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Has Cloud Computing Lived Up to the Hype?

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There’s been no lack of cloud computing hype. At all.

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Back in 2010 and 2011, predictions about the glorious future of cloud computing dominated headlines. Analysts were heralding the arrival of cloud computing as the best thing to happen to technology since the invention of the PC. And everyone had their own opinions about how the market would shape out.

In the intervening years, cloud computing has indeed become a force to be reckoned with. For many enterprises, the cloud is now the default for deploying new applications and services.

But did analysts’ original predictions about cloud computing come true?

Here are eight cloud predictions analysts were making six or seven years ago. Some of them came to fruition — at least partially — but others were completely wrong.

Prediction 1: Rapid Growth in Cloud Computing Spending

In 2010 and 2011, all the major market research firms were predicting rapid increases in cloud spending. For example, in 2012, Forrester predicted that total public cloud spending would reach $159.3 billion by 2020.

But that estimate was way off — not because analysts overestimated cloud computing’s growth, but because they underestimated it.

Forrester has revised its cloud predictions several times since that 2012 report. Most recently, it issued a forecast in September 2016 that said public cloud revenues would top $236 billion in 2020 due to “faster-than-expected growth.”

Gartner has even higher numbers for public cloud revenue. According to an October 2017 Gartner report , the public cloud services market was worth $219.6 billion in 2016 and will likely exceed $260.2 billion in 2017.

No matter whose numbers you believe, the growth of public cloud revenues has clearly exceeded expectations. And in this case, the cloud more than lived up to the hype.

Prediction 2: Non-IT Companies Would Enter the Cloud Services Market

Five or six years ago, a number of “experts” were predicting that non-technology companies would start to offer cloud computing services and might even become major players in the space. Datamation ran an article titled Where Will You Shop for Cloud Computing Services? that theorized that Best Buy and other big box retailers would become cloud providers.

Clearly, this is one area where the experts missed the mark.

Best Buy does not offer cloud computing services today (although it is happy to sell a sizable number of “cloud-ready” devices). Instead, Amazon and large technology companies dominate the cloud market. An October 2017 report from Synergy Research finds that Amazon Web Services (AWS) had more than a third of the public IaaS, PaaS and hosted private cloud market, while Microsoft, IBM, Google and Alibaba trailed. No big box retailers made the report.

Prediction 3: Private Cloud Would Be More Popular Than Public Cloud

In the early days of the cloud, many analysts believed that enterprises would embrace the private cloud but would be far more leery of trusting sensitive information to the public cloud. In fact, a Datamation story titled Three Myths About Cloud Computing said, “Private cloud infrastructures will be far more popular [than public cloud] – more than a quarter of the average organization’s IT resources will be based on some sort of private cloud implementation.”

So did this prediction come true?

It’s not entirely clear. Organizations did invest heavily in private clouds, but recently private cloud investment has slowed while public cloud investment is rising rapidly. The RightScale 2017 State of the Cloud Report found that among all organizations surveyed, 41 percent of workloads were running in the public cloud and 38 percent were in private clouds. But within enterprises, those figures were somewhat different: 32 percent of workloads were in the public cloud and 43 percent were in the private cloud.

The answer may be that for certain users, the private cloud was more popular for a time, but the public cloud became more important in the long run. Ultimately, the public vs. private debate may become moot as more organizations move toward hybrid clouds and multi-cloud environments.

Prediction 4: People Will Stop Buying PCs

Another common belief back in the early days of cloud computing was that the new model would cause people to stop buying PCs. A Datamation article on 5 Cloud Computing Predictions for 2011 said, “The rise of cloud computing and smartphones threatens the PC.” It also quoted Mary Meeker’s prediction that mobile Internet traffic would overtake desktop Internet traffic.

This prediction turned out to be partially true.

2017 data shows that mobile Internet traffic now accounts for about 53 percent of total Internet traffic, meaning that Mary Meeker was right.

In addition, sales of PCs have declined. Back in 2011, second quarter PC shipments totaled 85.2 million units, according to Gartner data. By comparison, Gartner said that PC sales in the second quarter of this year were 61.1 million units. It added, “The PC industry is in the midst of a 5 year slump, and this is the 11th straight quarter of declining shipments. Shipments in the second quarter of this year were the lowest quarter volume since 2007.”

Still, those shipment numbers are higher than some analysts would have predicted back in 2011. So while cloud computing may have led to declining PC sales, people haven’t stopped buying PCs.

