It’s cloud prediction time: IDC, Gartner (and I) weigh in
Analyst powerhouses IDC and Gartner both rolled out their latest cloud computing and big data predictions and statistics Thursday morning, and while some are bold, others might have you saying “Duh.” Here’s what they have to say, and how that squares with what I see.
On big data
“Big Data will earn its place as the next ‘must have’ competency in 2012″ (IDC). It’s hard to dispute this, if it hasn’t earned that status already. However, IDC does rely on some questionable logic to support its claim. It predicts 2.43 zettabytes of unstructured data will be created in 2012, but much of that is only a big data problem to the degree it requires a lot of storage. Photo, video and music files will comprise a lot of that volume, and I think we’re a ways away from doing meaningful analysis of those data types at a broad scale.
“2012 is likely to be a busy year for Big Data-driven mergers and acquisitions” (IDC). On this prediction, I think IDC is spot on. That being said, I don’t know exactly where those acquisitions will happen. NoSQL database vendors (for example, the red-hot 10gen) seem like ripe targets because they’re gaining steam among enterprises, yet only Oracle has really put forth the effort to develop its own. On the Hadoop front, Cloudera has been adamant about not being for sale, and many of the up-the-stack analytics startups (with the exception of Datameer, perhaps) are just too young.
In the general analytics space, companies such as ParAccel, Infobright, Kognitio, Quantivo and Attivio come to mind as potential targets.
“Through 2015, more than 85 percent of Fortune 500 organizations will fail to effectively exploit big data for competitive advantage” (Gartner). Wow! I guess it depends on how Gartner defines “exploit,” but I would argue that most of the Fortune 500 is already at least experimenting with activities such as sentiment analysis and data mining with Hadoop, which should result in some competitive advantage. Gartner does make a valid point about the velocity of data streams and the timeliness of data processing, though. If organizations focus too heavily and invest too much on early-stage uses of big data tools without looking to the future, they might not be prepared to fully exploit big data technologies as an engine for real-time decision-making.
On cloud computing
“[In 2012,] 80% of new commercial enterprise apps will be deployed on cloud platforms” (IDC). Eighty percent seems like a very high number, but without having read the report, it’s tough to gauge how accurate this prediction might be. If IDC is defining commercial as being customer-facing, and enterprise apps include even those apps by web startups, 80 percent might be perfectly reasonable. The percentage of apps deployed on the cloud will certainly rise as startups launch and use cloud platforms almost exclusively. And enterprises deploying new, non-mission-critical apps or apps not containing sensitive data (e.g., web sites and mobile apps) certainly are looking more at cloud-based options.
“Amazon Web Services [will] exceed $1 billion in cloud services business in 2012 with Google’s Enterprise business to follow within 18 months” (IDC). I think Amazon Web Services will do that in 2011. Google following suit by mid-2013 seems reasonable, too. I haven’t seen Google’s “Other revenue” line item analyzed like I have for Amazon, but Google pegged it at $385 million during the third quarter. Somewhere in there is Google Apps and App Engine revenue.
“IDC … expects a merger and acquisition (M&A) feeding frenzy.” Yup. And it’s probably right that SaaS companies will prove more appealing than PaaS providers in the next year. After seeing Microsoft’s trials and tribulations with Windows Azure, I don’t think too many large vendors are looking to jump headlong into that space just yet. One interesting prediction from IDC: Microsoft will buy Netflix to serve as a marketplace for apps and content.
“By 2016, 40 percent of enterprises will make proof of independent security testing a precondition for using any type of cloud service” (Gartner). Oh, yeah, this is going to happen. Not only will there be a third-party certification process as Gartner suggests, but I think there will be a strong tie to cloud computing insurance, as well. The safer a cloud is, the lower companies’ insurance premiums will be when using that cloud. Rather than viewing this process as some implicit acknowledgement that the cloud isn’t secure, I think cloud providers will embrace it as an opportunity to prove just how secure they are.
“At year-end 2016, more than 50 percent of Global 1000 companies will have stored customer-sensitive data in the public cloud” (Gartner). Gartner rationalizes this prediction in terms of cost savings for organizations, but I’d argue it’s directly related to the previous prediction about security testing. As cloud computing security improves, in general, and is bolstered by independent certifications and insurance policies, companies will feel a lot more comfortable putting sensitive data in the cloud. Furthermore, although most cloud providers will likely never put real skin in the game, cloud insurance will assure companies that they’ll be compensated in the case of data loss or security breach.
“By 2015, the prices for 80 percent of cloud services will include a global energy surcharge” (Gartner). I don’t see this happening. Unless, of course, we’re talking only about enterprise-grade cloud providers that already allow for negotiated contracts or co-located private clouds. The type of cloud business model pioneered by Amazon Web Services — now utilized by almost every developer-focused cloud service — relies too heavily on simplicity in pricing to include surcharges and other fees that will seem like nickel-and-diming to customers. That being said, if data center energy costs — which appear to be shrinking, actually — start to outweigh economies of scale for a provider like AWS, there’s no reason prices have to keep falling as precipitously as they have been.
