The Crystal Ball: Hosting Industry Predictions for 2015 and Beyond

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Around this time of year, a lot of articles crop up predicting what’s going to happen in technology next year. Quite often, the predictions are pretty safe and the observations are obvious. For a decade now, Chandler, our Senior VP of Product Development, and I have been getting a kick out of reading these types of articles because all too often, they don’t say much – “Everything will become more important” and so on.

The industry expects technologies to mature and propagate; there’s nothing revolutionary about that, especially since we’re in a golden age of cloud technology and evolution. Big data, mobile apps and business analytics – we’ve been talking about these things for years. The difference now boils down to the cloud platforms that support these apps: Which cloud platforms are being used? Which ones meet the needs of today’s technology demands, and the demands ahead?

What’s Next for the Cloud?

When it comes to the future of the cloud and hosting, one thing is for certain: Hybrid hosting environments and hybrid cloud are winning the day. The lines between dedicated hosting and cloud hosting are blurring more than ever. Pure cloud offerings aren’t holding up under the demands of I/O hungry applications and privacy/security considerations. All analyst reports indicate that the vast majority of the market is looking to hybrid for solutions.

Goodbye Windows 2003, Hello Cloud

The planned obsolescence of Microsoft’s Windows Server 2003 product in July of next year will bring people to the shores of hybrid and the hybrid cloud. Sure, a number of applications fade into the sunset each year, but Windows Server 2003 has an exceptionally large base to this day. It was a wildly successful server operating system and we’re going to see capital evaluations offset by operating cost advantages.

Now customers will be faced with a decision: Do I upgrade my Windows 2003 license and hardware, or do I go with a new way of doing things such as cloud and hosting? Because of the tremendous value proposition of cloud and hosting, the rate of Microsoft upgrades won’t be very high, meaning an even greater number of migrations from corporate IT data centers to Cloud and Hosting platforms.

Containers and Docker

Docker, Docker and more Docker. Building, shipping and running any app, anywhere. This is more than just a trend; Docker is about easily moving workloads around different points in the infrastructure, and there’s no better place to do that securely and efficiently than a truly on-demand hybrid cloud platform.

People will learn the true value of being able to move an application from a small cloud instance to a dedicated server, and what it can bring in terms of servicing next generation workloads. You’ll see new management UIs, new controls and new ways to build and test Docker containers, new ways to cluster them. It’ll be fast and furious, like the beginning of cloud all over again.

Cloud Commodity Players Racing to the Bottom

Google, Microsoft, VMware and others will continue to mindlessly cut prices because they can’t get traction in the cloud market against Amazon. This battle for market share is shaping into a race to be the low-cost cloud leader, which, as it turns out, is going to be a race to the bottom for generic non-value add infrastructure providers. They all have “AWS envy” and what all the competitors are missing is that they aren’t different enough from AWS to win.

The Death of Private Clouds

Say goodbye to that old fashioned, internally-run private cloud. It’s just a matter of time before internally-run private clouds become a relic of the past, just like everyone has been saying. The truth? It was never a thing to begin with.

A private cloud is nothing but compute infrastructure with a layer of virtualization running on top. When the public cloud emerged, marketers latched onto the word cloud and called it “Private Cloud.” In a face-off between private cloud and public cloud, or even private cloud and a hosted private cloud, the benefits and availability of services that you get in a hosted service expose the many inadequacies and low value return of private cloud adoption. Put a fork in it.

Microsoft Evangelizing the Cloud

Microsoft is coming up increasingly in the cloud conversation. You’re late, Microsoft, but welcome to the party. CEO Satya Nadella has been pushing a cloud-first strategy, and that means their enterprise base will be heading that way. But will it go to Microsoft or to someone else?

No longer just a playground for test and dev environments, Microsoft has plans to push their substantial enterprise customers to their own cloud for services. The push starts now, and lately Microsoft has been in a price war with AWS and Google, a literal race to the bottom. Our prediction is that Microsoft’s push will evangelize the untapped market on cloud. Some of those customers will consider Azure, but many others will go to other cloud providers.

