With 2019 is coming to a close I thought I would take a few moments to reflect on the predictions I laid out in my blogs last year, reflect on the progress in 2019 and delve into what might lie ahead in 2020.
For your reference my 2019 prediction blogs are here 2019 Trends I’m watching – Part I and here 2019 Trends I’m Watching – Part II
So let’s jump in! Here are the trends I touched on in 2019 with updates on what transpired (from my point of view of course).
- OSS (Open Source) business and revenue models are changing –
- While the IBM acquisition of Red Hat closed on July 2019 we will see their business models combine in 2020. If I had to predict what it might be I would suggest we will see an expanded sales effort (net new and renewals), a broadened services portfolio for managed Linux services and even tighter integration of IBM’s remaining HW platforms to RHEL. In addition I could imagine IBM SoftLayer extending its reach and offerings with full integration of CloudForms and OpenShift.
- Public Clouds continue to leverage open source as a strong foundation for the revenue growth of their managed services and this will continue in 2020. In 2019 we saw increased discussion around the original intent and the future of open source specifically with respect to public cloud monetization. Personally, the most interesting part of this for me is the reality that community open source has proven to be a tremendous method for driving community based development. That being said, what was missing was enterprise class services and support to give large organizations the confidence to rely on it. Although there is still work to be done with respect to the licensing and revenue sharing models I do think that this trend is positive for both open source developers and the managed services provider space and would expect to mature through 2020.
- Public Cloud Application Architecture battling between “Open and Flexible” vs. “Accelerated Time to Value” – Clearly this battle is still raging with the big 3 cloud providers continuing to expand their arsenal of native cloud based services while platform vendors amplify their “multi-cloud” messaging. So where do we end up on this debate? Well, here is what I am seeing –
- Enterprise customers want simplicity and agility; the power to architect, deploy, run and support their new applications wherever they run best with respect to performance, reliability, simplicity (overhead) and cost.
- Large enterprises are very comfortable consuming resources from multiple SaaS providers and public cloud providers
- Traditional System Integrators and Managed Services Providers have carved out a niche delivering “turn-key” offerings that span hardware, platforms and applications both within their own data center
- The simplicity of native cloud services makes it a great platform for building out MVPs (Minimally Viable Products) for next generation applications.
- Once these “new” platforms have proven their value and are ready to promoted into full scale production architecture can and is being revisited and adapted to deliver production grade services (performance, reliability, security) and a predictable cost
- I would expect this trend to continue in 2020 with enterprises accelerating innovation on native cloud platforms and services. I also see them consolidating their SaaS and Public Cloud platforms where it makes sense
- At the control plane layer I would expect enterprises to leverage the native control planes of these various platforms and even build specialized teams around them (i.e. AWS team, Azure Team, GCP Team)
- Of course there is an opportunity to simplify this multi-cloud environment but I do not believe it will be “one console to rule them all”. Instead, in 2020, I would expect to see technology companies offering “data plane” services that extend across all platforms (security, analytics, data protection, etc…) as well as API support for simple management and orchestration from all players. Infrastructure-as-code driven by well documented APIs will also continue to simplify multi-cloud over time
- The Cloud is maturing (Private, Hybrid and Public)….The Hardware market is growing fast and differentiation is coming down to software – This trend continues into 2020.
- In fact, when we boil down one of the hottest trends in 2019, investment in data center operations grew, and with it, converged and hyper-converged infrastructure platforms accelerated. Why? INTEGRATION and SIMPLICITY. Organizations are fed up with the technical debt from traditional hardware platforms both in terms of the “day to day” operations but also the integration of platforms like VMware, Kubernetes, traditional application platforms like SQL, SAP and Oracle and emerging platforms in streaming and log analytics
- With all of the innovation over the last few decades both compute and networking have become dramatically simpler to operate. Unfortunately, legacy storage platforms continue to be monolithic, complex and inflexible. With the growing volume, velocity and variety of data there is definitely an opportunity for modern players to continue their disruption of the traditional storage market. (Full disclosure – I believe in this with such conviction I joined Pure Storage in Feb 2019 where I currently run our global Systems Engineering organization.)
