Cloud: the picture in 2018 and beyond
Five years ago it was a fad, in five years' time it will be everywhere
What will the world of enterprise IT look like in five years' time? This perennial question will never be easy to answer, but it is one to which IT leaders must constantly apply themselves.
Five years ago the CIO's crystal ball would have certainly have indicated a greater role for cloud computing. Cloud hype was at its loudest and most strident then and of course there were many sceptics and naysaysers, but looking at where we are now it's arguable that cloud's importance may actually have been underestimated.
Cloud computing in all its various forms has become central to so many services and business models, and it's still moving incredibly fast, with the big vendors offering new tools and services every single day. So-called cloud-native technologies, those deisigned specifically for distributed systems and massive scalability and resilience, have really taken off in the last year, and multi-cloud and cloud-first strategies are starting to make sense for everyday organisations, not just those at the cutting edge of technology.
And before we can catch our breath we need to prepare for the next change, one defined by a new wave of automation. Cloud services will grow in importance at both the centre and the edge of operations in smart cars, smart cities and smart homes. In five years' time, cloud will not be cloud at all. It will be, literally in the case of smart homes, part of the furniture.
Blurred lines
A few years ago cloud was mostly synonymous with infrastructure and services like EC2 whereby you simply took your data and stored it in Amazon's data centres. Later, Microsoft, IBM and others started adding operating systems and other services and PaaS was born. This was handy for marketers, but in our recent research we found that most of our respondents don't think in terms of PaaS and IaaS at all, instead they look for a suitable service at the right price by a vendor capable of meeting their needs.
To confuse matters further, software as a service (SaaS) is morphing into PaaS as vendors such as Salesforce and Workday have started offering up their platforms to developers, and these days there's almost nothing that can't have the suffix "as a service" bolted on to it.
So what we have is a cloud continuum, with barebones IaaS at one end and full-service platform including applications at the other.
Another blurring of lines is represented by a word we started hearing about a couple of years ago - multi-cloud. This describes a situation where companies pick different cloud providers for different tasks rather using one for most of the tasks.
While slightly more people this year than last said they were using a multi-cloud or best of breed approach, 26 per cent versus 22 per cent, most either weren't deep enough into cloud to have formulated that strategy and are doing so on an ad hoc basis.
So platform and infrastructure are merging, and gradually applications and data are becoming more platform agnostic and interchangeable.
First a little perspective though. Cloud is undoubtedly growing in importance, but for most firms it's still on the periphery of their operations. Twenty-nine per cent said they use cloud to a great extent with 59 per cent saying they do so to a lesser extent. Incidentally the same figures last year 21 per cent and 64 per cent.
So perhaps one-quarter to one-third of UK organisations are what we might term entrenched users of cloud services.
But the direction of travel is clear. Eighty-one per cent of our respondents believe that the use of cloud services would increase over the next 12 months compared with just two per cent who think the opposite.
Platform agnosticism
The lion's share of the growth is being gobbled up by the public cloud as more companies move more commodity data and applications out to AWS, Azure and IBM or adopt Office 365 or Salesforce. At the same time vendors with a heritage of in-house systems like SAP and Oracle are doing their best to encourage their current customers to move into the cloud.
Private cloud is not going away though, far from it. Many organisations are loath to part with their crown jewels, preferring to keep them close. True hybrid cloud capability with seamless operations across public, private, and even bare-metal is becoming less of a challenge than it once was.
There are a couple of interesting trends going on around compatibility. One is the breaking up of monolithic applications into microservices deployed in containers. Using something like Kubernetes to orchestrate these containerised apps, they are essentially platform-agnostic, able to run on any cloud or server. This starts to make multi-cloud more of a practical reality - although of course most organisations will still have the legacy of monolithic applications to think about for years to come.
Applications may be becoming more portable, but moving data between platforms is still a massive challenge
Then there's the data. Applications may be becoming more portable, but moving data between platforms is still a massive challenge. However, steps are being taken here too. Some of the major cloud platforms seem to be acknowledging that the days of having a single platform supporting most data and enterprise applications may be numbered. The Data Transfer Project (DTP) was started by Google last year. It has now been joined by Microsoft, Facebook and Twitter. The idea is data interoperability between platforms.
So, early days yet, but perhaps an indicator of the way things are moving.
The bottom line
One of the original cloud drivers was the apparent potential for reducing costs. Certainly some companies can save a great deal by rationalising their operations in the cloud, and after all, it's an easy sell to the board.
"We find cloud infrastructure to be significantly less costly than co-location," said the head of IT a charity.
However, while some may genuinely be able to cut expenditure by moving data centre operations into the cloud, this is by no means the case for all. Dedicated high-performance computing, for example, is likely to be much more expensive, as an IT leader working in scientific research told us.
"Once we added it all up - licenses, use of infrastructure as a service, storage, RAM, CPU -the cost was about double for the same level of service that we get internally," he said.
Cost comparisons between on-premises and cloud can be fiendishly complicated, with numerous factors to take into consideration including software licensing, hardware depreciation, energy costs, skills and the cost of doing nothing. And it's easy to underestimate the ongoing costs of cloud services as usage ramps up.
While vendors typically make it easy and cheap for customers to get on board, some of our respondents complained of facing additional costs when it came to adding new services. Some vendors, in particular, seem to be taking their on-premises pricing strategies and transferring them to cloud. "With Oracle, every little extra thing you want gets charged more," said the CIO in research.
It's not just that vendor of course. Cloud is full of price traps that can snare the unwary. For most organisations any savings will be small if they are realised at all.
Scalability and availability
While cost savings might be moot, most organisations would agree that availability and scalability can both be enhanced by moving services to a public cloud provider.
