Cloud Services Will Ramp Up Even More in 2021

The COVID-19 pandemic has sent companies to the cloud. Globally, companies spent a record $34.6 billion on cloud services in Q2, a 30% year-over-year increase and up 11% from the previous quarter, The Wall Street Journal reported. Amazon’s AWS and Microsoft’s Azure lead the field. To see where the cloud business may go, GLG spoke with cloud technology expert  MJ DiBerardino, CEO at Cloudnexa, a premier partner of AWS. Following are a few select excerpts from our broader discussion.

What are the top trends within infrastructure cloud providers AWS, Azure, and GCP?

The shift to work from home is significant. I’m not talking about Zoom or some kind of chat client. It’s more about enabling employees to be most effective and efficient in their current roles and duties. One of the services that saw a huge uplift across the board has been virtual desktop infrastructure (VDI), or the desktop as a service. Those types of solutions, in which workspaces are provided within the cloud, became critical for employers that had to meet specific types of compliance or work in high-security environments.

As the employee base was not able to travel to the office and be on the corporate network directly, their local devices couldn’t be controlled within the framework of corporate IT. What we saw was companies, especially within the health care industry, had major concerns around data protection, access, and processing. A viable solution was VDIs. That specifically on AWS is called WorkSpaces, and it just saw a huge lift. This trend continues because even though people have come back to the office, the value of being able to centrally manage all employees, ensure compliance, and make sure data isn’t leaving the corporate network has been proven.

Outside of that, data analytics is still hot. Another popular service that’s starting to make a lot of headway is around streaming, including live events.

What are you hearing about IT spending on cloud for 2021?

We’re expecting huge numbers in 2021. We believe next year will be one of the largest years of cloud migration and utilization in recent history. In 2020, we saw a lot of budget freezes and cutbacks. In years past, it’s been heavily migration oriented, but for those who could take advantage of the time and understand that companies are really budget constrained this year, there’s been a lot of focus on optimizations of current utilization, which is good, but migration is what really drives growth. We believe there will be a lot of pent-up demand in the first half of 2021. A lot of companies are doing extensive planning for next year on how to rearchitecture, how they’ll deploy and utilize, and take advantage of their cloud journey.

What are you seeing for AWS in terms of enterprise adoption? Have you seen growth as enterprises continue to work from home?

Absolutely. Enterprises have committed to AWS for the past several years now, and there’s still a healthy stream of projects. There was a little dip that we experienced from a growth perspective in Q2, but it’s really an anomaly. Next year I believe it will be faster paced. Everyone has recognized that they have corporate network weak points. Companies won’t necessarily shut down their data centers overnight, but there will be an acceleration of cloud adoption to ensure they’re supporting customers and employees for the next mishap. They need to adjust and create a model that works all around if a shutdown were to happen again, or just continuing to support this hybrid work-from-home use case.

Looking into 2021 and beyond, which business application platform is best positioned to benefit from the transition to the cloud and why? Microsoft Dynamics, SAP, Oracle?

I would add Snowflake as well. Snowflake can run on AWS and Azure. It’ll see one of the biggest upticks over the next few years. There’s no denying that data is growing — data needs to be warehoused, analyzed, and put to use. Traditional business apps do that well and SaaS solutions are great, but Snowflake excels with the pure infrastructure and platform as a service type of play.

How strong is Azure’s hybrid story, and is it resonating with customers? Will it continue to be a leader?

I believe in the hybrid model. It’s strong. Azure does a very good job at it without question, but compared with other ways of doing hybrid cloud, Azure’s biggest threat is VMware Cloud on AWS. VMware can be supported on any of the big cloud providers, but AWS was one of the first. It has done a good job at ensuring that the solution works well with as few interruptions as possible. Most corporations already utilize and deploy VMware internally. On the other side, Microsoft has had a great solution for many years, but it’s not necessarily an aspect that companies are looking for. We’re in this hybrid multicloud world, especially within enterprise, and it’s rare for enterprises, especially large ones, 100% committing to one stack, one solution. They are hedging and want to utilize at least two, possibly even three or four. It’s difficult to overlook the AWS VMware deployment and how that has really changed and helped enhance hybrid cloud options.

Any updates on Google Cloud Platform?

Google is definitely making great enhancements to its core services. It’s supporting more enterprise-level-grade applications and infrastructure, and that’s good news. Do I view it as a threat? Not necessarily. I still don’t see it taking a huge stronghold within enterprise cloud deployments quite yet. In time maybe, but the way that AWS and Azure are formulating their multiyear large contracts with customers, they own the space now. Google continues to be extremely strong with data analytics. That will drive growth over the next couple of years as more companies start to understand data science and how to utilize it to their advantage. Google has a head start there because it’s been doing it very well for so long now. Now that it’s made this large enterprise play, that’s where the company will start to take some share away.

With IBM spinning off its legacy IT management services business and focusing on its hybrid cloud and AI units, what competitive pressures are there for others?

IBM made a smart decision in terms of sun-setting this legacy IT management and going after more of the multicloud management approach, especially for enterprise. It’s had these contracts with enterprises for so long. From an outsource management perspective, IBM is doing the right thing. It is a top-tier partner across multiple clouds. But I don’t foresee IBM making much headway as a major cloud provider. It’ll stay more on the niche market with AI, machine learning, quantum computing, and things of that nature.

Does Oracle, coming off its TikTok deal, have a path forward in public cloud?

That’s a tough one. It’s a cool story, but really what is it? It’s a couple of large customers at the end of the day. For every large customer Oracle has, other platforms such as Amazon and Azure have many more. The reality is very rarely do I hear Oracle Cloud come up. When it does, it’s about looking to replatform off of Oracle onto maybe a native solution, AWS, Aurora, or something else. That’s not very positive news for Oracle, but a lot of customers are looking to figure out ways where they don’t need to renew their very large enterprise license agreements and save money, but still get the same performance and capabilities.

What are the most important areas to focus on as we wrap up 2020?

There will be a lot of rebuilding, restrategizing, and rearchitecting a lot of the work that has gone on in the past year, which is critical to usage and adoption growth for next year. Everyone had to move quickly to get solutions in place. When that happens, mistakes are made or corners are cut. It’s fine — the solution still holds. Companies will do a lot of self-auditing on these environments and ensure they’re properly built, and where they weren’t, they’ll take the proper remediation steps. Once that’s out of the way, 2021 will come and we should hit the ground running and see a lot more adoption than we’ve seen in the past.

One last point. Data analytics is very real. We’re finally seeing the tide turn on usage around data sciences and analytics and machine learning. It was pretty clear, especially once Snowflake went public, how positive it has been. This is a viable market, and it’ll just get bigger.

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About MJ DiBerardino

MJ DiBerardino is currently the Chief Executive Officer at Cloudnexa, an Inc. 185 company and a Premier Partner of Amazon Web Services, the leading public cloud provider. Prior to Cloudnexa, he was the Director of Cloud Services at Freedom OSS, one of the original AWS partners. Mr. DiBerardino holds the five primary AWS certifications and has been working in the cloud industry since 2007.

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This technology article is adapted from the October 15, 2020, GLG teleconference “State of the Cloud: Q3 Partner Update.” If you would like access to this technology teleconference or would like to speak with cloud technology expert, MJ DiBerardino, or any of our more than 700,000 industry experts, contact us.