2016 View: Cloudy With a Chance of Consolidation

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Cloud Outlook

As a growing number of businesses embrace the cloud, these five major trends will shape this technology's adoption over the course of 2016 and beyond.

By Michael Liebow

In 2016, we will see enterprises accelerate their shift of applications and workload to the cloud. In fact, we are at the beginning of a noticeable revolution in which enterprise use of the cloud matures significantly.

As a growing number of businesses embrace this technology, the following five major trends will shape cloud adoption over the course of 2016 and beyond:

1. IT operations (finally) get cloud religion.

After years of reticence, IT operations will begin to manage cloud sprawl and shadow issues, shifting cloud adoption into overdrive. While this is largely a positive development, it presents some challenges for both IT operations and lines of business.

For its part, IT organizations will have to resist the urge to employ antiquated skills, methods and tools that would treat cloud services as “just another data center.” At the same time, the business side will have to better align itself with IT to ensure a delicate balance between innovation on one hand and security and compliance on the other.

Meanwhile—and perhaps most important—cost control will become a significant priority across the enterprise as the shift from multiyear CapEx models to monthly OpEx models requires major operating and staffing changes.

2. Organizations evolve to a public cloud-first approach.

In 2016, innovation in the public cloud will outpace private cloud capability by a wide margin, generating value and competitive advantage for early adopters (as it always has). The “Hyper 3”—Microsoft, Amazon and Google—will outdistance their rivals both technically and economically.  

This is likely to drive more mergers and divestures, as legacy vendors struggle to grow, exit entirely or pivot to “hybrid cloud” management. Indeed, we may witness some strange unions.

In this period of transformation, buyers will need to be well-informed to ensure they are getting the best deals and to avoid “false clouds.” Those that won’t—or feel they can’t—adopt a public cloud will invest heavily in building cloud capabilities within their own walls.

Organizations seeking to create their own cloud environment will need to evolve their baseline IT competencies and assess their needs. They’ll have to consider adopting an outside-in approach to seize best practices of public clouds, while managing risk tolerance and competitive intensity. 

3. DevOps becomes an enterprise reality—but requires operational shifts.

The concept that applications and infrastructure are forever entwined requires a change in organizational thinking. Companies can’t achieve the level of innovation they seek without increasing continuous improvement, automation, speed, self-service and elasticity. 

Migrating to the cloud means that apps and infrastructure are one and the same. Culturally, however, there is a schism: Developers don’t necessarily want to do operations, and Operations professionals don’t necessarily want to engage with Development. This chasm creates a significant dilemma for organizations struggling to realize the economic and technical benefits of the cloud.

Companies that want to "do" the cloud must "do" DevOps, and they must be willing to disrupt their own business models, processes and cultures. The essence of the shift means embracing failure as a cultural competency.

This “culture of failure” allows continuous experimentation to learn quickly what works and what doesn’t—without burning through significant monetary and human capital. In the world of the cloud, failure can bring ample rewards.

This article was originally published on 2016-02-23
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