Around this time last year, Forrester published its predictions for what we expected to happen in the cloud computing market in 2011. While some of those prognostications were on the mark, in general we learned once again that markets move much slower than any of us would like.
It might be best to think of last year’s predictions as less about what would happen in a twelve month period and more about trends we identified that we felt would have lasting impact on the infrastructure & operations (I&O) professional and the market in general. Thus we felt progress was made along most of these lines. Here's a quick look at what we predicted and where we went astray:
1. And The Empowered Shall Lead Us. Correct. Forrsights surveys and discussions with clients continue to show that the early adopters of cloud services are not I&O, and this gap rose in 2011. And the trend of Empowered employees and developers not telling I&O about their use of cloud continued in 2011. Thankfully we saw more I&O leaders begin to proactively engage these leaders by demonstrating how I&O can make their use of these services more predictable and productive. Far more of this type of engagement is still needed as the pressure on business to move more quickly and autonomously grows as the risk of a double-dip recession rises.
2. You will build a private cloud, and it will fail. Incomplete. While tough for many I&O leaders to hear, the rush to private cloud led in 2011 to far fewer cloud implementations than we would liked to have seen. Which means that little progress was made toward private clouds last year. What took its place, sadly, was a lot of cloudwashing of virtualization environments. Forrsights surveys showed an increase in pressure from executives for I&O to get to yes on cloud, but as we’ve pointed out in our research, the administrative maturity required to build and operate a private cloud is daunting for most IT teams. The vendor community made good strides in 2011 in providing cloud solutions for you to deploy, but it seems this learning for most enterprises was pushed out until next year.
3. Hosted private clouds will outnumber internal clouds 3:1. Wrong. Having a managed service provider (MSP) set up and operate an infrastructure-as-service (IaaS) cloud for you remains the fastest path to private cloud yet fewer enterprises went for this value proposition than we thought. The psychology of I&O explains this. For most I&O professionals the desire to do it yourself was behind most of this, as outsourcing an important innovation, for many, seemed to indicate an internal failure. “If we can’t get this built in our own environment, we’ll explore that option but I want to give my team a chance first,” said one I&O leader from a large manufacturer. A second factor is the continuing mistrust of third parties by both I&O and security & risk managers (SRM). While hosted private clouds from most MSPs are dedicated implementations, IT continues to show mistrust of multitenancy. Look for a Forrester report on the truth about this risk this winter.
4. Community clouds will arrive, thanks to compliance. Incomplete. While some progress was made here by the financial services market, education and public sectors, community clouds are still a work in progress. A key issue holding back this market is ownership and responsibility. In nearly any community one member must ultimately take responsibility for the cloud provided. It has to reside somewhere and someone has to administer the cloud. That party has the burden of operational transparency to the rest of the community and bears the ultimate cost of the cloud. Thus the business justification for this effort falls unevenly upon this member. As a result, so far, community clouds have been built mostly as commercial enterprises benefitting the lead member or extensions of private clouds built for the benefit of the administering leader. NYSE Euronext’s community cloud is a poster child for this reality. While the solution clearly serves the financial services market, it’s ultimately a business for NYSE's I&O team.
5. Workstation applications will bring high-performance computing (HPC) to the masses. Incomplete. It took nearly all of 2011 for this trend to reach the market, but Adobe and early leader Autodesk made this a reality last quarter with the announcement of cloud solutions that now power their leading workstation applications. New Zealand-based App-Internet pioneer Green Button added a raft of workstation and desktop ISVs including Pixar, Blender, AON, Deep Exploration, SymScape and RiskMetrics. While this progress is great, mass adoption remains a bit off.
6. Cloud economics gets switched on. Being cheap is good. Incomplete. In 2010 we were just learning about the economic differences cloud platforms brought to the I&O market. In 2011, Netflix very publicly showed their deep understanding of this new model and how they were capitalizing on it. The Associated Press, NVoicePay, Heroku and many others have latched onto this new economics and driven innovative new business models to the market. But some of the innovations we expected to see such as a real spot market for cloud resources, simple cross cloud deployment and hybrid architectures built on financial justifications are still a work in progress. Much of this change was held up by cloud standards (prediction No. 9), so we should have known better.
7. The BI gap will widen. Correct. It’s hard to argue with the growth and power of big data and the role cloud computing is playing in this trend. Real-time analytics, social media analysis and gleaning business value from unstructured data are big advantages for first movers. Hadoop and the other tools for making this happen are clearly far from mainstream, but those investing in these technologies are already reaping the benefits.
8. Information is power and a new profit center. Incomplete. Amazon, Microsoft, Google and innovative ISVs like Xignite are laying the foundation for commercializing your corporate data, and social media, web services and traditional information providers are all over this trend. But the traditional enterprise has been slow to move into this business. Partly a lack of standards is to blame, but more of an issue has been data security concerns. Your precious corporate data about inventory flows, retail purchases, buyer categorizations and other data that may be of immense value to partners and potential partners but remains stuck in the bowels of your ERP system hidden far behind the firewall. Securely sharing this remains a challenge as the market debates the best practices. Snapshotting and obfuscating is one approach but designing an API to this data may be ultimately more secure and flexible. The e-commerce of commercial data looks to be a multi-year problem. Hopefully the revenue realities will push corporate IT forward in 2012.
9. Cloud standards still won’t be here — get over it. Correct. Anyone who studies standards efforts can tell you this prediction was a layup, but the latter half of this prediction required a shift in IT thinking. Let’s face it, I&O professionals are not natural risk-takers. And lack of standards held many an IT team back from investing in cloud in 2011. Forrsights surveys showed that little progress was made by I&O in cloud services in 2011. But it was the developers who pushed us forward – our software surveys showed a doubling in developer adoption of cloud in the past year. As for the standards, I wouldn’t hold my breath for 2012 either. For a look at where we are towards this aim, see Lauren Nelson’s forthcoming report on cloud standards.
10. Cloud security will be proven but not by providers alone. Correct. Now get going. Sure we can’t ensure every application or data set in the cloud, but 2011 gave us real proof that at least the providers are doing their part. The leading cloud providers earned key certifications (ISO 27001, 20001, PCI-DSS and FISMA) and nearly all provided strong transparency to their operational practices. We also saw the leading clouds land local data centers in Europe and Asia and validate the proper handling of in-country data. And for the most part we saw enterprise customers awaken to their responsibilities for securing their use of clouds. There’s much progress to be made for sure, but the excuses for not leaving the starting gate are no more.
With so much progress, it’s getting increasingly difficult to argue for holding back from cloud investments. Even highly regulated industries are showing clear cases for cloud use in the areas of training, marketing, social outreach, support and product or service design. For sure, it's still an early market, but as our forthcoming updated Tech Radar for the cloud market shows, 2011 was a year of tremendous progress. The best practices for cloud adoption are out there if you look for them. Forrester is proud to be a leading resource for this. It’s time to take your adoption plans and put them into practice in 2012.