As we enter 2020, most large enterprises are beginning to moderate their spending on information technology. But at the same time, they’re doubling down on the emerging technologies they believe will have the most transformational effect on their business — something they’ll be stepping up throughout the New Year.

With enterprises racing to complete their digital transformations, cloud computing will continue to take market share from on-premises workloads, while Kubernetes will embed itself into everything and companies will throw more money than ever before on cybersecurity.

Those are just some of the predictions from Dave Vellante, chief analyst at SiliconANGLE sister market research firm Wikibon and co-host of SiliconANGLE’s video studio theCUBE, in his latest Breaking Analysis video.

Vellante’s predictions are based on the latest spending data from Enterprise Technology Research, which paints a picture of companies narrowing their investments in emerging technologies as they finally place their bets on those they believe will win out.

More on-premises workloads will move to the cloud

Although enterprises are beginning to moderate their spending, cloud computing will continue to steal significant market share from on-premises spending, Vellante said. While that may not be the boldest prediction, it goes against a growing narrative that the pendulum is swinging back from the cloud to on-premises workloads.

“That’s a false narrative in my opinion,” he said. “Rather, the pendulum has swung and the cloud is the underpinning of innovation.”

Vellante’s prediction is based on ten year’s worth of spending data from ETR that highlights the unstoppable growth of the cloud and gives no indication that it’s going to abate any time soon.

Even so, Vellante notes that the penetration of the cloud has become a lot more meaningful in recent years, which means any share gains it makes this year will be much more hard fought. One reason for this is that traditional on-premises vendors are likely to step up their strategies to deal with the cloudy threat, and in most cases that means a much bigger focus on multicloud management, Vellante said.

“This will be the case with Dell leveraging VMware, and in the case of IBM, it’ll try and leverage Red Hat in the multicloud game,” Vellante said. “And both IBM and Oracle will dig their heels in, get customers in a headlock and provide big financial incentives for them to use their captive clouds.”

Kubernetes will become ever-present

If we have to pick out one emerging technology that’s already made the grade, it would have to be Kubernetes, which has grown to become the most popular orchestration tool for software containers, which are used to host modern applications that can run on any computing platform.

ETR’s data shows that Kubernetes will likely continue its strong growth, to the point where it becomes embedded in almost every platform. As a result, people will soon stop thinking about Kubernetes as a separate market, similar to what happened with flash storage, Vellante said.

“Remember everyone looked at flash as this separate market,” Vellante said. “Today it’s just embedded everywhere and that’s what’s happening with Kubernetes now. So spending momentum will continue to be strong but by 2023 Kubernetes will be ubiquitous and no longer thought of as a separate entity.”

Cybersecurity spending will keep rising

Spending on cybersecurity will likely remain strong and the biggest beneficiaries will be what Vellante refers to as “four star companies,” including Microsoft Corp., Cisco Systems Inc., Palo Alto Networks Inc., Splunk Inc., Proofpoint Inc., Fortinet Inc. and CyberArk Software Ltd. Joining these will be two newer rising stars in Crowdstrike Holdings, Inc. and Okta, Inc.

The advantage of these companies is they each have extensive portfolios that enable them to bundle a wide array of security products, and that’s just what’s needed to sate the appetites of security-conscious enterprises.

“Each year we look back and say did we spend more, and are we more safe?” Vellante said. “And every year the answer is yes and no. 2020 will be no different.”

Developers will win at the edge

A lot has been said about edge computing this year, and the idea is rapidly becoming mainstream as we enter the new decade. Edge computing is all about processing information closer to where it’s generated, as opposed to sending it to a central location that can be thousands of miles away. That’s so that data, especially real-time data, does not suffer latency issues that can affect an application’s performance. In addition, companies can save money by having the processing done locally, reducing the amount of data that needs to be processed in a centralized or cloud-based location.

Interestingly, though, Vellante says the edge won’t be won by those who provide the infrastructure to make it happen, but rather by the developers making the apps designed to run there.

“Specifically, platforms like Outposts, which are essentially programmable infrastructure that bring a cloud development platform to the edge is how this space will evolve,” Vellante said. “It won’t be won by shoving traditional servers and storage boxes out to the edge. Rather, it will grow by coders being able to build new applications and workloads on top of infrastructure as code.”

Five companies to watch in 2020

Vellante also used ETR’s data to highlight five companies he thinks will make a big splash in 2020, as they’ve already displayed strong growth even as enterprises moderate their spending and move more workloads to the cloud.

They include the robotic process automation company UiPath Inc., which Vellante said will do well even in a downturn because enterprises everywhere are looking to automate more workloads as a way of saving money.

“I predict that UiPath will come out on top in this space,” Vellante said.

Also hoping for big things in 2020 are cloud-based data warehouse company Snowflake Computing Inc. and data analytics firm Databricks Inc.

“We’re seeing a new type of workload emerge in the cloud for modern analytic databases where organizations are taking all this data that they have in the cloud,” Vellante said. “And then they’re structuring it within a Snowflake database and bringing Databricks’ tooling to the equation to be able to query and visualize the data in real time.”

The analyst also predicts good things for HashiCorp Inc., which provides open source tools for developers that helps them to simplify application deployments.

“Hashicorp is capitalizing on the trend toward cloud native computing,” Vellante said. “It has has raised about $174 million in venture capital and as you can see it has very strong spending momentum in the ETR data set.”

One last company to watch is the cloud data management and enterprise backup company Rubrik Inc., which Vellante noted has been a consistent strong performer in ETR’s data set over the previous couple of years.

“They are trying to transform backup into a data management discipline,” Vellante said. “They compete with the established players in data protection like Veritas, Dell EMC, IBM and Commvault.”

Here are Vellante’s predictions in full:

Photo: Pxhere