Public Cloud is about to strongly grow in 2016

by admin on April 30, 2016

There is no denial that everyone’s rushing to the cloud. Things have certainly been going in that general direction, but so far it’s been more of an amble than a rush. Last year, computing research found that about three per cent of data centre workloads per year were being shifted out to cloud providers.

It is clear that that average figure hides a multiple of scenarios, of course, from those that have moved lock stock and barrel to cloud, to those determined to keep themselves at least one bargepole length away from anything to do with the dreaded C-word. Between those extremes you have companies who are putting the odd commodity workload into the cloud, or who are using it to handle peaks in demand.

However, the big public cloud vendors have announced a huge growth in the adoption of their services. The largest by far – Amazon – saw AWS revenues rise almost 70% in 2015, the first year for a long time in which the company has actually made a profit – whereas Microsoft Azure may be growing even faster, albeit from a lower base. (While Microsoft will not reveal separate cloud figures it claims that revenue grew 140 per cent last year; nevertheless the consensus is that Azure is about a tenth of the size of AWS in revenue terms, with Google and IBM SoftLayer just behind.)

David Richards, who is CEO of WANdisco, believes that we are about to see the start of a major uptick in the use of public cloud services. Pursuant to David Richards, “I’d expect to see AWS go from being a $7bn to a $50bn company inside Amazon in the next two or three years. That’s going to be one of the IT stories of the century”, “I don’t know of a company that isn’t trying to move significant portion data processing into the cloud.”

Keep in mind that one of WANdisco’s products allows large volumes of data to be migrated to Amazon S3. Therefore, such growth figures may be wishful thinking: the more firms start pushing petabytes of data into the cloud the more demand there will potentially be for WANdisco. Nevertheless, it’s hard to argue with Amazon’s growth figures and there are signs that some of the traditional barriers to cloud adoption are being overcome.

The price is right

Whereas cloud providers have always claimed their services are cheaper than in-house equivalents this has frequently proved not to be the case in the long run. However, for many use cases public cloud probably is genuinely less expensive now. Public cloud prices have fallen 66 per cent in three years according to some estimates.

Besides, pricing models have changed to pay-as-you-go – with users charged by the volume of data stored or processed. More transparent pricing means that nasty shocks down the line are less likely. A terabyte of data stored in standard S3 will cost you around £50 per month, while putting the same in the Redshift data warehouse will set you back about £500. Microsoft Azure prices are comparable and recently Redmond announced a price drop too.

Overcoming jitters

Richards also states that worries about regulations, such as those around data location and security, are being overcome as the big players build data centres in Europe and as the hybrid cloud model, with sensitive data kept on-site, becomes a practical reality. “A number of government departments of the UK and the US are looking at this architecture very carefully, and banks I know could be working to move certain data-processing into the cloud,” he says. “Then it becomes a hybrid environment because you have some data behind the firewall some in the cloud.”

Pursuant to Matt Aslett, Research director at analyst firm 451 Research, some in finance are losing their inhibitions, at least for some functions. “Many financial services firms are cautious about the cloud, but some are adopting it and some are adopting aggressively to encourage transformational change,” he says. “For example, we recently spoke to a mainstream financial services firm using Amazon Redshift as its primary data warehouse for its billing system and related reporting and analytics.”

Besides, according to Aslett, Redshift costs just 40 per cent of the on-premises equivalent; therefore, that company is now looking to move other services to the cloud to save money.

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