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Cloud 2015: Unrelenting disruption of traditional IT

In this third of three blog posts on IDC’s IT outlook for 2015, analysts tackled the topic of cloud.

Here IDC’s Robert Mahowald, program vice president of SaaS and cloud services; Mary Johnston Turner, research vice president for enterprise system management software; and Rick Villars, vice president of data centers and cloud, outlined three ways in which the cloud will shake up IT ecosystems in 2015 and how IT leaders can prepare.

Hybrid cloud adds complexity to IT environments

IDC predicts that by 2016 more than 65% of enterprise IT organizations will commit to hybrid cloud technologies.

“This is going to really drive a number of changes across the structure, management, and just operational velocity of many IT organizations,” Turner said.

Enterprises are being driven to adopt hybrid cloud for a number of reasons, Turner said. These include the need for cloud service diversity, the demand by end users for more and more self-service IT, and the growth of OpenStack and open source containers.

“So for IT organizations this is going to create an environment where the real demands for what you have to do every day are not so much about the care and feeding of individual components but really about ensuring the end-to-end delivery of IT services, or IT as a service, that’s defined in terms of policies and SLAs and user experience and compliance,” Turner said. “And for many enterprise IT teams it means that you’re going to have to do a lot of learning in a quick amount of time.”

IT is going to have to master new tools and standards as well as understand what’s going on in open source, because Turner predicts open source will be an important enabler for hybrid environments.

How complex will these hybrid cloud environments be? IDC estimates that 60% of enterprises will probably subscribe to 10 or more cloud services and IT will not always know about all of them. On top of that, 25% of those services may go out of business in a couple of years, Turner said.

“So it’s going to be a very dynamic, fast changing kind of churn to IT environments which is very very different to what we’ve seen traditionally where change was really centrally planned and managed and executed slowly,” Turner said.

This means there will be a lot of concern around maintaining the performance and security for all kinds of applications.

Turner said IT teams along with major stakeholders will have to jointly review corporate policies around issues such as data protection and risk management to really make sure those policies are appropriate for a hybrid cloud architecture.

Data privacy regulations will determine cloud use

IDC predicts that in 2015 65% of the selection criteria for enterprise cloud will be shaped by efforts to comply with data privacy legislation.

“We think there’s going to be a muddle of sorts for a year or so when the SaaS and PaaS providers begin to branch out from where they’re hosted to get at the new geographies,” Mahowald said.

He added that these providers don’t fully understand who will be responsible for not only the SLA but the end-to end-security as they branch out. Making matters more complex, the end-to-end service will likely involve a whole chain of cloud providers.

“It used to be, you know, I bought software, I installed it in my data center, I ran it locally, it was pretty easy to figure out where the fault might lie. Now all of a sudden there’s a chain of providers each providing a discrete piece of either capability or delivery and that makes it much more muddled,” Mahowald said.

However, Mahowald said new services are emerging, such as “indemnification as a service,” that help to figure out who is responsible for what between providers and who will bear the monetary costs should there be losses.

Even so, Mahowald urges companies to do their due diligence and make sure they are getting what they need in terms of compliance.

Enterprises — in addition to having a governance, risk and compliance committee — should also form a service management team as part of the CIO/IT team. The service management group is in charge of implementing cloud technologies within the organization. He  urged CIOs to join CISOs in learning the laws that govern privacy and compliance issues. It is increasingly important for IT professionals to be aware of and learn about the legal aspects of cloud computing — whether  privacy laws or dealing with cloud contracts or local laws, Mahowald said.

“At the end of the day when the lawyers show up we think it’s super important to have an understanding of where your data and your assets are when they’re not in your data center,” Mahowald said.

Managing risk in sourcing IT services

IDC predicts that in the next year or so 75% of IaaS provider offerings will be redesigned, rebranded, or phased out.

“We do expect to see some players who announced significant cloud efforts over the last couple of years to begin to back track from those or phase out those efforts,” Villars said.

Because many of the initial cloud implementations that service providers built are proving difficult to enhance, change, and modify, Villars said providers are now rethinking and changing their cloud services.

“We see many [service providers] going now and making significant [re-architectures] in their environment to create more evergreen networks or evergreen solutions that will allow them to be much more flexible about continuing to introduce new technology, introducing new capabilities without having to do a major rebuild,” Villars said. However, over the next couple of years this transition will be a significant issue for companies to sort out, Villars said.

And companies will have to incorporate the ability to switch vendors into their IT planning and governance processes.

Villars gave two pieces of advice to help companies deal with this transition.

  • “Go back to service providers that you’re currently working with as well as those that you’re evaluating [and] demand deeper insights into the road map, into how the road maps are going to enable this kind of evergreen operation so we don’t have to go through these kinds of rebuilds again.”
  • He also said to make sure that, when your company is talking to a service provider, “refresh cycles” or rebuilds are not part of the conversation. “This is supposed to be an evergreen environment so make sure the conversation is including that idea of long term [continuous] operations.”

For more IDC 2015 forecasts check out IDC prediction for IoT 2015: It’s a doozy and IDC 2015 security predictions: How to keep up with the bad guys

Let us know what you think about the story; email Kristen Lee, features writer, or find her on Twitter @Kristen_Lee_34.