The evolution of public clouds will benefit enterprises

I don’t normally go to the Wall Street Journal for the cloud news, but this headline caught my eye: “Battle for the Cloud, Once Amazon vs. Microsoft, Now Has Many Fronts. Customers increasingly sign with multiple vendors to lower costs and cobble together the best services.”

I was more interested in the headline and subhead than the article itself. This is more validation of trends we’ve been seeing the past several years now appearing in the nation’s biggest business publication. In other words, the trends of multicloud, heterogeneity, and complexity have gone mainstream.

This brings up a larger question of how public cloud providers large and small will likely morph over the next several years. Here is the more obvious trend you’ll likely see and are beginning to see now: commoditization of public clouds leading to even more growth.

When you hear the word “commoditization” in the world of technology it’s almost never good. A commodity is no longer considered as having special innovation and can’t command premium prices. However, this time there will be a different effect.

As we use more public clouds for the same enterprise solutions, the clouds themselves will take on the role of a commodity resource provider. They will exist as abstracted resources, meaning that we’ll access services such as storage, compute, databases, etc., using a common set of interfaces (APIs typically) that will in turn call a public cloud service to meet the request. 

We’re going to move in this direction for two reasons: One, things are going to get too complex and too heterogeneous for enterprise IT to manage public cloud services directly. Two, this enhances the ability to scale, as well as the ability to create and operate in more agile ways. 

So, what’s the benefit to public clouds including infrastructure as a service, software as a service, and platform as a service? Again, two things will occur.

First, those “second-tier” public cloud providers that just could not keep up with the spending of the larger first-tier providers should be able to find more market opportunities. If we’re moving from single-cloud focus to multicloud and more heterogeneity, enterprises now can operate many different technologies, platforms, and brands, and easily can add in the second-tier providers with almost no cost or risk. Providers that have valuable niches, such as fast storage, the best blockchain solution, or the best database security can fit right into the enterprise “cloud soup.” Enterprises should be able to leverage this to get lower costs, higher value, and the ability to pursue best of breed. 

Second, the larger public cloud providers should experience rapid usage growth. Although they may not sell as many net-new cloud services, the ones they now have will likely grow rapidly in usage load. This means that many public cloud providers will make incrementally more money with less R&D investment. Moreover, this will likely occur over the next five to seven years, and they should be able to pass this infusion of cash on in the form of lower prices to enterprise consumers.

How should enterprises react to all of this? I’m sure some technology providers will lose out in this shift, but most cloud technology players will find that it’s a win/win. A win for them considering everything I’ve discussed in this post, and a clear win for enterprises that should find that they can pay lower prices, leverage best-of-breed solutions, and operate with much less complexity and much more agility. This has always been the objective.