Kevin L. Jackson| Informationweek
In December 2012, Cary Landis and I made 10 predictions about how cloud computing was likely to evolve this year and how those changes were likely to impact enterprise computing. But things are moving fast in the world of cloud computing, reaffirming some of those predictions and altering others.
Here’s a recap of what I predictedthen and an update of how I see those trends unfolding now.
1. Cloud technologies will converge.
The cloud will continue to forge a massive convergence of technologies — similar to the evolution of the cellphone to the smartphone. The lines between platform-as-a-service (PaaS) and cloud services brokerages will blur into a conceptual operating system for the “Web as a platform” — providing tools to allow users to take advantage of multiple cloud solutions at once, and bringing the cloud closer to the end user in more meaningful ways.
Update: As the cloud computing marketplace continues to rapidly evolve and grow, the focus for buyers is shifting from software-as-a-service (SaaS) to infrastructure-as-a-service (IaaS). There is also a heightened awareness about choices around building, buying or leasing IT infrastructure services. For government agencies, this will lead to more options and opportunities, and will drive the need for additional analysis and a deeper understanding of how cloud computing technologies can be used to improve mission performance.
2. Custom software will hit the cloud.
For years, everyone looking at cloud computing has been talking about the “low-hanging fruit” of commodity email and infrastructure. But non-commodity custom software is beginning to move to the cloud in a meaningful manner. As of this year, PaaS and other cloud technologies have reached a maturity level that allows developers and integrators to build highly customized, complex offerings on the cloud.
Update: While PaaS technology continues to rapidly mature, the marketplace is still learning how to take the PaaS concept and extend it into the custom application development arena. The evolution of “optimal DevOps” business models and other operating models may push widespread adoption into next year. This trend will drive the adoption of PaaS by federal system integrators. Vendors that use PaaS to deliver custom software products, however, will be able to gain a significant cost advantage over those that do not, especially in the low-price, technically acceptable, government procurement environment.
3. Integration will become the new “killer app.”
The term “killer app” generally refers to the technology that’s so necessary it drives adoption of a computing paradigm. Complexity is the problem of the cloud era. The cloud is evolving into a hodgepodge of disparate cloud services from vendors that are scattered all over the world. IT professionals will turn to cloud services brokers to manage the growing complexity problem by integrating heterogeneous infrastructure services, while software developers will turn to PaaS for integrating disparate Web services to deliver seamless user experiences to their customers.
Update: Cloud services brokerage is becoming a key component for managing hybrid enterprise IT environments. A new entrant in the marketplace, the cloud access security broker, is emerging as a vital and complementary brokerage service. As cloud service standardization becomes more prevalent, federal system integrators will quickly morph into government service integrators that are able to deliver fully integrated, secure cloud-based service solutions on demand.
4. India and outsourcing countries will drive industry adoption of PaaS worldwide.
The software development outsourcing industry thrives on the value proposition of more for less; it’s what it does well. In 2013, PaaS will be adopted by companies in India and in other major outsourcing countries in a rapid and notable fashion. It will cause a ripple effect throughout industry because these outsourcing companies are so integral to modern business operations. The cloud makes geographic boundaries irrelevant.
Update:Major outsourcing countries are exploring how PaaS can be used to reduce development cost and increase margins. This is crucial to these countries’ continued ability to be the preferred providers of skilled labor. If such efforts are not successful enough, though, security concerns and the need to preserve domestic jobs will drive a retrenchment of the worldwide offshoring business. The economic savings enabled by offshoring also will spur an intense review of software acquisition policies. Continued enforcement of onshore development and software developer citizenship requirements may no longer become financially viable for many agencies.
5. Major data centers will go undergo a “survival-of-the-fittest” scenario.
Winners will emerge in the data center shakeout, as many large data centers will close and sell assets, or become acquired and consolidate. Ironically, the cloud movement spawned a “gold rush” to build new data centers at a time when the stated goal of the cloud was to reduce the number of data centers. The market is maturing, and the ultimate result will be a “survival-of-the-fittest” scenario as many legacy data centers will shut their doors, and many data center customers will decide to move some of their data to the cloud. Cloud services brokerages will play a larger role for data center service providers to help their customers sort out the confusion and effectively manage an increasing number of cloud service providers.
Update: Data center consolidation continues unabated. Mega-sized data centers will be augmented by smaller, regional centers. These regional centers will mainly provide caching and local storage services. Government agencies will feel ever-increasing pressure to divest themselves of government owned data centers.
