5 enterprise cloud strategy trends for 2019

Cloud computing has become the de facto platform for fueling digital transformations and modernizing IT portfolios. Companies are increasingly finding business agility or cost savings by renting software through vendors such as Amazon Web Services (AWS), Microsoft and Google.

In fact, most enterprises procure cloud services from two or more vendors, a trend that will gain traction in 2019. This will boost the coffers of AWS, Microsoft, Alibaba, Google, IBM and Oracle, which will enjoy the lion’s share of the $200 billion in global public cloud spending for 2019, according to Forrester Research.

Despite the strict demands of the European Union’s General Data Protection Regulation (GDPR), the cloud’s geographic expansion won’t be slowing down, as vendors will expand their service portfolios and regional footprints worldwide.

But another shift is under way as the cloud progresses into its teenage years: Rather than just serving up cheaper temporary servers and storage, the cloud will bring innovative development services to enterprise applications in the year ahead, says Forrester Research analyst Dave Bartoletti.

For example, companies no longer seeking to hone the perfect cloud strategy; instead they want to know what their competitors are doing with public clouds. Are they building marketing analytics? If so, where? Are they building IoT apps? How and with whom? What follows these conversations, Bartoletti says, are discussions on how to move data created in core enterprise apps from the likes of SAP and Oracle into public clouds.

This innovation-seeking approach will boost enterprise adoption and spending, as companies modernize core business apps with analytics, machine learning (ML), IoT, messaging, and database services created in the cloud. “In 2019, cloud computing will be shorthand for the best way to turn disruptive ideas into amazing software — faster,” Bartoletti says.

Here CIO looks at the key trends shaping cloud adoption in 2019.

1. Multi-cloud strategies gain traction

When it comes to the public cloud, State Farm is playing the long game. While most enterprises have already made big bets on rented software, the insurance company is moving its first two core applications to the public cloud over the next several months, Ashley Pettit, State Farm senior vice president of IT, tells CIO.com. The conservative approach is by design “to make sure we have the right controls” for compliance and security, says Pettit.

But like most companies, State Farm is embracing public cloud software from multiple vendors. State Farm, which is migrating from mainframes and legacy servers, is moving its Drive Safe & Save mobile application to AWS this year and plans to move software for pricing and underwriting models there early next year, Pettit says. While AWS is State Farm’s primary cloud provider, it also works with Microsoft Azure and Google Cloud Platform to vary its options.

Diversifying cloud options is a common theme. Honeywell is using IBM and Microsoft Azure, while General Electric uses AWS and Azure services. For State Farm, the move is part of a broader shift to agile and “cloud-native” software development to achieve greater flexibility in writing software in the future, Pettit says.

2. Innovation in the cloud

Thanks to containers, Kubernetes, and “serverless” computing, the way core enterprise applications are deployed is being reshaped. Adoption of Docker containers has grown in recent years as corporate developers have modernized application deployment, Bartoletti says. Kubernetes, the software that automates the deployment, scaling and management of containers, has emerged as the enterprise’s orchestration layer of choice. In 2019, Kubernetes will become easier to deploy, scale and secure, with vendors rolling out new features for API-driven security policy orchestration.

The emerging “serverless” computing deployment model will also gain traction as more companies look to roll out digital services and applications. In serverless computing, customers develop, run, and manage applications without building and maintaining the infrastructure to run them. It provides an API to associate the function with one or more event, such as when an IoT sensor facilitates an action. Expect AWS, Microsoft, Google and other cloud vendors to ramp up their portfolios for serverless, also called function-as-a-service (FaaS).

Serverless, along with containers and Kubernetes, will form the foundation for modernizing core business apps, Bartoletti says. “In the future, all of cloud will be serverless,” Bartoletti says, adding that the tech industry is only at the “tip of the spear” regarding serverless.

Gartner estimates that more than 20 percent of global enterprises will deploy serverless computing technologies by 2020, an increase from fewer than 5 percent today.

3. A renewed private cloud push

Three main approaches to the private cloud will crystallize in 2019, says Bartoletti, who defines private cloud as a platform for hosting workloads not suited for a public cloud due to cost, security, compliance, data, architectural design, or other reasons.

One do-it-yourself (DIY) approach entails using VMware vSphere and software-defined infrastructure, an approach that banks such as Synchrony have taken but one that Bartoletti says tends to be “expensive, complex, and dysfunctional.” An alternative DIY model involves using OpenStack open source software. A third involves having a vendor build it for your enterprise, using converged or hyperconverged software stacks to minimize your tech burden.

“In each scenario, legacy systems will still exist, and you’ll still need to integrate them into these newer environments,” Bartoletti says.

4. Fast pass to PaaS

Enterprises will set their platform-as-a-service (PaaS) strategy to “balance day 1 and day 2 experience” in 2019, Bartoletti says. He notes that enterprises will marry excellent day 1 experience, which includes building and deploying apps, with an improved day 2 experience of governing operating platforms and applications.

Each organization will decide whether it will leverage PaaS unique to a specific cloud provider or focus on cloud neutrality, Bartoletti says. Some will continue to seek abstraction from any one cloud while waiting for vendor-neutral, value-add services, such as Kubernetes and TensorFlow, to mature and become easier to operate anywhere. Bartoletti advises CIOs to pick an approach, but be willing to reevaluate regularly.

Ultimately, Bartoletti says, “Your day 1 developer experience matters most to your app teams — don’t compromise it just to ease day 2 operations experience.”

5. SaaS ecosystems will rise

In 2018, SaaS vendors ramped up integration plays with moves such as Salesforce’s  purchase of API management vendor MuleSoft and Workday’s bid to unlock its platform. In 2019, expect integrated SaaS-based industry ecosystems to spawn, driven by enterprise software stalwarts such as Microsoft, Oracle and SAP, Bartoletti says. Early examples will come from supply-chain-intensive industries with a strong need to share information and collaborate across organizations, such as industrial, healthcare, manufacturing and government, Bartoletti says.