2018: Another Huge Year for the Cloud

Wednesday, January 03rd 2018 by Kirill Bensonoff

As featured in Huffington Post - What You Need to Know in 2017

2017 has certainly shown us all that the growth of cloud computing shows no signs of stopping. The big players kept getting bigger while some new companies entered the market, but no one’s worried because there’s more than enough pie to go around. Looking ahead to 2018, the growth will continue, but some new wrinkles will impact the MSP market.

At a high level, the total public cloud market is expected to reach $178 billion in 2018 – up $32 billion from 2017 – and continue a 22% compound annual growth rate. Half of all enterprises will have at least some of their systems running on public cloud platforms, which are responsible for $44 billion of that 2018 total.

Thanks to multi-cloud strategies and overall growth, the big platforms will keep getting bigger in 2018, as AWS, Google and Microsoft will combine for a 76% share of the cloud platform revenue… a share that’s expected to grow to 80% by 2020. That might lead to Facebook, Salesforce, Oracle and IBM rethinking their approaches.

As some SaaS companies give up their dreams of growing into full-fledged cloud computing platforms, you can expect to see more “preferred provider” arrangements pop up, similar to the Adobe Systems-Microsoft deal. This could lead to customers preferring specific cloud platforms based on the apps they want to run because those apps are “optimized” for a given platform.

Cloud Dominance Continues

Cloud data centers will shoulder 78 percent of the 8.6 zettabytes of total data center traffic in 2018, with 31 percent of cloud workloads occurring in public clouds versus private.

Cisco expects the amount of cloud storage to double in 2018, reaching 1.1 zettabytes, spurring even more big data processes to shift to the cloud.

The More the Merrier

Multi-cloud and hybrid cloud strategies are poised for growth in 2018 as well. Microsoft’s Azure Stack is leading the hybrid charge with private cloud platforms that mirror their cloud counterparts, but AWS is leveraging its new partnership with VMware to catch up (as is Google). Meanwhile, multi-cloud optimization combined with continually dropping prices has firms cherry-picking their cloud opportunities for specific apps and processes to maximize performance and cost efficiency.

As firms realize their own data center workloads are lightening from using third-party SaaS solutions for CRM and productivity applications, they’ll be increasingly inclined to identify other functions they can offload to hosted solutions. They’ll also be looking for help transitioning on-premises systems to the cloud, a business that netted IBM alone $7 billion in 2017.

IT departments themselves will continue to see a transformation, as IT specialist hiring is expected to drop 5% by 2019. Instead, hiring managers will be seeking “versatilists” that can handle multiple functions, allowing teams to be more nimble and cost efficient.

Technology Trends

Edge computing may create some fundamental challenges for typically centralized cloud computing in 2018. With 50 billion IoT devices expected by 2020, the distribution of computing power is inevitable as is the need for high latency, low spectral efficiency and non-adaptive communication. There’s even a new movement dubbed “fog computing” that favors the low latency of computing nearer to the source instead of totally centralized clouds. IDC predicts by 2021 we’ll be looking at a cloud ecosystem that is “20 percent at the edge, over 15 percent specialized compute, and over 90 percent multi-cloud.”

Kubernetes has been declared the unquestioned victor in the container orchestration race, and even Docker is supporting it now. With the techies on board, it’s only a matter of time before enterprises start adopting this technology (and MSPs start supporting it).

Industry collaborative clouds are also positioned for rapid growth in 2018, with the 150 existing ones already generating $1 billion in revenue. These clouds are specially designed and tuned for the needs of the industries they serve, and they’re becoming attractive in highly regulated industries and those with specific security requirements. MSPs can create opportunities for themselves by creating and managing these clouds, which also positions themselves to serve the individual companies participating in them.

Security & Regulation

Speaking of regulation, the European Union’s General Data Protection Regulation (GDPR) goes into effect in May of 2018. Kind of like a corporate Freedom of Information Act, this regulation updates what consumers can request from companies regarding their personal information. Compliance is not only mandatory for companies located in the EU, it also applies to companies doing business with or even monitoring the behavior of individuals in the EU… so pretty much everyone.

In practical terms, this regulation applies to nearly every business managing or processing personal data regardless of their physical location, and unprepared companies will be facing an expensive wakeup call if they don’t comply. MSPs will undoubtedly feel the effects of this new legislation and should do their research before it goes live in May.

The focus on security raised by both regulations and responding to the increasing number of hacks and data thefts could also spur the convergence of MSPs and MSSPs as companies look to outsource security expertise they simply can’t manage themselves.

Blockchain technology will also see wider adoption as firms gravitate toward it for smart secure contracts. Not only are banks moving trillions of dollars to them, but firms like IBM and Microsoft are bringing mainstream enterprise customers outside of finance into the blockchain fold. It’s still early days, but there’s unquestionable momentum toward this technology moving into 2018.

Now that we have turned the calendar to 2018, it’s clear there’s more opportunity than ever for MSPs to help customers migrate to the cloud and take advantage of all there is to offer. It’s also clear that MSPs need the right tools to scale their operations to meet this growing demand. Find out how Unigma can help your business prepare for the future and schedule a demo today.




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