6. Health IT will adopt PaaS to replace niche “dinosaur” apps.
The problem with health IT is that the enterprise systems have grown too large to merely replace, but there are limits to what they can do. For the healthcare industry to move forward and achieve the goals set out in the Health Information Technology for Economic and Clinical Health Act (HITECH), the cloud must play a major role in the next generation of healthcare IT. Healthcare CIOs are looking at how much it will cost to upgrade their HITECH-compliant systems — and they are finding that proprietary models will leave them with unfavorable lock-in, while others in the healthcare industry embracing the cloud march forward.
Update: With Obamacare scheduled to take full effect in 2014, next year will be a major transition year for the healthcare industry, businesses, government and consumers on the health insurance front, along with health-related technologies. SaaS, PaaS and IaaS governance within the healthcare industry will be an important challenge. Protecting digital health information also will be a must. Secure cloud-services integration and the robust protection of digital health information must both be accomplished to enable health information exchanges. CIOs will look to real-world case studies for guidance for the remainder of 2013.
7. Organizations will rapidly adopt cloud services brokerages.
The need to use multiple cloud services providers to manage multiple functions will create a fast adoption of the cloud-services brokerage model: either via a new internal role within organizations, or an external source, like the NJVC Cloudcuity Management Portal offered by my firm, or services like it. The new role of cloud services brokerages will be further defined and evolve over the next five years to provide niche services to organizations moving to the cloud, but also from the realization that buyers will require the use of more than one cloud services provider.
Update: Cloud services brokerage and cloud access security brokers are emerging as vital and complementary services. IT departments are currently struggling with learning these skills internally or partnering externally for these services. Management tools for this multi-sourcing environment are essential. To best deal with the new paradigm of hybrid IT, government security policies also will need to be reviewed and updated to manage the transition from infrastructure-centric to data-centric security postures.
8. The U.S. government will rethink major IT contracts.
Large system integrators, whose success long depended on very expensive, highly complex and customized, on-premises solutions, will redefine their practices and their overall operating and profit models, especially as more businesses go beyond basic, “out-of-the-box” cloud services and turn to the cloud for more customized implementations. U.S. government agencies will begin to add new requirements to several major IT contracts. The federal government is in many ways leading the path toward the cloud. In 2013 there will be a shakeup in government contracting practices. Incumbent system integrators will no longer be able to rest on past successes, as the government continues to transform itself and move toward the cloud, and as new cloud service providers offer innovative and cost-effective solutions geared specifically to the federal marketplace.
Update:Federal agencies are moving away from large omnibus contracts toward shorter-term, performance-based vehicles, according to the latest research from Gartner. This move is expected to reduce the strength of incumbent federal system integrators and spur them to transform their business models and solution offerings. Limited funding and sequestration are contributing to this trend.
9. Innovation and entrepreneurship will hit overdrive.
Entrepreneurship will go into overdrive, especially as full-featured, “idea-to-revenue” platforms take developers from concept, to development, to deployment and sales. Platforms like NJVC’s Cloudcuity AppDeployer and others will facilitate a new wave of innovation, entrepreneurship and disruptive startups that will make things interesting for system integrators. We’ve already seen an incredible wave of high-tech innovation, and the emergence of flourishing incubators and accelerators. Cloud platforms, for the first time, provide these innovators with all the tools they need to succeed, without requiring a multi-million dollar investment.
Update: Cloud computing is revolutionizing virtually every business model. Drastic reductions in the cost of IT will help the government effectively deal with ever-increasing fiscal pressures. It also will give the government the ability to deliver more valuable services to constituents.
10. Cloud adoption will move from an option to a “must have.”
The adoption of cloud computing will move away from something buyers purchase with surplus budget money to a “must have” service that replaces the traditional enterprise IT business model. Until recently, managers have viewed cloud computing as a proof-of-concept project or something that can be done or piloted with extra budget money. The reality is the cloud’s value can only be fully realized when traditional and more costly ways of storing, using and securing data are replaced with new business models that take advantage of fast-and-lean cloud services. In the coming year, companies will accomplish this by halting old projects, rethinking old contracts, and shifting funds to affordable and innovative cloud services that can transform the IT enterprise.
Update: Cloud computing is a rapidly expanding, multi-billion-dollar business. Amazon’s ability to challenge IBM for a $600 million federal cloud project signals this new era. Smaller and more nimble cloud-based services providers will spur competition and enable agency transformation.