IDC Analysts Opine State of the Cloud

 June 20, 2011, Cloud Leadership Forum, Santa Clara, CA—the opening session at the Cloud Leadership Forum was a panel of IDC analysts. The panel discussed “State of Technology: A Round of Lightning Insights with IDC Analysts”. The primary issue is that the cloud is disrupting all of the IT functions by changing the context of IT and removing hardware from the central focus of IT.

The analysts led by Frank Gens, SVP & Chief Analyst, included Richard Villars, VP, Storage & IT Executive Strategies, Robert Mahowald, Research Vice President, SaaS & Cloud Services, and Dave McNally, IT Executive Advisor looked at 12 “big things you need to know on the road to the cloud.

They focused on IT industry transformation, infrastructure and data, applications and platforms, and IT leadership. Gens took the first topic.

The Could Environment

The cloud’s about much more than the cloud
The cloud represents a third platform for IT growth and innovation. The systems will grow from thousands of apps and millions of users to trillions of things, billions of users, and millions of apps. Applications types will include social, big data, and analytics for areas like smart grid and many others. Users will take existing apps and build more value on top of cloud and mobile platforms. Cloud functions will reduce costs and increase services and success will be measured in linkages and the emergence of the next million services.

Developers will decide on which platforms to support, at most 2-4 devices per app. Companies will dominate segments and the time for vendor survival and selection will be between 2011 and 2014. Now there are many candidates for leadership, but most of them are gap fillers. No standards exist for cloud or services. The new model will be to reuse as much as possible. For example, E-Bay and Amazon have over 100,000 developers each. To get to the millions of solutions, just look at the iOS and Android markets for working models.

The public cloud will be more important than private
In the next 7-10 years, the public cloud will predominate the private clouds. While private clouds are a valid model for operations, the developers will follow the money and develop mostly for cloud operations. By ’15 one fifth of enterprise spending for apps will be cloud based. This year, 80 percent of all new enterprise apps will be on the cloud. Apps stores will dominate. The challenges include governance, security, and other issues, but money talks. Users need to get comfortable with the public cloud as soon as possible.

Over one third of your key vendors will be “Wikitrivia”
25 years ago, vendors faced a major transition from mini’s to PCs. Many of the vendors went away and are only known to today’s population as an entry in Wikipedia. The next 5-6 years will see a similar transition in the software supplier space and the software industry will be decimated. The new top five enterprise-class suppliers will include companies like Google and Amazon.

Villars described the coming changes in the industry.
Today’s converged IT solutions aren’t the endpoint of your data center transformations
We will see more prepackaging and layering since users want to get to 100 virtual machines per server in enterprise and service provider systems. Data quantities are putting a strain on existing architectures and the systems are showing their limits. All systems will migrate towards high reliability and large scale operations. One outcome will be a change to adopt shared cache in the storage arrays. Users will need to anticipate changes in the data center and consider if focused appliances will be better for some apps than a general purpose server.
The converged IT will be a virtualized environment. Some subsystems will have application specific hardware for specific loads. Shared cache systems are in development.

Big data: cloud storage platforms grease the skids
Cloud service providers bought almost 10 exabytes of HDD capacity last year. These storage systems deliver content, collect information which supplies the base for analytics. This data analysis is a new part of the IT world and drives big data to and from the rest of the system. Companies will have to integrate real-time analytics into their business models. Retail is a big driver for the new data systems, and the cloud is the builder, supplier, and collector of all the new data. Data mining will be the hot app.

Public cloud: even IaaS will go vertical
Intelligent industry solutions are growing with drivers like genomics, media and entertainment, and smartgrid functions taking the lead. The increase in “digitizing” functions is changing what IT is all about. Big storage cloud services are needed to support big vertical build-outs, but the storage is not going to be generic. The infrastructure is becoming more important when it is outsourced. For example, Technicolor changed from a “body shop” of service provider to a cloud supply chain vendor handling content from production to the theaters. Some vertical markets to watch are health care, video surveillance, and media infrastructure.

Mahowlad described the coming changes in applications and platforms.
“Bring your own license” means real deployment choices
In a recent survey, 38 percent of responders said that current software license agreements are the primary obstacle to grater cloud use. Projections are that $300B will be spent on legacy software this year. Changing the license terms could allow dedicated services on shared servers in multiple locations, allowing new ways to deploy the software. The software vendors could realize the same income per user while easing the audit and compliance requirements for IT organizations. Changing the license terms would smooth the transition to the cloud.

Licensing and big data will require new types of end-user licenses and the analytics of those data may entail embedded software. At the enterprise level, the license for analytics in not an issue, since the functions are already distributed. Businesses just want answers, so the data is the real issue.

IT organizations will become cloud service brokers
IT is changing from an internal service to a department that manages internal and external services as a unified portfolio of services concentrating on costing, service quality, utilization, and asset prioritization. This shift in focus will enable the IT organization to manage the entirety in a holistic way. The increasing complexity of services and operations requires integrating management functions so instead of SaaS bypassing IT, IT will buy and deliver SaaS. IT becomes a service center focusing on help desk and storage management and configuration. Many non-application functions now exist in the cloud, such as tools for management etc. IT will have to manage the public/private cloud and in 5-10 years, this management will be unified in a way to service the organization.
The broker functions include managing and monitoring service quality. The infrastructure is unknown, because some services may be for other cloud vendors.

You can’t avoid the personal cloud
Currently, 20 percent of PC’s, 50 percent of smart phones and 80 percent of tablets are employee owned and liable. Users are increasingly bringing their own desktop, devices, apps, and content into the workplace. Personal and work life are colliding in this space and creating management issues in areas like security and IP protection. The big issue is the intersection of public and enterprise clouds, where data gathering, location, social graphing, network preferences, and directory functions can be compromised.

McNally describe the big changes that managements must address
Reorient IT around services
Since projections show that over 52 percent of companies will have cloud services within the year, companies have to look at making apps move closer to the data architecture. Development delivers services, like Salesforce does now, not just apps. Point-point systems will migrate to integrated systems and service delivery. Challenges will include service level agreements and security. Sourcing will become more complex, changing form buying software to buying and managing services. The software vendors are helping in this transition to the cloud.

Disruptive technology disrupts workforce
The waves of technology and value created from that technology will change. The skills needed for development and technology management will go away as outsourcing grows. The cloud is outsourcing, but the technology stock and adoption of cloud services will require a change in the knowledge base of the workers. The time for customizations is reduced on cloud apps, so creativity shifts from build to buy and integrate. For the IT organization, this change represents a loss of purpose and a need for new people with new skills and roles. IT workers will need to have more business knowledge and abilities to become change agents, integrators, and brokers. There is a very large gap in attracting college graduates for these positions.

Cloud services enable a focus on innovation
CIOs will go from 24 percent of their time on innovation to over 54 percent. The cloud allows emphasis on business and not on infrastructure. One new focus will be on seeking competitive differentiation and developing new go-to-market strategies. As a result, CIOs will be working on the rapid adoption of new capabilities and business agility. The cloud cannot be planned, funded, or executed without ties to mobile, social, and big data. The IT opportunities range from changing hardware and software (easier) to improving process and skills (hard). The IT industry is ripe for change. Infrastructure changes must emphasize innovation and scalability for the coming changes down the road. The right choices will increase the business, the wrong choice results in Wang.