If you have had to work from home at any point during the pandemic, you probably know the instrumental role cloud computing has played as a key component of the world’s technical response to the COVID-19 pandemic. During the pandemic, leading public cloud providers recorded significant revenue growth ahead of earlier projections as businesses all over the globe transitioned to remote employee working.
With the effects of the COVID-19 crisis still being felt throughout the global economy, the rest of this article aims to present further cloud computing-related predictions to be expected in 2021.
Cloud computing is the new normal
The world will continue to rely on the cloud (including streaming, remote collaboration, smart sensors, and other cloud-reliant digital technologies) in its emergence from the pandemic and beyond. Enterprise technology service providers will adjust their cloud strategy in line with COVID-19 trends and digital transformation initiatives. Technology vendors most likely to see the biggest gains include Amazon, Google, and Microsoft – with the provision of full, cloud-to-edge ecosystems which enable seamless “new normal” lifestyles.
Increased dominance of public clouds
Public cloud service providers reported faster growth during the pandemic. According to IDC, public and private enterprise cloud spend increased by 34.4% from the previous year, while non-cloud-related IT spend declined by 8%.
Leading public cloud platforms (Amazon Web Services, Microsoft Azure, Google Cloud etc) will retain their dominance in the industry and expand their reach horizontally across various sectors of the global economy. AWS will retain its leading market share, while Microsoft, Google, and Alibaba will continue to attempt to close the gap. The next mid-decade will continue to see revenue growth, never dipping below 30% annually according to Deloitte’s projections. Global spend on public cloud services and infrastructure will grow 7 times faster than overall IT spend through this period, reaching $500 billion by 2023 according to IDC.
Hybrid and multicloud strategies will be used to mitigate cloud “lock-in”
In the last year, the increasing dominance of public clouds drove traditional enterprise computing firms to shift their strategic focus towards hybrid and multicloud strategies. In 2021, enterprises will aim to reduce their reliance on top-tier providers, seeking out hybrid and multicloud tools to reduce the risk of being locked into specific providers. This practice is already going mainstream considering Flexera’s estimation that 93% of enterprises use a multicloud strategy, while 87% use a hybrid cloud strategy.
In the future, the growing maturity of hybrid/multicloud offerings from AWS, Microsoft, and Google will compel enterprise cloud managers to increase their spend with these providers. Private-cloud stalwarts on the other hand (IBM, Hewlett Packard Enterprise, Cisco, Dell EMC, VMware etc) will continue to increase their hybrid/multicloud integrations with dominant public cloud services in a bid to defend their enterprise IT market share.
This might evolve into a war of attrition as hybrid cloud appliances (AWS Outposts, Google Anthos e.g) will not boost vendors’ shares in their core public cloud market segments.
The ‘Platform as a Service’ (PaaS) market will grow
In response to the global shift towards remote working, SaaS providers (Oracle, SAP, Salesforce etc) offered backbone platforms which supported the continuation of business throughout the disruption.
As remote working prevails through the pandemic, SaaS providers of all sorts will see significant growth. Gartner projects that SaaS will remain the dominant cloud market segment by revenue, growing to $117.7 billion by the end of 2021. PaaS-based application services will see even greater growth, driven by enterprise customers’ increasing reliance on cloud-native, containerized, and serverless cloud platforms.
Multicloud serverless offerings (Vendia, Microsoft, Red Hat etc) are predicted to dominate the biggest PaaS growth segments in 2021. These offerings, combined with associated low-code platforms will feature in the essential stack of more enterprise application modernization, digital transformation, and business continuity strategies.
Intelligent edge will become the principal cloud on-ramp
The global shift to remote working in the past year triggered a boom in mobile technology, AI (artificial intelligence)-powered automation, autonomous robotics, and industrial IoT (Internet of Things) platforms.
The next year will see public cloud providers shift significant portions of their workload towards intelligent-edge platforms, in a bid to deliver the low latencies required by these applications. According to projections by Frost & Sullivan, approximately 90% of industrial enterprises will use edge computing over the next year, with the demand for cloud-to-edge applications skyrocketing as 5G continues to be rolled out across the globe. More of these workloads are also projected to implement edge-based, AI-driven processing of smart sensor data as well as Tiny ML (machine learning) workloads.
In 2021, IBM/Red Hat, Hewlett Packard Enterprise, and Microsoft will make significant investments in their in-house strategic 5G/edge/AI platforms launched in 2020. Nvidia will automate the delivery of AI apps to cloud-to-edge and hybrid-cloud environments by leveraging its Arm acquisition. This will fuel the demand for software-defined wide area networks to the benefit of VMware, Cisco, Juniper, Arista, and other vendors within this space.
Big Tech will gravitate towards open partner ecosystems in response to regulatory pressure
Towards the end of 2020, Amazon, Microsoft, Google, and other Big Tech companies faced legislative pressure requesting for dismantlement, due to anti-competitive practices. This will define strategic acquisitions in the next year, with these major and other dominant cloud providers slowing down on their strategic acquisitions, while shifting towards open partner ecosystems. Going forward, large cloud providers will position their offerings as back-end fulfilment within partner-led enterprise deals in a bid to downplay the effort of using multicloud and hybrid cloud solutions to migrate enterprise workload from legacy, on-site platforms.
Cloud talent will be trained using augmented reality
On the part of professionals working within the cloud space, enterprises will adopt augmented reality tools to offer training and guidance to distributed cloud technical staff.
As with all businesses, there is a need to ensure that safety, health and productivity of employees remain paramount within socially-distanced work environments. This calls for an innovative approach such as augmented reality, to facilitate training at scale. This way, large players (such as Amazon) can deliver on their attempts to train 29 million people worldwide to work in cloud computing. Under the best of conditions, training at this scale would be impractical to conduct in-person so it is evident that the cloud computing industry’s biggest challenge is finding, training and equipping enough skilled people to support businesses digital transformation initiatives.