It’s cloud prediction time: IDC, Gartner (and I) weigh in

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( -- Analyst powerhouses IDC and Gartner both rolled out their latest cloud computing and big data predictions and statistics Thursday morning, and while some are bold, others might have you saying “Duh.” Here’s what they have to say, and how that squares with what I see.

On big data

“Big Data will earn its place as the next ‘must have’ competency in 2012″ (IDC). It’s hard to dispute this, if it hasn’t earned that status already. However, IDC does rely on some questionable logic to support its claim. It predicts that 2.43 zettabytes of unstructured data will be created in 2012, but much of that is only a big data problem to the degree it requires a lot of storage. Photo, video and music files will comprise a lot of that volume, and I think we’re a ways of way from doing meaningful analysis of those data types at a broad scale.

“2012 is likely to be a busy year for Big Data-driven mergers and acquisitions” (IDC). On this prediction, I think IDC is spot on. That being said, I don’t know exactly where those acquisitions will happen. NoSQL database vendors (for example, the red-hot 10gen) seem like ripe targets because they’re gaining steam among enterprises, yet only Oracle has really put forth the effort to develop its own. On the Hadoop front, Cloudera has been adamant about not being for sale, and many of the up-the-stack analytics startups (with the exception of Datameer, perhaps) are just too young.

In the general analytics space, companies such as ParAccel, Infobright, Kognitio, Quantivo and Attivio come to mind as potential targets.

“Through 2015, more than 85 percent of Fortune 500 organizations will fail to effectively exploit big data for competitive advantage” (Gartner). Wow! I guess it depends on how Gartner defines “exploit,” but I would argue that most of the Fortune 500 is already at least experimenting with activities such as sentiment analysis and data mining with Hadoop, which should result in some competitive advantage. Gartner does make a valid point about the velocity of data streams and the timeliness of data processing, though. If organizations focus too heavily and invest too much on early-stage uses of big data tools without looking to the future, they might not be prepared to fully exploit big data technologies as an engine for real-time decisionmaking.

On cloud computing

“[In 2012,] 80% of new commercial enterprise apps will be deployed on cloud platforms” (IDC). Eighty percent seems like a very high number, but without having read the report, it’s tough to gauge how accurate this prediction might be. If IDC is defining commercial as being customer-facing, and enterprise apps include even those apps by web startups, 80 percent might be perfectly reasonable. The percentage of apps deployed on the cloud will certainly rise as startups launch and use cloud platforms almost exclusively. And enterprises deploying new, non-mission-critical apps or apps not containing sensitive data (e.g., web sites and mobile apps) certainly are looking more at cloud-based options.

“Amazon Web Services [will] exceed $1 billion in cloud services business in 2012 with Google’s Enterprise business to follow within 18 months” (IDC). I think Amazon Web Services will do that in 2011. Google following suit by mid-2013 seems reasonable, too. I haven’t seen Google’s “Other revenue” line item analyzed like I have for Amazon, but Google pegged it at $385 million during the third quarter. Somewhere in there is its Google Apps and App Engine revenue.

“IDC … expects a merger and acquisition (M&A) feeding frenzy.” Yup. And it’s probably right that SaaS companies will prove more appealing than PaaS providers in the next year. After seeing Microsoft’s trials and tribulations with Windows Azure, I don’t think too many large vendors are looking to jump headlong into that space just yet. One interesting prediction from IDC: Microsoft will buy Netflix to serve as a marketplace for apps and content.

“By 2016, 40 percent of enterprises will make proof of independent security testing a precondition for using any type of cloud service” (Gartner). Oh, yeah, this is going to happen. Not only will there be a third-party certification process as Gartner suggests, but I think there will be a strong tie to cloud computing insurance, as well. The safer a cloud is, the lower companies’ insurance premiums will be when using that cloud. Rather than viewing this process as some implicit acknowledgement that the cloud isn’t secure, I think cloud providers will embrace it as an opportunity to prove just how secure they are.

“At year-end 2016, more than 50 percent of Global 1000 companies will have stored customer-sensitive data in the public cloud” (Gartner). Gartner rationalizes this prediction in terms of cost savings for organizations, but I’d argue it’s directly related to the previous prediction about security testing. As cloud computing security improves, in general, and is bolstered by independent certifications and insurance policies, companies will feel a lot more comfortable putting sensitive data in the cloud. Furthermore, although most cloud providers will likely never put real skin in the game, cloud insurance will assure companies that they’ll be compensated in the case of data loss or security breach.

“By 2015, the prices for 80 percent of cloud services will include a global energy surcharge” (Gartner). I don’t see this happening. Unless, of course, we’re talking only about enterprise-grade cloud providers that already allow for negotiated contracts or co-located private clouds. The type of cloud business model pioneered by Amazon Web Services — now utilized by almost every developer-focused cloud service — relies too heavily on simplicity in pricing to include surcharges and other fees that will seem like nickel-and-diming to customers. That being said, if data center energy costs — which appear to be shrinking, actually — start to outweigh economies of scale for a provider like AWS, there’s no reason prices have to keep falling as precipitously as they have been.

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