- In 2020, we will see continued growth in this trend of “simplification” with modern hardware players leveraging innovative software to dramatically simplify day-to-day operations, offer tighter integration to application platforms (like VMware and Kubernetes), non-disruptive upgrades/migrations, public cloud compatible data services and flexible consumption models across CapEx, OpEX and “as-a-service”
- Enterprise Application software vendors continue to acquire across the CI/CD, Analytics and AI space to drive revenue growth and simplify integration for customers – This trend definitely continued in 2019 with some landmark deals buy large companies; some of the most notable –
- VMware buying Bitnami, Pivotal and Carbon Black
- Splunk buying SignalFx
- Salesforce buying Tableau and ClickSoftware
- Google buying Looker and Elastifile
- PayPal buying Honey
- WorkDay buying Scout
- Looking to 2020 I would expect an acceleration in M&A activity specifically “tuck-in” acquisitions that allow traditional platform players to better aggregate, analyze and visualize data within the respective platform. I also believe we will also see some major acquisitions by traditional HW companies looking to further simplify the management, orchestration and protection of their data across traditional VMware, Containers within the data center and out to the public cloud
- Virtual / Digital Assistants (Alexa, Siri, Google) are evolving and maturing quickly and showing strong potential for enterprise application. In 2019, we continued to see widespread adoption of digital assistants within the consumer space with well over 3.25B in use today and 8B expected by 2023. While there are definitely some privacy concerns to iron out it’s clear that the convenience of digital assistants in our cars and our homes are here to stay
- In 2020, for the consumer world I would predict digital assistants extending their reach into augmented reality leveraging phones and tablets as an interface. This capability would allow consumers the potential to ask “what if” questions and advertisers the ability to market goods (furniture, clothing, cars, vacations) in a much more personalized way. I can also see the potential for gaming to start leveraging AR to drive a “next level” experience
- For the enterprise, I would predict in 2020 we will start to see the integration of digital assistants, drones and augmented reality in specialized industries delivering a broad, searchable knowledge base with optical guidance. Manufacturing, healthcare, heavy machine maintenance and Oil and Gas are prime candidates for these solutions given their complexity and the cost of errors
- Digital Transformation evolved from an “Initiative” to a “Mindset” with enterprise realizing that their traditional business and their digital business initiatives need to be seamless and that the tighter they can integrate the two the more value they can unlock. To put it simply, it’s no longer about whether you have 2-3 digital initiatives it’s about how a company’s digital initiatives are driving revenue growth, cost reductions or risk mitigation across the entire business. With respect to 2020 I would predict focus on the following digital business initiatives –
- 5G takes flight and drives edge computing momentum – Lots of enthusiasm for the increase in speed and lower latency offered by 5G and it’s potential to bring the promise of edge connectivity to life! While it will take several years for platforms and applications to mature at the edge 2020 will be a big year for us to really start driving edge-core-cloud architecture conversations and piloting edge computing projects. I also predict a new surge of programming frameworks and developers focused on “edge platforms” and “edge marketplaces”. Of course, with these benefits and opportunities at the edge comes a new era of security threats tied to the wider attack vector.
- Network Effect accelerates ML and AI – Network effect is defined as “a phenomenon whereby a product or service gains additional value as more people use it”. Over the last several decades many of the most valuable startups have leveraged network effect as an advantage over traditional players (Uber, Waze, Facebook, Netflix, Amazon). With connectivity to assets and consumers beyond the point of purchase these companies gather tremendous insights into their products and the behaviour of their consumers. In turn, they leverage these insights to improve their platform and market additional services. Network effect is a proven amplifier and accelerator. It also is a major enabler of data that powers machine learning bringing real artificial intelligence to life. In 2020 I would expect every company to be looking for ways to extend their reach beyond the point-of-purchase and integrate the network effect into their businesses.
- Compliance rules get stricter and fines get larger – In 2019 we all saw GDPR finally come to light and with it some high profile fines to companies like Google, Marriott and British Airways. As of Jan 1, 2020 the CCPA (California Consumer Privacy Act comes into effect. While not as strict as GDPR CCPA will be the likely be the first of many that hold companies accountable for how they manage data. In addition I would expect to see end-to-end encryption become ubiquitous to minimize the financial and corporate risk of security breaches. Once again, huge opportunity here for SaaS and Platform vendors to leverage this reality to differentiate themselves with stronger encryption offerings and greater visibility and audit into the lifecycle of data within their platforms.
2020 promises to be an exciting year….I can’t wait to get started!
One thought on “2020 – Predictions and Reflections”
Always interesting to see your thoughts and views, Shawn. For this set, I am going to have to re-read them for comprehension in the morning after my initial Mountain Dew. Lots-o-techtalk that is interesting, but at my level I find my concentration ebbed too soon! There is just too much damned good stuff in here not to go back for further awareness for any of us still in this field and cutting out our living in it.