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Cloud computing is, to be sure, today's leading driver of emerging tech.The next big battles among the public cloud vendors will center around emerging technologies like artificial intelligence, the Internet of Things, virtual reality and blockchain.
By now, most enterprise leaders understand the value of cloud computing. They have experimented with software as a service (SaaS), infrastructure as a service (IaaS) and platform as a service (PaaS), and now they are looking to expand their use of the cloud. Synergy Research recently found that the public cloud market is growing 40 percent per year. And IDC has predicted that by 2020, 67 percent of IT infrastructure and software will be based in the cloud.
But as organizations expand their use of the public cloud, they are asking for more than just the traditional SaaS, IaaS and PaaS offerings. They are looking to cloud vendors to help them keep up with the ever-increasing pace of technological change. As Gartner's Daryl Plummer explained in a blog post, "Technology-based innovation is arriving faster than most organizations can keep up with. Before one innovation is implemented, two others arrive."
IT leaders know that emerging technologies could provide opportunities for them to launch new products, find new markets, improve their customer experience and ultimately become more profitable. But because the technology is changing so quickly, they will need help to leverage these new advances.
And cloud vendors are rushing to fill that need with new services related to artificial intelligence (AI), the Internet of Things (IoT), virtual reality (VR) and blockchain.
The Cloud and AI
In many ways, cloud computing and AI seem like a perfect match – cloud, clearly enables AI.
AI and machine learning applications require high-end infrastructure with fast processors, state of the art GPUs, lots of memory and access to vast amounts of storage. But they don't need those computing resources all the time. AI and machine learning workloads are "bursty," meaning they are very intense but don't last very long."
These requirements line up almost perfectly with the benefits offered by the cloud. Public cloud services allow organizations to access these high-end computing resources but pay only for the amount of time that they need them.
Sensing an opportunity, all of the major cloud vendors are investing heavily in AI and machine learning research. They have all rolled out AI services related to analytics, natural language processing and image recognition, and they continue to expand their capabilities. In the coming year, look for this cloud AI trend to accelerate.
In a 2017 report, Canalys Research said that in the past, public cloud growth "was driven by demand for primary cloud infrastructure services, such as on-demand computing and storage, across all customer segments and industries. But future growth will be fueled by customers using the artificial intelligence (AI) platforms cloud service providers are building to develop new applications, processes, services and user experiences."
The Cloud and IoT
Many of those cloud-based AI applications will be analyzing data from another area of emerging technology — IoT. According to IDC, "By 2019. . . 100 percent of IoT initiatives will be supported by AI capabilities," and "by 2020, IoT technology will be in 95 percent of electronics for new product designs."
As organizations deploy fleets of IoT sensors and devices, they need analytics tools to help them make sense of that data.
They will likely transmit at least some of that data to the cloud for analysis. And as with AI, the leading public cloud vendors have launched IoT-related services to help with that process.
However, a competing and complementary technology — edge computing —will likely handle some of the burden. In fact, Gartner's Tom Bittman has said, "The edge will eat the cloud."
Edge computing involves doing data processing and analytics either on or very close to the devices where it is generated. As edge computing evolves, devices at the edge of the network will become smarter and faster, and they will handle at least some of the computing burden that might otherwise occur in the cloud. According to Bittman, "The cloud will have its role, but the edge is coming, and it's going to be big."
For cloud vendors, the race is on to develop an IoT strategy that takes advantage of the unique strengths of the cloud and the edge and allows the two to integrate and support each other.
The Cloud and VR/AR/MR
That tension between cloud computing and edge computing also exists in virtual reality (VR) and the related fields of augmented reality (AR) and mixed reality (MR). According to IDC, 30 percent of consumer-facing G2000 companies are already experimenting with these technologies this year, and next year AR mobile apps will likely have more than 400 million users.
Like AI, the new VR, AR and MR technologies require massive computing power, particularly graphics processing capabilities. But unlike AI applications, these immersive reality applications need lots of processing power over an extended period of time, and latency caused by waiting for data to be sent from the cloud to the edge device can make the experience less enjoyable.
Clearly, edge devices like smartphones and VR headsets will need to handle much of the computing work for VR/AR/MR applications. But that doesn't mean the cloud won't have a role in the development and hosting of these applications.
Most of the leading public vendors don't have specific services targeted at the VR market today. However, their existing cloud development and infrastructure services easily serve as a platform for VR/AR/MR applications. For example, Oracle Cloud has demonstrated an industrial VR use case that uses its cloud computing and IoT services.
As VR and AR applications become more popular, this will likely become another area of intense competition for public cloud vendors.
The Cloud and Blockchain
Consumers might not be as familiar with blockchain as with the other emerging technologies like AI, IoT and VR, but the enterprise is taking notice. According to Gartner, "By the end of 2020, the banking industry will derive $1 billion in business value from the use of blockchain-based cryptocurrencies."
Blockchain is the secure distributed ledger technology that enables cryptocurrencies like Bitcoin, but it has many uses beyond digital currency. For example, it could manage digital copyrights, enable financial transactions without an intermediary like a bank, track supply chain information, record health histories or perhaps even slow the spread of "fake news."
Most of these uses are still a long way off, but the cloud vendors are beginning to offer blockchain services. Microsoft and IBM both have cloud blockchain services that enterprises can begin experimenting with today. Amazon doesn't have a specific blockchain service of its own right now, but it is working with partners who offer blockchain services through its Marketplace. And Google is also reportedly experimenting with blockchain, although it also does not yet offer a public blockchain service.
This emerging technology probably won't hit the mainstream as soon as the other emerging technologies discussed here. But it's clear that this too will be a key battleground for public cloud vendors.
The Future of the Cloud
Cloud computing has not only cemented its position as an important provider of infrastructure and software services to enterprises, it also looks likely to expand its role in enterprise IT as organizations investigate emerging technologies.
IDC's most recent data on the public cloud shows that the market is growing even faster than analysts had anticipated. In the first half of 2017 alone, cloud computing revenues climbed 28.6 percent to hit $63.2 billion. Frank Gens, senior vice president and chief analyst at IDC, stated, "Public cloud adoption is accelerating in large part as enterprises recognize that the cloud has become the launchpad for virtually every new IT innovation in the last 24 months – including AI, blockchain, quantum computing and more. Organizations not on the public cloud will be increasingly isolated from the world of tech innovation."
Because they offer enterprises a way to experiment with new technology without making a large initial investment, public cloud vendors could help to increase the rate at which organizations adopt new technologies. And that, in turn, could spur more investment in cloud computing as enterprises seek to keep up with the competition.
For better or worse, a high percentage of future technological advances will take place in the cloud.