In 2020, the global pandemic illuminated and reinforced the value of the cloud, driving adoption, and accelerating digital transformation worldwide in order to meet new market and customer demands. How will this continue to make an impact in 2021? In a previous article, I covered my top technology trends to watch in 2021. In this article, I’ll outline the cloud market trends to watch in 2021, as well as my predictions for the ongoing cloud race among leading cloud service providers.
State of the cloud race: AWS vs Azure vs GCP
When comparing the leading cloud providers, Amazon Web Services (AWS) has consistently led the pack, followed by Microsoft Azure and then Google Cloud Platform (GCP) in a distant third. Will that still be the case in 2021?
As the first entrant into the cloud services market, AWS will remain in the top spot. The availability, breadth, and quality of products and services from AWS remains ahead of its competitors, as they continue to offer new discounts, flexible payment options, and better price/performance offerings for its customers (i.e. Savings Plans, Graviton2 processors, ECS/EKS Anywhere, etc.). So long as AWS continues to live up to its developer ethos, remains customer-centric, and isn’t afraid to reinvent itself from time to time, they’ll continue to be the leading cloud provider on the globe.
I won’t dive deep into all the comparisons we could make between AWS, Azure, and GCP in this article (we’ve done this in our guides that compare their services and security). But I will share where things could shake-up.
In 2021, I predict Google Cloud will close the gap towards becoming No. 2 in the cloud provider competition. Google has never been shy to innovation, with leading solutions in big data (BigQuery), workplace collaboration (Google Workspace), and container management (GKE, Kubernetes). But to surpass Azure, Google needs to prove they can not only appeal to small- to medium-sized organizations, but also achieve critical customer mass with global enterprises.
With all this said, my recommendation is to compare the differentiated service offerings from each cloud provider in order to make the most of the cost, performance, and security benefits available.
Increasing dominance of SaaS and vertical cloud service providers
Although they’re deemed the “big three,” AWS, Azure, and GCP are certainly not the only players on the cloud scene. In recent years, Software as a Service (SaaS) solutions have made their way into headlines and companies’ tech stacks time and time again. This is largely because they’re available off-the-shelf and purpose-built for targeted pain points and/or industry use cases. SaaS players and vertical cloud service providers will continue their momentum into 2021, becoming a bigger part of companies’ IT budgets. With this, I also expect there will be even more mergers and acquisitions amongst cloud providers and SaaS players (e.g. Salesforce and Slack, AWS and DataRow).
Enterprises will need to start rationalizing and governing the solutions they choose to have in their IT stack. IT leads should be asking:
- “What is the return on investment of this solution?”
- “How much time are my employees spending away from meaningful work and instead focused on managing tech procurement and contracts?”
- “What percentage of our solutions perform redundant functions?”
- “Will we be able to manage our tech architecture as we continue to scale?”
Modern applications and containers
We recently conducted a report evaluating actual public cloud spend among nearly 500 organizations worldwide from January through September 2020. From these results, we can see that container adoption increased largely across the board in 2020, even in sectors that decreased overall cloud spend.
For most of the last three decades, we’ve been architecting applications based on variants of the client-server model from the 1990s, where the operating system is at the core of all our applications. The early cloud continued this trend with the majority of applications using virtualized compute and storage via IaaS. That is now changing as we are reaching the tipping point where most new applications are being built with platform services that expose no operating system or virtual server to its operators. Welcome to the 2.0 version of the cloud.
Increasingly automated cloud financial management
Earlier in this article, I mentioned the benefits of AI/ML solutions. One area in which I expect these technologies to make a significant impact is cloud financial management. Increasingly, businesses will manage their IT portfolio costs through automated technologies and ML-driven solutions. Organizations that are more hesitant will need to become comfortable with a “hands-off” approach, trusting automated solutions in order to operate at scale and with speed.
Why? Because the pace of change and speed of growth over the past year will force a critical decision point: implement automation and take your hands off the wheel, or accept that you will have a significant amount of waste in your cloud environment. I strongly suspect that most companies will no longer be able to tolerate this waste when an alternative is in front of them.
Hybrid and edge
There have been high expectations for public cloud edge adoption, with leading cloud providers introducing and investing in new solutions such as AWS Outposts and Azure Stack. However, from a business perspective, there’s been less traction with public cloud edge than expected.
When businesses want to be on-premises, they opt instead for an alternative private cloud solution. My take for 2021 is that edge computing will take off, but will not be dominated by the public cloud provider edge offerings and instead, the winners will be the existing vendors building private hybrid clouds.
The past couple of years were predicted to be 5G’s time to shine, but the technology didn’t quite live up to the hype due to operational and resource drawbacks. Making a bid for global leadership in leading technologies, China unveiled plans to almost double its 5G wireless capacity in 2021. However, due to security concerns, this won’t gain much traction in western nations, leaving a large segment of the market open to more local competitors.
While the full potential of 5G won’t be realized this year, I expect the technology to have a noticeable impact on the business world and in our personal lives in the future. Particularly in the context of an increasingly remote workforce, businesses will place a higher priority on 5G in order to provide the speed, coverage, and responsiveness needed to adapt.
One of the major intersections of 5G with the public cloud is the network edge. AWS, Azure, and GCP each have 5G edge offerings that are nascent today and likely won’t gain much traction in 2021, but the stage is set for significant growth and adoption in 2022. For years enterprises have struggled with how to support remote branch offices without local IT staff and potentially unreliable connectivity. If 5G can deliver on its promise, this opens up a whole new market for the public cloud providers, but also a new startup ecosystem. In 2021, we expect to see major partnership agreements signed between the big three public cloud providers and the major global telcos as the cloud wars move to the edge.
It’s always interesting to see how the global cloud computing market and technology industry is evolving in order to help influence our own technologies and solutions. However, our greatest influences come directly from the needs of our customers. The largest consumers of public cloud in the world rely on CloudHealth to optimize, secure, and govern over $10B in combined cloud spend.
We disrupted the cloud management market in 2012 by delivering a solution that transforms the way companies operate in the cloud with a single solution to manage it all. We’ll continue to disrupt the market by providing a scalable, flexible, and contextual suite of solutions that will allow customers to drive optimization, cost savings, governance, and innovation in their cloud environments.
To learn more about how CloudHealth can help your organization make the most out of its cloud investment, reach out to our team directly or see our solution brief: The Leading Multi-Cloud Management Platform