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Embotics Cloud Management Blog

Taking Stock: The Current State of Enterprise Cloud

What a fantastic way to kick off the new year!

For the second year in a row we were named a Leader in the 2020 Gartner Magic Quadrant for Cloud Management Platforms1. We believe that this aligns perfectly with us being acquired by Snow Software a few months ago who is a Leader in the 2018 and 2019 Gartner Magic Quadrant for Software Asset Management Tools. Go team!

In this year’s report, Gartner notes that “By 2025, the percentage of enterprises deploying multifaceted cloud governance tooling will be over 70% versus less than 10% in 2020.”1 I’ll let you read the report for yourself, but we believe that most organization’s hybrid cloud journey’s have just begun – and this will only continue to rapidly accelerate.

What’s changed in cloud (and what hasn’t)

A lot has changed over the last year and yet it still feels like so much is the same.

Enterprise companies are still trying to:

  • Execute migrations strategies,
  • Contain cloud costs, and
  • Govern cloud consumption.

The cloud is an inevitability for organizations looking to increase their agility and the speed of innovation. Software is eating the world and cloud is the backbone of software now. As homes become smart, cars become computers and retail & banking go mostly online, the cloud continues to just explode in growth.

With so much change present in the technology industry – particularly with the major cloud providers, I wanted to offer some thoughts on the market and where things could head in 2020.

Few areas where we’ve seen the most change or areas that require additional reflection:

  1. The ongoing cloud cost challenge
  2. Microservices/containers/serverless adoption
  3. Cloud governance & security focus

We have yet to see cloud as a utility – the costs are still out of control

Yes, cloud infrastructure is transforming into more and more of a utility. It is a necessary cost and the benefits are numerous. Whether it’s a speed of development, customer experience, or other need, the cloud provides the scale and speed to execute business goals.

That said, we are still feeling the shock of large cloud bills. I routinely talk to large enterprises who’s cloud budgets are 50-100% over what was forecasted. Millions of dollars in overages are eating into corporate profits, and finance is spending more time than ever focused on reducing cloud costs.

I must say I am impressed with the due diligence that finance is putting into cloud cost analysis. I’ve spoken with large enterprises that have dedicated financial analysts and attended FinOps meetings that make my head spin when they get into some of the financial jargon.

However, I do get a bit he concerned when I see companies separate analysis from the people who actually manage the cloud. True cost optimization is seeing the problem and fixing it quickly. One firm I spoke with manages their financial analysis of their cloud deployments in a silo, and then had a large report to IT to act on. This becomes problematic though when IT then has to redo the work of finding these resources and then confirming that the rightsizing or whatever action can be taken.

I’ve always preferred our holistic approach of integrating cost analysis with the ability to click a button (or even automation) to fix the issue.

Serverless is gaining momentum but is still in its infancy

Serverless, functions and containers, oh my. This topic comes up in two-thirds of the conversations I have, yet at times it seems as if we are still just getting started. There are so many large enterprises that are still >80% on-premises, and the focus is 100% on lift and shift strategies. It seems a misnomer to say that microservices are mainstream. I agree they are becoming the accepted best practice and goal of any dev team, however for some organizations it’s still not a serious consideration for 2020 implementation.

Cloud teams – as a whole – are still suffering from a shortage of resources and expertise. This problem only gets worse with newer tech like serverless and containers. Without the people and budget (not to mention the 50+ competing priorities) for many larger organizations microservices remains in the innovation lab or net new app development.

That said, cloud native companies, new applications and innovation teams are undoubtedly 100% focused on serverless best practices and it’s exciting to see what efficiencies in applications will exist later this year and into 2020.

Cloud governance is heating up

The organizations that we’ve been working with are improving their ability to de-risk cloud migrations and containing costs. The next logical step operationally is to go proactive and protect against ungoverned cloud use and security vulnerabilities.

I see that taking shape in its most basic form as global visibility and basic policy enforcement. For a lot of organizations this would be a breath of fresh air. It’s surprising how few companies know who is using the cloud and what is deployed. That’s the first place to start.

After that, we need to secure cloud deployments, govern access and a whole host of other security best practices. This has already been a focus for most IT and security teams, however I predict more executive support and resources being poured out in this direction.

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Closing thoughts

The cloud is still a bit of the wild west. Terminology still isn’t clear. Expertise is lacking. That said I talk to brilliant teams all the time that have somehow made sense of this chaos and are doing some pretty innovative things. Necessity is the mother of invention and corporate need for change is driving all sorts of innovation.

These are exciting times. I can’t wait to see what you build along your cloud journey. Here’s to an innovative 2020!

For more details on the cloud management market, be sure to access your complimentary copy of the new 2020 Gartner Magic Quadrant for Cloud Management Platforms.

[1] Gartner, “Magic Quadrant for Cloud Management Platforms” by Dennis Smith, Sanjit Ganguli, Padraig Byrne. February 13, 2020

Topics: Hybrid Cloud Cloud Market