Feature image courtesy of Flickr user pasukaru76; “fail” image courtesy of Flickr user Jeff McNeill; cloud data lifecycle image courtesy of the Cloud Security Alliance.
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Interesting article on future trends in cloud computing and the future of cloud computing with the endless benefits of moving the data and services onto the cloud .Cloud computing is reshaping IT and Technology as we know it as it ensures higher operational efficiencies.Just watched an informative video on cloud computing,Technology benefits,providing insight into cost savings and operational efficiencies@http://bit.ly/pY4d6k
Hello Derrick – Appreciate your thoughts on the IDC and Gartner predictions. Who would have expected 2012 predictions to be dominated by Big Data and the Cloud! I’ve shared my thoughts on Top 10 IT considerations for analytics that might be of interest to you and your readers… http://bit.ly/tMj7Ea
Thanks,
Mark Troester
SAS
Decent article, thanks. I think your “Wow” response is biased, to the prediction of “Through 2015, more than 85 percent of Fortune 500 organizations will fail to effectively exploit big data for competitive advantage” (Gartner).” Just because Fortune 500 companies are experimenting with stuff now doesn’t mean it will instantly gain traction – if these companies can continue making money and being profitable with their legacy systems, then there is little motivation to rapidly change. Case in point: in the early to mid-1990s big banks like JP Morgan, Swiss Bank Corp, First Chicago Bank were “experimenting” with NeXT computers and Object Oriented Programming (yes, writing “apps” in Objective-C). That doesn’t mean there was a mass adoption of NeXTSTEP immediately (now in the year 2011 you will see mass adoption of “apps” for iOS by these bit companies)!
Derrick,
Great point. “If organizations focus too heavily and invest too much on early-stage uses of big data tools without looking to the future, they might not be prepared to fully exploit big data technologies as an engine for real-time decision-making.”
Cloudscale’s Realtime Hadoop solutions (cloudscale.com) give customers the big data power and scalability of Apache HDFS, Hadoop and HBase, together with Cloudscale’s super-fast and super-scalable HRule engine for realtime big-data-driven automation.
Bill
This is an interesting set of predictions, not least because Gartner appears to be accepting that major enterprise change takes more than a couple of years, whatever type of transformation you are pursuing.
Cloud services are inevitable for most organisations. We have seen a very successful wave 1 of these tools proliferate the market. The most successful of which are where a common, repeatable process has been extracted from the enterprise and replicated in the cloud. Good examples are CRM, problem ticket, payroll or even application stores, in which vendors have taken a common set of requirements and delivered them securely. If you were starting a new business, you could undoubtedly run most of your tools inexpensively in the cloud, taking advantage of features that would cost significantly more if you were running in house.
The challenge for most organisations comes in managing the change. Taking an internal system and moving to an established cloud vendor can be a painful process of lost productivity, user training and different functionality. Even with tools such as Office 365, the change has a cost, even if the functionality is 90% the same. On an application by application basis, the ROI can be a considerable barrier.
So we’re now seeing wave 2 – the ability to take your existing infrastructure and host it on the cloud (IaaS), or re-develop your application (PaaS). Both are designed to provide enterprises the ability to move vast swathes of infrastructure to an external vendor, scaling up and down based on application requirements. The challenge for cloud vendors is to truly make this offering as flexible as running internally. Of course, the change is going to cost, but for applications with a big infrastructure, it makes perfect sense to make the investment.
At Juriba, we focus on the desktop space, and the upcoming Windows 7 / desktop virtualisation transformation facing most organisations in the next two years. Our predictions are much more in the immediate future:
1) Enterprise Windows 7 transformation will begin in earnest for most organisations in 2012 when they can no longer hold off the budget
2) Toolsets for discovery, inventory, profiling, analysis, project management and deployment will continue to mature as organisations look to find ways of accelerating the project. A consolidation of point solutions into a more meaningful migration toolkit will be required.
3) Resources with the project/programme skills and experience will be scarce, driving up cost
4) Many companies will avoid desktop/application virtualisation due to the additional complexity and cost associated with the change, combined with the lack of time left to execute the migration
5) Citrix will sell a lot more published desktop than VDI. The cost and ease of migration will encourage organisations to take a first, simpler step to Windows 7
6) BYO (bring your own) device will not see major adoption in large enterprises during 2012 whilst they focus on infrastructure and migration concerns
7) In an effort to reduce cost, many small to medium enterprises (SMEs) will attempt the migration in house
Barry Angell (CTO) – http://www.juriba.com
2012 will be the year of Big Data Analytics in the Cloud. DW appliances are interesting, but the need to scale and leverage a more optimized compute environment drive businesses to cloud computing.