A THREE-PART SERIES ON CLOUD COMPUTING - PART IIIb: Change Can Be A Good Thing

Another Cloud Computing Forecast

What is to become of the boom in the hybrid cloud model (combining private and public cloud deployment models to accommodate specific needs)? Let’s consider what we mean by hybrid. I believe we will see a speedy evolution of the definition and reality we now think of as ‘hybrid cloud’.  

The public cloud (driven by CSPs with the capital and know-how) will continue to evolve. New specialized technology firms will enter the market, funded by all flavors of investment because of their synergies with the larger CSPs. The public cloud will evolve into what looks like the “hybrid model” now but instead of private – public configurations, the public cloud will include under its umbrella the edge computing segment, with localized, smaller data centers and computing environments designed, developed, and supported by the CSPs and new market players. This is more akin to the power utility model with local service providers supporting the tailored needs of different industries, market segments, and individual organizations. Such an evolution is more consistent with how markets evolve, generally. This model will be able to solve for any perceived gaps in capabilities, coverage, and performance degradation created by the explosion of devices connected to the IoT – e.g., edge computing.

Why?

In this world of swirl, disruption, and blurred lines separating fact from opinion, it is important to remain clear-eyed and focused on the path you’re currently traveling and where you are heading. It is equally important to continuously ask yourself “why.” 

There is an inherent challenge in forming an optimal cloud strategy and approach from a fresh perspective.  The answers to questions around “what” cloud deployment and service models make sense and “how” to assemble the seemingly infinite Lego pieces to create the optimal solution are relevant – sort of.  In this context, what and how are addressed in the now – they are only relevant as a snapshot in time.  This perspective fails to see and consider the on-going, continuously changing digital ecosystem in which your business now exists and must continuously adapt to survive and thrive.  

The Power Of Why

The question to ask first is “why:” why are you thinking about embarking on an initiative, filled with uncertainty, to migrate your technology infrastructure, data, features, and functions (collectively workloads) to the cloud? The answer to that question will provide focus and clarity – it will tease the proverbial signal from the noise. 

We need to think (wisely) about and (rapidly) create a cloud strategy and design as part of a larger mission to digitally transform.  I’ve pointed out how my Legos metaphor was created to highlight complexity amid myriad choices.  Professionals are moving to the cloud, so the numbers suggest, at incredible speed. Just look at the compounded annual growth rate (CAGR) for the cloud computing market, as we published on our knowledge Exchange (CLOUD COMPUTING GROWTH, Evidence of a Data-driven Paradigm Shift).  As I assessed the seemingly infinite ways to assemble our Legos, and read the arguments, both pro and con, for each approach, two thoughts occurred to me. 

First, for all the roof-top shouting about the importance of working through the multi-dimensional matrix of choices to get to the right solution, I found it challenging to accept the stunningly similar compilation of pros and cons and how they applied to the options in front of business leaders and their strategists.  Surely there would be some differences of opinion.  Something felt off.  Why?

Second, amid all the hype about the enormous trillion dollar value potential stored in the cloud market (source: McKinsey), just waiting to be realized, I took note of the commentary and statistics discussed in a very interesting piece by BMC, The Cloud in 2022: Growth, Trends, Market Share & Outlook, posted in October, 2021. Following a long list of very positive trends and supporting stats, the authors cautioned, 

All these stats and trends verify and validate the exponential growth of the cloud computing industry. Cloud vendors, service providers and startup firms are gaining exponentially rising interest and popularity among investors, businesses and consumers.

But (and this is a big but), 

… [T]he growth figures should be viewed with the following caveat: cloud computing resources are drastically oversubscribed, underutilized and therefore, wasted.

According to BMC, 30% of all businesses waste cloud resources. They overspend by an average of 23%. No wonder 61% of business leaders listed as a top priority for the fifth year in a row figuring out how to improve their cloud spend ROI.  Why?

Thought leaders are quick to highlight the challenges will smooth out as businesses become more native cloud capable; I agree. But is that it? Is it wise to rely solely on the hopeful assumption that as businesses become more familiar with cloud computing they will better allocate their cloud spend and achieve solutions with ROI worthy of the adjective “optimal?” Given such optimization remains a priority after a five-year run, perhaps a fresh perspective is justified.  

Remember, the digital ecosystem is not simply changing; the rate of change is accelerating exponentially. Companies that wish to survive cannot adopt such a passive approach.  While it may sound counterintuitive, we are no longer in a measure twice, cut once world.  By the time you take the second measurement, whatever you may be measuring will have ceased to be relevant. Act, fail fast, and learn from that failure while simultaneously riding the wave of change. The next attempt will include wisdom from the first failure along with insights gained while continuing to keep pace with change. 

Incentives Matter – Experts are Optimized 

Leverage experts with incentive to achieve an optimal strategy.

I submit the answer to the question, “which cloud-computing deployment model works best” for any given organization gives rise to the same basic answer, and other issues float to the top of the priority list of objectives.

How is that possible, you might ask? Given the array of options and the myriad combinations awaiting assembly into any number of solutions (Legos at work) how did the vast array of choices suddenly disappear? They didn’t disappear. They are simply residual noise created by the rapid cycle of change.  Change is continuous and the acceleration of the rate of technological change is exponential. In such an environment, it is the public cloud-computing service providers (CSPs) that are most able to move quickly and at sufficient scale to keep pace with such change. 

It is worth noting that as of the end of Q3 2021 (source: Statista)  Google, Microsoft, and AWS together controlled 61% of the public cloud market share. Given the projected market segment growth, these very well capitalized and innovative companies and their business partners are highly motivated to mitigate all the “cons,” whether real or imaginary, in the vast array of blog posts, articles, and white papers offered by my friends still standing and shouting from the rooftop.  

Perhaps most compelling is the omnipresent discussion around security and control. While I question the validity of the concern on its face, and the examples McKinsey cited in the piece mentioned above seem to support my position, incentives drive behavior. Incentives derived from the profit motive drive innovation and invention. Recent advancements in secure computing technologies, such as confidential computing, demonstrate perfectly why all the energy expended assembling, falling short, and reassembling our Legos can and should be reallocated.

Legos Be Damned

In my last post I suggested it is important to be able to “re-think” your position on things.  The world is a fast paced, continuously changing digital ecosystem.  As I wrote in my last post, “today, the future is twice as close as it was yesterday and half as close as it will be tomorrow.”

We just freed up a great deal of intellectual horsepower to redeploy.  I suggest refocusing all this spare IQ capacity on your organization’s talent, culture, business model(s), and leadership to overcome the challenges associated with what it means to undergo real digital transformation. Having stiff-armed cultural lag and developed a cloud native infrastructure upon which the organization sits, you will have made progress on the path to digital transformation. And that is the prerequisite to establishing a hyper-adaptive organization imbued with a newly evolved survival mechanism – strategic plasticity.