Prediction 5: Tablets and Thin Clients Would Become Much More Popular

In 2011, many analysts believed that cloud computing would encourage people to buy tablets and thin clients instead of PCs. That Datamation article with cloud computing predictions quoted Jeff McNaught, chief marketing and strategy officer for Wyse, who said, “Today, 90 percent of individuals are accessing their computing infrastructure via PCs and 10 percent are accessing via a widely dispersed combination of virtual desktops, cloud PCs, zero clients and more. In less than 10 years, I expect that ratio to be reversed.”

But while tablets, especially the iPad, experienced an initial surge in sales, tablet purchases have been declining in recent years. IDC’s Worldwide Quarterly Tablet Tracker from the second quarter of 2017 found that tablet shipments declined 3.4 percent year over year. And the analyst firm characterized the market as being in a “downward spiral.”

Thin clients haven’t really taken off either. As PCs have become more affordable, the price advantage for thin clients is fairly slim, making them less attractive. And instead of traditional thin clients, some enterprises, especially those that use Google’s cloud services, are instead purchasing Chromebooks for employees.

So while sales of PCs declined as cloud computing became more popular, sales of tablets and thin clients haven’t increased to the extent that many analysts predicted. Instead, much of the money that might otherwise have been spent on PCs is likely going to smartphones, particularly as phone screen sizes have increased.

Prediction 6: The Emergence of Sky Computing

A 2010 Datamation article on 7 Hot Cloud Computing Innovations mentioned a term that hasn’t been heard in a while: sky computing. The article explained that sky computing would link multiple clouds together.” This model “takes resources from multiple cloud providers and pools them to create large-scale, distributed infrastructures,” it said.

A quick Google search for “sky computing” reveals that while this was a popular idea in academic circles around 2009 and 2010, the term “sky computing” never really became popular.

On the other hand, this prediction wasn’t entirely wrong. Multi-cloud and hybrid cloud environments are becoming the norm. However, these aren’t exactly the same as the sky computing that computer science researchers envisioned.

Prediction 7: Open Source Would Be Important to the Cloud

A 2010 Datamation article on 10 Disruptive Cloud Computing Trends was far more accurate when it predicted growing importance for open source in the cloud. It anticipated that companies would turn to open source cloud solutions in order to protect themselves against vendor lock-in, and it mentioned OpenStack as being an important young open source cloud initiative.

In this case, the hype was certainly true. Open source technologies, such as Linux and open source databases, are a key part of the cloud offerings for all the major service vendors. OpenStack has experienced rapid growth, and is now supported by more than 672 companies. In addition, some surveys show that as many as 82 percent of enterprises are either already using OpenStack or plan to do so in the future.

Prediction 8: Amazon Web Services Might Not Be Ready for Primetime

While it had an early lead and helped define the cloud computing market, seven or eight years ago, some pundits publicly wondered whether Amazon Web Services had what it would take to hold onto that lead. In a Datamation article titled Cloud Computing: Amazon’s Cloud Future, one researcher characterized AWS as an “accidental empire.” Another said, “Amazon needs to decide whether cloud computing is a hobby or a business,” and he questioned whether the service was truly enterprise-ready.

The article also noted that the young cloud services company faced a lot of competition from large technology companies like Microsoft, Google, Oracle and IBM, as well as many new startups.

For its part, Amazon took issue with the critics and vehemently defended its business model. “We think that people are choosing to use the cloud because they’ve found building their own reliable infrastructure difficult, expensive, and in the end, well, unreliable,” said a company spokesperson.

And AWS has proven its critics wrong. As mentioned previously, Synergy Research has found that Amazon dominates the cloud and “remains bigger than its next five largest competitors combined.” The company is also increasing its market share, which is difficult when a company already has such a large slice of the market.

What’s Next for Cloud Computing?

Overall, the cloud does seem to have lived up to the early hype.

While analysts got some of the specifics wrong, the cloud computing market has grown incredibly rapidly. Today, nearly all organizations run at least some workloads in the cloud.

So what’s next for the cloud?

The analyst firms are predicting continued strong growth for the public cloud market. Gartner says the total public cloud market will likely be worth $411.4 billion by 2020. “As of 2016, approximately 17 percent of the total market revenue for infrastructure, middleware, application and business process services had shifted to cloud,” said Sid Nag, research director at Gartner. “Through 2021, this will increase to approximately 28 percent.”

The firm also expects the current market leaders, including Amazon, to continue their strong performance.

Experts also suggest that hybrid cloud and multi-cloud environments will continue to grow. And they point to artificial intelligence as a key battleground for cloud vendors.

Perhaps in another six or seven years, we’ll write another article looking back on those predictions and evaluating whether or not they have come true.

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