of US$67 billion which set the stage for hyper scale vendor consolidation in 2016 and beyond.  We have also seen first moves by the cloud and technology vendor Rackspace to resell AWS services and Azure by HP.

This trend is not likely to diminish in the future; in point of fact, it's likely to speed up.  How companies choose to consolidate in the future will reflect their own priorities.  You will see companies filling product line voids and moving into other areas of cloud innovation. This will require strategic foresight to determine the correct area to focus on that current capabilities can support, and to identify where there are opportunities for a company to differentiate itself and carve out a profitable new market niche.

Cloud Performance and Cost Optimisation

Many of the organisations that have identified and migrated part or all of their workloads to cloud will now need to consider ways to optimize their use of the cloud to drive further productivity and generate cost efficiencies.  After all, basic lift and shift will not deliver efficiencies from the cloud and may actually attract additional costs; it should not just be about migration to the cloud but about the transformation of IT systems, infrastructure and operations. 

To drive further efficiencies, more organisations will be looking to adopt tools such as Cloud Ability to track costs and Cloud FX to enable effective consumption, orchestration and monitoring of cloud services.  These relatively new technologies will enable data driven cloud life cycle management, cloud orchestration and cost optimisation. 

DevOps and Continuous Delivery will be the driving force behind IT delivery optimisation.  Companies will be breaking down organisational and functional silos, modernizing their operational delivery teams and redefining their automation practices to optimize service, product time-to-market, and quality.

Enterprise uptake of Public Cloud

AWS, Azure, and Google will focus more on growing Enterprise accounts by establishing partnerships and joint ventures with consulting firms and system integrators that understand business drivers for change and can link business needs to technology investments.

Enterprises will be challenged to select the appropriate cloud platforms that will enable them to be more agile and innovative. To do this they will need to have a good understanding of their current architectures and what cloud products would be the right fit.

Hybrid Cloud Will be the New Foundation

We can expect a further fall in use of private cloud systems and greater emergence of hybrid cloud environments, and migration of non-strategic workloads to public cloud.  Large Banking institutions and Healthcare organisations, where data privacy and security is paramount, will continue to be big adopters of hybrid cloud solutions.  They will use private clouds for business-critical applications, with interconnectivity to public cloud for non-strategic applications that don't store sensitive customer information.

Large enterprises will be challenged with implementing hybrid cloud environments that enable them to move away from legacy IT, while maximizing the benefits of cloud including greater scalability, security, availability, performance, and reduced capital expenditure.  The end goal will be to establish cloud environments that enable them to focus on value-added tasks while moving away from traditional administration and management of IT as it becomes commoditised.

Cloud Innovation: CaaS, Security, and IoT

Companies born in the cloud have had a lot of time to investigate the business and competitor landscape, and to develop unique strategies.  They started small and agile, unafraid to challenge traditional operating models and innovation quickly led to differentiation and significant value.  Large companies with momentum and inertia will find it hard to change direction and business models quickly.  So where can we expect further disruption and innovation?

Container as a Service (CaaS)

Containerisation is an emerging technology, but not a new concept.  It will continue to be the key enabler for agile development of micro-services architectures.

Investing in CaaS is bound to pay dividends as use of SaaS continues to grow.  Containerized local duplicates can be thousands of milliseconds faster saving everybody time and money.  And it will always work exactly the way it was designed originally because it takes its environment with it, and it conflicts with nothing else on the system.

Security

Historically there has been a general cautiousness in industry about moving private applications, business, and customer data to third party cloud infrastructure.  For 2016 and beyond, this worry will continue to diminish through improved cloud based security technologies and more general acceptance of the cloud as a secure medium as cloud adoption grows.

IoT

Clearly the Internet of Things (IoT) is here to stay and grow.  IoT will affect virtually everything and will certainly be one of the largest areas of growth in the sector.  Expect household refrigerators to be placing food orders, cars to schedule their own regular maintenance, and your health-monitoring bracelet reporting directly to your physician. 

Don't be fooled, the current IoT market will see $341 billion spent in 2016 driving the number of connected things to 6.4 billion, or a 30% year-over-year increase.  By 2020 those connected things will double, totalling 13.5 billion.

Regulatory Standards and Policies Catching Up

As the rules and regulations for data security evolve, enterprises will become more comfortable with trusting that third party providers have sufficient incentive (or face significant enough penalties) to do their job properly. 

New compliance requirements and policies will enable greater proliferation of cloud-based services and peace of mind for enterprises looking to adopt them.  Companies will be challenged with understanding the regulatory landscape (privacy and security of information), and balancing this with their own risk-appetites; and they will need to develop a clear understanding of cloud providers' security measures in implementing cloud solutions.

The Takeaway

All of these issues are important and worthy of your consideration. I hope the year 2016 will bring plenty of positive change for you and your organisation.  As many of these predictions have already made a tremendous start in 2015, can we expect them to come true? We have 2016 to find out. 

Follow me for further updates on the upcoming cloud computing trends.  If you have any further questions or would like to have a discussion in relation to the topics listed here please reach out via LinkedIn.