Cloud's scalability removes the stresses of the hardware refresh and allows for rapid expansion at times of peak demand (although care must still be taken to switch off resources again when they are no longer needed if hefty bills are to be avoided).
Improved uptime is one of the main drivers for moving services to the cloud, and the fabled always-on, responsive digital business is something that's only become possible since the arrival of the as-a-service model. But availability is still not a given. Headlines in Computing regularly feature outages in Azure, Office 365, and AWS. Moreover, aggrieved customers have sometimes found that holding providers to guarantees in the SLAs is no easy matter. Some we spoke to said the uptime figures published by cloud providers are not reliable and should certainly not be used as a core metric for comparing vendors.
"I don't take that into account because you can make the stats say what you like," said the head of IT of a firm in the leisure sector.
Nevertheless, it's true to say that most organisations would be very hard-pressed to match the capabilities of the cloud providers in either of these areas.
Security
But what about security? In the old days this was the big blocker. Businesses were genuinely worried for the safety oftheir data, and frequently with good reason: this was a new Wild West, and security was second to getting customers through the door. Such fears have largely subsided now. Our survey respondents gave the security credentials of their cloud providers six out of a possible seven. Industry standard provision for security is now seen as a given and is therefore less of a differentiator between vendors. It's the suppliers' game to lose.
"It's not that security is a big plus, but poor security is a big minus," said a head of IT in retail.
Compliance
Many public cloud providers span the globe, but they have had to learn to be local too. An appropriate EU/UK focus was of high importance to our respondents, and an important factor when choosing a partner.
A multinational company may span many jurisdictions and complying with local data protection, security and privacy legislation across the piece can be a challenge. Some choose a series of local providers, but this can add management complexity. Meanwhile the global players have been building in granular controls in order to be compliant across different territories. It's not enough to simply build in tickbox controls though; providers need to make sure they stay ahead of any changes in the legislation.
"Where data resides is highly important, but also having an awareness of local law is equally important," said a head of IT in the public sector.
In the run-up to GDPR global cloud providers busied themselves building new data centres in Europe. Most if not all of the big providers now offer geo-restricted regions to ensure the customer's data never leaves Europe.
Interestingly, concern over the impact of GDPR had grown somewhat since a year ago, when the legislation was still pending. As was reported many times, many organisations were still not fully prepared when the legislation was introduced and it may be that the implications have only just sunk in.
Skills
An essential consideration when adopting cloud, and particularly when considering a multi-cloud approach, is the availability of the right skills. Those with expertise in DevOps, analytics and distributed systems can be hard to find, as can those experienced in managing suppliers. Our survey picked up a number of areas in which organisations were struggling to recruit or upskill staff - including fostering end-user adoption and project management.
On the technical side, developers and technicians need to be able to keep up with the rapid rate of change. With new tools arriving all the time and the half-life of some new technologies measured in months, change is the only constant.
"It's moving too fast, we're getting further away," complained one respondent.
Cloud is often a precursor to new ways of working, and as we all know, rapid change is likely to be met with resistance, particularly among those who feel it is being imposed against their will.
"Our biggest problem is with end-user adoption - it is often a challenge for people to understand new concepts and they can be quick to condemn a new direction the first sign of a perceived issue," said one IT leader.
To ensure that these natural, very human fears don't amount to a roadblock, strong leadership is essential to drive the change and smooth the path to adoption. Without sustained commitment from the top, major strategic change in unlikely to work.
Where cloud is a mainstay of software development, as it is for an increasing number of firms, the rapid pace of change and ever increasing number and variety of cloud tools and services can lead to a ‘kid in a sweetshop' phenomenon with teams constantly trialling the new and shiny instead of making a decision and running with it.
The major players
One of the changes we are seeing is increased dominance by a handful of cloud giants. Amazon was the first of these investing vast sums in becoming the cloud leader with AWS. However, Microsoft is now catching up, according to many observers. While this is not as large as AWS, Azure has one big advantage: Microsoft's substantial foothold in the enterprise.
"The majority of our activity is on Microsoft Azure, and that's because we work with Office 365," said a CIO in higher education.
Google has a similar advantage of familiarity through Google Docs, although it is much smaller in terms of its platform and infrastructure customers.
Where AWS still has an advantage is with developers. As a prime mover with open source, has retrained its reputation for innovation.
"When you look at AWS it's massive, it's very sophisticated, and it's got loads and loads of different products. They pride themselves on how many new products they bring to market every year," said the CIO in higher education.
In fact, we may be looking at a situation in which we have a technology duopoly developing, with others forced into niches, or dropping out of the race altogether, as happened in mobile with Windows Mobile and Firefox OS. Of course, we shouldn't underestimate new players coming along, particularly Alibaba Cloud - although we didn't find much production use of Alibaba as yet in our research.
The third place is between IBM and Google. Google has the money, the processing power, AI expertise, political clout, and brand recognition, but it lacks the enterprise presence of a Microsoft or an IBM. The people we spoke to was surprisingly down on Google. "I don't think Google has ever really cracked the medium-large business approach," said one interviewee.
The other third-place contender, IBM, has a large installed base but failed to raise much excitement among those we spoke to.
"Even if you're a dyed-in-the-wool IBM shop if you look at what IBM has versus what Amazon and Microsoft have got, you're not going to stick with IBM for long", said a chief architect in the technology sector.
So it seems we are looking at a market dominated by two or at the most three big players. But as applications and data grow more platform agnostic does that make much of a difference? Well yes, as levels of access, service and sector specialisations still vary widely. So choosing wisely is as important as it ever was.
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