2019, The Year Lightning Strikes the Cloud Market
Smaller teams, bigger investments, and broader reach for cloud technologies
As the head of an open source software foundation in the cloud and cloud native ecosystem, I have a unique vantage point — ground zero, if you will, for what the future of enterprise technology is going to look like. I have the opportunity to spend time with major cloud providers, global Systems Integrators, Independent Software Vendors, and enterprise executives, hearing their perspectives on this quickly changing market, and what it means for them. These conversations are always enlightening, and color my view on what is happening now in technology and the role it will play going forward.
2018 brought a number of significant changes to the cloud and cloud native space. New technologies emerged, new standards were defined, and technology adopters have upped their game to keep pace with a quickly evolving landscape.
This year we saw Kubernetes emerge as the defacto standard for container orchestration, enterprise organizations gaining confidence in the cloud (and moving more workloads there), significant funding for startups based on open source technologies (Hashicorp, LightStep, and GetSolo to name just a few), and a few large acquisitions (most recently Red Hat and Heptio). This all reinforces not only the role that cloud and cloud native technologies will play in the future, but more importantly, the role that open source technologies play in the innovation that is happening.
What do I predict for 2019?
1. Market consolidation
Consolidation will happen in the cloud native ecosystem. Today the landscape is big, fragmented, and frothy — in short, there is a lot going on. This is how new markets evolve — new technology is created, there’s a rush of new startups, a new ecosystem is created around the new technology — lots of activity to see what works and what doesn’t.
As the market and the technology mature, we’ll see alignment around a key technology. The leaders in the ecosystem will prevail, either through significant exits or acquisitions by incumbent technology companies. The rest of the market solidifies around the prevailing solutions, and it moves to scale. In the cloud native space we are already seeing beginnings of that, with IBM’s acquisition of Red Hat, and Heptio’s acquisition by VMware. Look for more of that in 2019.
2. Scale, scale, scale
I continue to be impressed by how enterprises around the world are progressing on their digital transformation journey. Companies like Comcast and Home Depot continue to blow me away by how many new applications they are developing on a weekly basis, and how frequently they are now pushing code into production (it’s daily, if you were curious).
In 2019, we will see enterprises develop and run even more modern cloud applications, at scale. I predict we will see more enterprises running thousands, if not tens of thousands, of cloud-based applications. These applications will span a variety of business solutions — from communications and logistics, to point of sale systems and dashboards.
And more interestingly, these application workloads will run across a variety of cloud infrastructures, both public and private, and across a number of platforms. Applications at scale will require a multi-platform approach. The ecosystem around these applications is going to evolve quickly.
3. The rise of multi-platform
Enterprise organizations will start to embrace the idea that in order to handle a broad spectrum of application workloads, they need a variety of platforms and technologies. This was a trend that I started to see this year, but it will become more prevalent in 2019.
Why 2019? Enterprises are getting the hang of cloud native technologies and continuous delivery. And with this mastery, they are also realizing there is not a single “silver bullet” technology that can address the broad array of application workloads found in an enterprise. If you haven’t realized that yet, I have some news for you: there is not now, nor will there ever be, one technology that solves ALL of your needs.
The good news, though, is that when you accept the fact that you will need a variety of platforms and clouds, you can better understand what choices you do need to make, ie. identifying the platform technologies and clouds that best serve your unique application and business needs.
Multi-platform also has the benefit of offering you immense flexibility — choose what works best for you now, and the ability to change your mind in the future as new offerings and needs dictate. You are not putting all of your proverbial eggs in one basket. Multi-platform means you get to discover the right combination for your business. 2019 will be the year when enterprises begin to embrace this versatility.
4. Reskilling will become a core strategy
In 2019, we will see more enterprises embrace the idea of reskilling/upskilling their existing workforce. The trend over the past two decades has been to outsource new or non-core skills, or to phase out current employees to replace them with folks with the desired skill sets. However, in this new cloud market with so many new technologies, those with the desired skill sets are already employed. Companies will need to look to their existing employees, and invest in reskilling or upskilling them.
The pool of talent that has experience with cloud native architectures and application development is small. Essentially, the technology is evolving at the same momentum as the training. That means, to fill out the workforce that’ll be needed in coming years, organizations can keep themselves ahead of the curve by building continuous learning cycles into their business model. It’s smart on a human level and on a financial level. Companies that embrace this mindset are able to tackle greater challenges and bring to market more dynamic solutions with a far healthier workforce than companies that only take the short term gains of outsourcing and phasing people out.
5. All eyes on China
2019 is going to be a very interesting year to watch China, and not just because of the ongoing trade wars. I have been to China four times this year, and with each visit I continue to be amazed by how quickly the tech industry is moving there. China is investing heavily in AI, and innovating in leaps and bounds. We are going to start seeing that push how AI is developed and implemented across every industry, from automotive to healthcare to transportation to logistics. AI is going to push digitalization to happen at a much faster rate than the previous few years. Enterprises around the world are focusing on how AI can really push their organizations forward. In 2019, we will start to see how AI and China will shake up the current hierarchies. If you are interested in China and the evolving AI space like I am, I would highly recommend reading AI Superpowers: China, Silicon Valley, and the New World Order by Kai-Fu Lee. It is a really great primer on how China operates, but also what the future might hold for AI.