Cloud computing is dead

Isn’t that what you say when something is no longer growing in popularity?

Visiting the grandly named Cloud Computing World Forum in London (in reality a cloud computing exhibition) this week confirmed my suspicions. It was a much smaller show than previous years, relegated to the 1st floor of Earl’s Court, and noticeable only for the lack of innovation and energy from a topic that was supposed to be the next big thing in computing.

A quick check of Google Insights confirms this. Since mid-2011, interest in cloud computing has been falling.

But why?

Why is it that a technology which was supposed to disrupt the very fabric of computing and change the way enterprises work be falling in interest?

The answer I’m afraid is incredibly mundane, it is because the hype bubble has been punctured. Not with a big ‘POP’ but a slow puncture.

After years of hyperbole and overselling, cloud computing has been called to account and brought into the real world with a bump. The era of cloud hype is well and truly over.

So does this mean that cloud doesn’t matter, that cloud is not real and it will all go away?

No. Quite the opposite.

In a hype, life is good; there are no problems that cannot be resolved, no challenge that cannot be addressed. New pure play companies enter the market quickly and established leaders, bundled with legacy technology and old ways of working (but also profits, trust and experience) are prematurely dismissed as outdated.

Then reality hits.

And this is where we are today, in the post-hype phase.

We know that:

  • Cloud computing isn’t right for all circumstances
  • Security challenges remain
  • Legal and contract issues are more complex than we thought
  • When you do the math, the savings are not as big as we first though

But … despite all of this, there are very real benefits. None of the issues are insurmountable.

So whilst cloud is not a panacea (it never was), if we address the issues cloud can deliver real benefits.

So, we are now entering the era that cloud WILL disrupt companies.

This post-hype phase is when the real change happens. It is now when disruption really starts.

Three forces now come together to make change possible:

  1. Suppliers and buyers are more informed and are working to address the known challenges of cloud. Products evolve that are practically usable inside enterprises (and don’t circumvent security or compliance rules). Products are developed that better address the needs of enterprises and deliver on the promises made, and finally better management tools emerge. Perhaps the total benefits will be less than we were originally expected, but the savings and benefits are there. With these blockers now removed, enterprises are now able to implement these technologies into their organisations.  As cloud suppliers have matured, gained access to supplier lists, passed financial diligence checks and completed proof of concepts we get down to business.
  2. Another change that has happened is that the old world suppliers, the ones from the pre-cloud era – the ones that enterprises actually run their businesses on – have adapted their products and services to better embrace cloud principles. Many will be evolutionary, rather than revolutionary products – but for business customers, that is exactly what they want. Safe, secure products that deliver more value, hopefully at lower cost, from suppliers they know and trust – and have experience in managing.
  3. The final piece of the jigsaw is that companies IT departments are now thinking about how to implement cloud based products and technologies are are adapting and evolving strategies, roadmaps and service visions to be cloud compatible.

Together these three bring create an environment where change can happen, and this is why the post-hype era is the one that brings the disruption.

How will you know that we are in this phase?

  1. Cloud suppliers will start to win major contracts. Having worked through procurement hell, companies are finally signing contracts. Revenue growth may have slowed, but the contract value is increasing. Cloud is now set as a default by traditionally conservative organisations (e.g. US Federal Government)
  2. Cloud companies that have shown an ability to grow are being acquired by old world suppliers that have failed to successfully developed cloud products quickly enough internally (SAP – Ariba and SuccessFactors, Oracle – Rightnow, Taleo, Vitrue, Microsoft – Yammer)
  3. And the final one … attendance at Cloud Shows and exhibitions falls, because it is now just part of business as usual.

So the era of hype for cloud computing is dead.

The era of cloud truly disrupting companies … this is only just beginning.



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