AWS Will Sell or Spin Off

Amazon Web Services is a cash cow for its parent company Amazon. Amazon itself is hemorrhaging money each and every quarter to the tune of hundreds of millions of dollars. There’s always an element of growth vs. profit, but it’s hard to recall anything on this scale for this long. It may not be long before shareholders get restless.

AWS is a profitable and hugely successful business that is being challenged by Google and Microsoft – both companies that have heavy resources and motives to take some of that cloud market share. There’s too much pressure on the parent company to keep this up, and AWS will be released to its own accord.

Mobile Will Liberate Emerging Markets

We have already seen the power of social media in politics. We see this everyday in the United States. But what fascinates me is how mobile is shaping the global economy and politics in regions of the world that have never known the power of immediate information flow. It’s like watching a collective-consciousness being born.

Emerging markets will continue to be a significant driving force in internet adoption, due in a large part to the affordability of smart phones. This trend will continue throughout China, India, Indonesia, Nigeria, Mexico, Philippines, Egypt, Vietnam, South Africa, Pakistan and Thailand just to name a few. And mark my words, where free access to information comes, so too will come economic opportunity and sometimes-massive changes to political regimes. We are happy to enable this freedom by providing the needed infrastructure.

The Internet of Things Expands

Refrigerators that tell you when you’re out of milk. Thermostats that report the temperature in your home to your phone. Watches that tell you your stocks’ prices. Big deal, right? Yes, actually this is a very big deal. Smart devices, or the Internet of Things (IoT), are a classic case of big data. Many collection points, massive amounts of data, lots of analysis to get through and a need to process it quickly.

Hybrid environments and hybrid cloud will emerge the winner for these workloads. They’re the perfect match for IoT because of its multi-purpose, multi-layered construction that gives you high performance, but also scalability. IoT will push more hybrid adoption than ever before. Never in history have we had such cheap sensors, cheap bandwidth, cheap processing, such ubiquitous wireless coverage and IPv6, which is literally supplying a limitless supply of internet addresses.

Data, Big Data, Big Data – Boom Goes the Data

IoT will get bigger, HortonWorks will go IPO, and all of sudden it will seem like the world has woken up to the power of data. Real-time data is rising rapidly, the ability to find that data ubiquitous, the ability to share it simple. As the costs of compute and storage fall, you will see more and more new companies create and use next generation big data apps. Whether it be for data mining for large corporations or pattern-recognition for some of the hardest, most complex problems we face, have no doubt that these trends will drive the solutions we see. We also predict that data generation and storage will skyrocket to an estimated 15,000 Exabytes by the end of 2015 according to IDC. That’s 15,000,000,000,000,000,000,000 bytes. Sheesh…I remember when I had 12MB of RAM and thought that was a lot. (Did I just date myself?)

“Fog” Computing takes Root

The “fog” comes to the forefront: We have written a lot about about cloud computing… some could say we have based our careers on it. But there’s a change coming.

Cloud has always been “where data is stored outside of your local device,” often on servers in data centers sometimes hundreds or thousands of miles from where the data was generated. But in the age of hybrid and in combination with IoT, we expect more of the network intelligence to reside closer to the source of the data: what technologists call the network edge or the fog.

Look for the rise of fog computing architectures leveraging hybrid networking. Most data will end up too noisy or latency-sensitive (it needs to get there and back super-fast) to be carried all the way back to the cloud. The next frontier in IoT application development will involve both hybrid and fog components to make them work.

The state of technology is never static, and the story of cloud is far from complete. Hybrid is the bridge to the future. It’s the only technology that can keep up with the pace of technological development. It’s a pace that’s accelerating like never before, we’re in a race to adopt technologies across the board. Once upon a time the technology industry had a decade or so to absorb, evolve and perfect technologies when they emerged. And today, that pace is crushed by the rate of change in the industry.

Have a prosperous and happy New Year.

emilAbout the Author

Emil Sayegh is CEO of Codero Hosting where he is leading the next generation of cloud computing with the hybrid cloud. A cloud visionary and an industry veteran, Emil is credited with launching and leading the very successful cloud computing and hosting business for HP and Rackspace.

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One Comment

  1. Jeff Reich

    Well written by a man that knows!