UPDATED 16:09 EST / JANUARY 15 2021

CLOUD

By 2025, the cloud will be the key driver of business innovation

Today, most organizations think of the cloud as merely a technology platform. This perspective will shift markedly by 2025. Cloud will not only be a technological approach for delivering applications but will also serve as the key driver of business innovation.

The increasingly digital enterprise depends on technology to deliver competitive services and strong customer experiences, and the cloud will be at the center of most recent and emerging technological innovations: artificial intelligence, “internet of things” services, and edge and quantum computing, to name a few.

As boards, chief executives and chief information officers expect shifts to their business models to match the rapid pace of change, few mainstream organizations will be able to do so without relying on cloud services. Thus, enterprises should expect cloud to be the pervasive style of computing over the next four years.

After all, there is no business strategy without a cloud strategy. Here are some predictions on the future of cloud that information technology leaders must consider in their digital strategies:

The future of cloud is everywhere

Nearly all companies will have a cloud-first principle by 2025 and cloud spend will surpass noncloud spend. In the Gartner 2020 Cloud End User Behavior study, for instance, nearly 70% of respondents indicated they will increase cloud spend in the next year.

Although some legacy IT such as wireless access points or mainframe computers will not move to the cloud, many other applications and workloads will be delivered via cloud, for example cloud servers, storage and networking.

Cloud will become the ubiquitous style of computing and any noncloud applications or infrastructure will be considered legacy by the time we reach 2025.  

The future of cloud is the foundation for business innovation

Cloud is already creating new business models and revenue streams. Over time, it will contribute to transforming IT departments from cost centers to enablers of digital business.

Gartner anticipates cloud enabling business innovation in three core ways:

  1. Cloud democratizes access to cutting-edge technology and will be the platform of choice for most IT services. Consumption-based pricing models and the ubiquitous availability of cloud services will provide nearly every organization with access to next-generation capabilities.
  2. Cloud will enable organizations to connect to a vast ecosystem of partners and suppliers that offer an expansive array of services.
  3. Organizations will increasingly use cloud services to create agile, innovative business designs that enhance their core competencies. Cloud provides opportunities for differentiation and serves as a foundation for all core business competencies, from customer service to manufacturing and supply chain.

Leading digital pioneers share several key strategies, and cloud is one of the common denominators for their success. They leveraged cloud services and principles to expand their services, optimize customer experiences and create and monetize new services.

In essence, these organizations evolved into platform businesses — a trend that will become increasingly common by 2025. To compete with the digital giants, enterprises must become platform businesses.

In the Gartner 2020 I&O Executive Leaders survey, respondents indicated that the two most common innovation-led investments they planned to make were public cloud infrastructure-as-a-service and software-as-a-service. Sixty-three percent of respondents said that they already achieved growth, efficiency, innovation and other CEO priorities as an outcome of adopting cloud. Simply put, innovation is in the cloud.

The future of cloud includes intentional multicloud and distributed cloud

In a 2018 Gartner survey, more than 80% of respondents indicated that their organization runs workloads in multiple clouds. Gartner characterizes this approach as unintentional multicloud.

In another Gartner study conducted in 2020, respondents were asked to identify the top reasons their organization uses multiple public clouds. They included improving availability, selecting best-of-breed capabilities and satisfying compliance requirements.

To that end, by 2025, 50% of enterprises will adopt intentional multicloud where they use cloud services from multiple public cloud providers for the same purpose (up from fewer than 10% today). This approach offers several benefits to organizations, such as reducing risk of vendor lock-in, maximizing commercial leverage and addressing broader compliance requirements.

Distributed cloud, another future-looking computing mechanism, is the distribution of public cloud services to different physical locations while operation, governance and evolution of the services remain the responsibility of the public cloud provider.

The Gartner 2020 Cloud End-User Behavior study shows more than three-quarters of respondents prefer to have cloud computing in a location of their choice. That’s why Gartner anticipates half of organizations will use distributed cloud by 2025, a substantial increase from today.

Cloud is already delivering on executives’ priorities and will become the foundation upon which IT leaders deliver on all CEO objectives. Prepare for the shift to the cloud by first ensuring strategy, architecture, security and procurement of the cloud are retained in-house, then working with IT to transform mindsets from control to adaptive cloud governance, and finally establishing a cloud center of excellence with a living cloud strategy.

Andrew Lerner is a vice president in Gartner Research covering enterprise networking with a focus on emerging technologies. Lerner covers data center networking and wide-area networking, including software-defined networking and SD-WAN. He wrote this article for SiliconANGLE.

Image: Tumisu/Pixabay

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