By Mark Kirstein, Vice President, Products at BitTitan
For many people, the New Year is a time for reflection on the year gone by and an opportunity for renewed commitment to progress and goals. The same is true for businesses. As we embark on a new year and a new decade, many businesses are trying to anticipate where the market is headed so they can make strategic plans that will result in success.
Many things could influence market conditions around the world this year, from the 2020 Olympics in Tokyo, to the U.S. – China trade war, to the U.S. presidential election. While the U.S. surplus in exported services is shrinking overall, this trend is not expected to have a negative impact on the cloud services sector. Read on for our top six predictions for the cloud market in 2020.
- SaaS growth will continue
Currently, the cloud is a $200 billion market, yet overall IT spending is in the trillions of dollars. This means that spending for on-premises (on-prem) software and services remains strong. Is this a bad sign for the cloud market? Absolutely not. We anticipate the global cloud services market for 2020 to continue to grow in excess of 20 percent. Many organizations are moving to the cloud in stages and there are several factors that will keep migration in forward motion. These include increased confidence in and reliance on cloud services, the phase-out of on-prem software like Microsoft Exchange 2010, and continued aging of hardware and infrastructure. While we expect most companies to make conservative spending decisions in 2020, decisions related to the cloud are fundamental to operations, particularly for global companies, and not as likely to be put on the back burner. We will see continued innovation of SaaS services and offerings, coupled with organizations migrating closer to an “all-in” adoption of the cloud. There is a lot of opportunity ahead for SaaS.
- Cloud-to-cloud migrations will continue to rise
While companies are continuing to migrate from on-prem to the cloud, we expect to see a continued uptick in cloud-to-cloud migrations as more companies devote attention to optimizing their cloud footprint. Currently, a majority of BitTitan’s business is cloud-to-cloud migrations. The historical concerns of cloud security, reliability, quality, and SaaS-feature parity have largely been addressed, but companies are continually searching for the provider that can deliver the most value for their IT dollars. Businesses want the ability to move their data while avoiding the perils of vendor lock-in. Furthermore, maintaining a multi-cloud environment allows companies to better manage business risks.
- The use of containers will increase
Containerization, which packages up software code and all its dependencies so the application runs quickly and reliably and can be moved from one computing environment to another, has achieved mainstream adoption and will continue to be a strong market segment in 2020. Containers offer a great deal of flexibility and reduce the risks for companies moving to the cloud. They reduce infrastructure costs, accelerate and simplify the development process, result in higher quality and reliability, and reduce complexity for deployments. Containers also aid in cloud-to-cloud migrations. Businesses that use containers can easily run them on Google Cloud today and switch to other platforms like Azure or Amazon Web Services (AWS) tomorrow without complex reconfiguration and testing. This allows businesses the freedom to shop for the right cloud environment. This is one of the reasons the container market is growing at a rate of more than 40 percent, and we expect that growth will continue.
- Microsoft and Google will seize market share from AWS
Of the top three public cloud providers today, AWS was first to market and has enjoyed a considerable lead in market share. AWS has been particularly appealing for companies that want to provide “born in the cloud” services. But in 2020, we expect the two other top public cloud vendors – Microsoft Azure and Google Cloud – to make significant inroads and take market share away from AWS. Part of this is simple math: With such a big slice of the market, it will be hard for AWS to maintain its rate of growth. And the competition is getting stiffer. Microsoft is doing a great job of appealing to enterprises who are grappling with legacy infrastructure. Google also is making significant investments in its cloud computing unit. Its technology is already very good and easy to use, which will make Google a force to be reckoned with. Another trend we are likely to see is that smaller public cloud vendors will drop out or choose to focus their business on the private cloud infrastructure market, where they are more likely to excel.
- The market will expand and consolidate
As the cloud market grows, the ecosystem will expand with the types of solutions and capabilities to manage and streamline, increasing the value of investments in the cloud. On average, companies using cloud technologies are using five different cloud platforms. We will continue to see new and improved offerings to help companies assess, monitor, and manage their cloud footprints to reduce costs and improve security. As new, compelling cloud solutions enter the market, we are likely to see more consolidation, with Amazon, Microsoft and Google continuing to acquire new solutions to enhance their own offerings.
- 5G will usher in the next level of cloud adoption globally
Recently, Ericsson Mobility predicted that there will be 1 billion 5G subscriptions by 2023 and they’ll account for almost 20 percent of the entire global mobile data traffic. Besides the massive increase in speed provided by 5G technology, it also comes with a remarkable decrease in latency. While 3G networks had a latency of nearly 100 milliseconds, that of 4G is about 30 milliseconds, and the latency for 5G will be as low as 1 millisecond, which most people will perceive to be nearly instant. With this type of performance, we believe that cloud-based services will become more reliable and efficient. Not only that, but 5G may also accelerate cloud adoption in countries that are lacking wired infrastructure today.
Without a crystal ball, there is no way to know for sure what the market landscape will look like in the coming months. But by analyzing recent trends and considering their implications for the future, companies can take a forward-looking approach that will position them to stay ahead of the curve and be ready to seize opportunity as it arises. This year is looking bright for the cloud.
Mark Kirstein is the vice president of products at BitTitan, leading product development and product management teams for the company’s SaaS solutions. Prior to BitTitan, Mark served as the senior director of product management for the mobile enterprise software division of Motorola Solutions, continuing in that capacity following its acquisition by Zebra Technologies in 2014. Mark has over two decades of experience overseeing product strategy, development, and go-to-market initiatives.
When not on the road coaching his daughter’s softball team, Mark enjoys spending time outdoors and rooting for the Boston Red Sox. He holds a bachelor’s degree in computer science from California Polytechnic State University.