Thursday, December 18, 2014

Blueprint: 2015 and the Rise of the Multicloud Enterprise

by Chris Sharp, Equinix VP of Cloud Innovation 

Those enterprises deploying hybrid and multicloud infrastructures will be the ones to watch in 2015 and beyond. According to Gartner, global cloud adoption is expected to reach $250 billion by 2017, with 50% of enterprises having hybrid clouds.

It’s exciting to be in the center of this skyrocketing market, along with our pioneering cloud partners and enterprise customers who are leading the way in hybrid and multiclouds migrations. Earlier in 2014, we introduced the Equinix Cloud Exchange, which automatically enables the provisioning of one-to-many virtual, cloud connections on-demand.  The Exchange’s unique hybrid and multicloud interconnection capabilities have compelled leading platform providers Google Cloud Platform, Cisco Intercloud and IBM’s SoftLayer to come onboard.  They join AWS and Microsoft Azure and our expanding ecosystem of more than 450 cloud service providers (CSPs) in bringing cloud services to a growing global market.

From our vantage point, we can clearly see how the cloud industry is lining up to expand its footprint and forever change the IT landscape. Here are some critical trends in 2015 that we believe are making cloud more integral than ever in how companies conduct business well into the future.

The number and types of cloud services embraced by enterprises will rise

Responding to ever-increasing pressures to reduce costs while increasing productivity, enterprise IT departments will sharply increase their adoption of cloud services, definitively shifting the balance from client-server to cloud-delivered applications. While it is currently assumed that most enterprises use 30 to 40 cloud services, most applications continue to be delivered on-premise. By the end of 2015, most enterprises will have the majority of their data storage, backup, disaster recovery and business intelligence applications delivered by CSPs. A recent survey by Dimensional Research, showed that 77% of IT professionals are planning to deploy to multiple clouds within the next 12 months.

Hybrid cloud will be everywhere 

From the Fortune 500 to small and medium enterprises, companies in every sector and every geography will embrace hybrid cloud architectures and service delivery. Hybrid cloud strategies offer businesses the best performance at the lowest cost, whether users are accessing collaboration applications via the public cloud or performing disaster recovery via a private cloud within a multitenant data center. Finding a company using only client-server applications could be extremely difficult by the end of the year. However, there will always be those cases where making the change to cloud does not make technical, business or “political” sense.

Global expansion will be driven by the cloud from now on  

High-growth enterprises, driving increased revenue through globalization, will increasingly turn to cloud services, regardless of geographic location. Why build expensive and expansive data centers and applications worldwide and hire the local IT support staff needed to run them, when you can lease them from a growing pool of global providers? Why commit CAPEX when there’s much more cost-effective OPEX solution? Global cloud deployments speed time-to-market, keep costs low and maintain consistency of providers and services. In 2015, CIOs at winning companies will commit to the cloud and never look back.

SaaS will be demanded 

CIOs will require SaaS delivery of the applications they need as a foundational element of RFP development and application selection criteria, eschewing on-site deployments. Winners in the software industry will recognize that server-based deployments are the exception, not the rule, and will place the majority of their development and sales focus on SaaS.

Self-provisioning cloud services will become the norm 

While cloud services offer clear benefits in terms of cost reduction and increased performance, how companies select, secure and maintain them is in flux. Few CIOs have comprehensive visibility into the hundreds of cloud providers developing applications and other services that can help their companies excel. Smart companies will even outsource the outsourcing of their cloud services. The rise of a new type of uber-cloud provider – with the unlimited ability to access and interconnect multiple cloud providers and the software technology necessary to dynamically and seamlessly provision connections on demand  ̶  will greatly accelerate hybrid and multicloud adoption.

Enterprises will say “Farewell” to vendor lock-in

Companies will continue to adopt a variety of best-of-breed solutions that ensure performance and flexibility, which provide choice and interoperability. This gives both network and cloud service providers who have embraced opportunities to peer with others through third party exchanges multiple opportunities for success. Those who rely on vendor lock-in will be scrambling to re-evaluate their previously successful business models.

Third party multitenant data centers will dominate 

The current trend of businesses (cloud providers and enterprises alike) migrating to multitenant data centers will dominate the cloud landscape. According to the 2014 Talkin’ Cloud100 survey, 86% of cloud providers host their services in colocation data centers. On the enterprise side, Dimensional Research reported that 45% of new cloud-based applications deployed over the next year will be hosted by colocation providers. Multitenant data centers bring more companies closer together to access a vast number of resources, including cloud and network service providers, industry partners and prospective customers. This dense ecosystem allows for vendor neutrality, fast time to market and access, flexibility, ease of service and cost-savings when deploying and consuming cloud services.

Companies will adopt private cloud connections to address security concerns 

Enterprises deploying multicloud architectures will require secure, high-performance private connections that are scalable, on-demand and provide access to multiple clouds using multiple network technologies, across multiple global access points. Dimensional Research reported that 72% of IT professionals note security as a top benefit of a direct connection to cloud providers, recognizing the clear benefits that they provide over access via the public Internet.

Out over the clouds 

Hybrid and multicloud computing are paving the way to a plethora of new markets, such as the Internet of Things and the Industrial Internet; new enabling technologies, such as cloud-based predictive analytics for big data; and many new innovations that have yet to be discovered. 2015 is posed to be the year when enterprises will take that next “giant leap” to the cloud.

About the Author

As the vice president of cloud innovation, Chris Sharp leads the development of cloud services solutions at Equinix. Prior to his role at Equinix, Chris held VP positions at Reliance Globalcom, FLAG Telecom and MCI/VerizonBusiness.



About Equinix

Equinix, Inc. (NASDAQ: EQIX), connects more than 4,500 companies directly to their customers and partners inside the world's most networked data centers. Today, businesses leverage the Equinix interconnection platform in 32 strategic markets across the Americas, EMEA and Asia-Pacific. www.equinix.com



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