Cloud

From Ford to Tesla: Lessons in Cloud Adoption

The path towards enterprise cloud adoption resembles the 20th century's horses-to-hyperloop evolution. Explore the similarities in the journeys with IDC's Chris Kanthan.
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About a century before Uber and Lyft, there were 120,000 horses in New York City, and the average New Yorker hailed three hundred horse carriage rides per year. Then came the era of automobiles, which revolutionized transportation and even got rid of horse manure – a massive problem at the time. However, the euphoria of gas-guzzling cars lasted only a few decades before congestion, pollution, accidents, and concerns about climate change catalyzed the next transformational ideas – electric vehicles, drones, and hyperloop. This horses-to-hyperloop narrative is analogous to the migration of applications from traditional datacenters to the cloud.

Learning About Cloud Adoption Through Car Adoption

Let us take a quick look at what mass adoption of automobiles required. First, there needed to be standardization of cars – if you could drive a Ford, you should be able to drive a GM. Thanks to Henry Ford, car manufacturers developed highly efficient assembly lines that could churn out cars like burgers.

Then, consumers needed to be trained and licensed on how to drive cars – it was not quite the same as riding a horse. New infrastructure was also critical – gas stations, paved roads, and interstate highways played vital roles in the proliferation of autos. Ubiquitous car dealerships and novel financial tools played pivotal roles in sales and marketing of autos.

And when cars had problems, people needed convenient access to reliable repair shops and auto parts stores. Then came numerous laws regarding speed limits, seat belts etc. Finally, a vibrant ecosystem developed around the car culture – diners on highways to serve truckers, drive-in movie theaters, drive-thru restaurants, and so on.

All these above-mentioned developments can be mapped to cloud adoption. The standardization among cloud services involve cloud native applications that are built using infrastructure-agnostic technologies such as open-source platforms, containers, orchestration tools such as Kubernetes, and common APIs. Write once, run anywhere is the gold standard for developers.

As enterprises adopt the multicloud model, interoperability of applications becomes indispensable. Enterprises understand these tenets of digital transformation. That is why, as IDC’s Cloud Pulse survey (Q4 2020) shows, 38% of enterprise spending on cloud compute goes to containers and serverless computing.

The “assembly line” in a modern enterprise is exemplified by DevOps best practices, which greatly reduce the time for development, testing, and deployment of new applications. Loosely coupled teams can work independently on different aspects of a project, while automation and continuous feedback speed up the entire pipeline. Eschewing traditional approaches, DevOps can release updates and fixes for applications weekly or even daily, rather than waiting for months.

Modular application architecture and microservices provide agility and flexibility needed for rapid innovation. Low-code and no-code platforms that simplify application development will also become increasingly more popular. Competitive advantage is an existential need – if your competitor is offering Ford Model T, you cannot be marketing horse and buggy. As IDC’s Cloud Pulse survey (Q1 2020) reveals, the top business goal of cloud customers is to innovate new products and services, and the #3 goal is to deliver digital products.

Cloud Adoption in Action

Recently, Amazon announced a visionary goal to educate 29 million people worldwide on cloud computing over the next five years. Such efforts to democratize knowledge and expertise are fundamental for the success of digital economy. Like driving schools for cars, we need plenty of cloud schools. At the enterprise level, corporations are still struggling with the cloud-related skills gap. In IDC’s Cloud Pulse survey (Q1 2020), only 45% of cloud customers rated themselves high – 5 on a scale of 1 to 5 – on cloud familiarity.

Infrastructure – for both cloud vendors and customers – is the linchpin of cloud adoption. On one hand, datacenters need adequately powerful servers, storage, and network to handle the exponential increase in workloads. On the other hand, just like interstate highways, big fat pipelines of fiber-optic cables and 5G networks are essential for movement of data, the lifeblood of digital economy.

Of course, such a behemoth needs highly sophisticated software for efficient and economic operations. Thus, it is no wonder that spending on cloud infrastructure and services are growing rapidly. Insights from IDC Cloud Pulse survey (Q4 2020) confirm this phenomenon – for example, 80% of large enterprises spend more than $1M per year on public and private clouds.

Just like speed limits and smog checks, cloud security and compliance do not sound exciting, but are imperatives that every enterprise must focus on. Migrating applications from traditional datacenters with perimeter control to the relatively open cloud requires new paradigms of security and governance. Data sovereignty regulations and privacy rules become very complicated when enterprises have employees, partners, and customers all over the world. Thus, it is not surprising that cybersecurity is the #1 factor that influences customers’ selection of cloud management software and services (IDC Cloud Pulse Q1 2020)

The extensive ecosystem around cloud technologies play a critical role in the latter’s adoption. From managed service providers and ISV’s to systems integrators and startups, there are numerous niche players that offer extraordinary products and services to drive widespread adoption of cloud. In IDC Cloud Pulse Q3 2020, we found that the overall ratings of cloud vendors were noticeably influenced by the performance of their technology partners.

What’s Next

Henry Ford would certainly be astonished by Tesla’s Gigafactory, where robots assemble cars that are battery-powered and self-driving. While that Ford-to-Tesla transformation took a century, the next-generation cloud is just around the corner. Just like autonomous vehicles, the future cloud will be intelligent and autonomous, thanks to AIOps. AI/ML will be deployed for security, performance fine-tuning, provisioning, predictive maintenance, customer support, and even coding. Robots in datacenters will be installing and replacing hardware.

The next-gen cloud will also be greatly distributed, thanks to the rise of edge computing, smart cities, and IoT. Such an “everywhere cloud” will be connected by a robust network with massive bandwidth and ultra-low latency. Eventually we will get very close to a hybrid multicloud model, the Holy Grail of cloud computing. Far into the future, quantum computing will be leveraged for enterprise applications – and that would be the hyperloop of cloud computing.

Want to learn more about the future of cloud and cloud adoption? Explore the most recent results of IDC’s Cloud Pulse study further:

Chris Kanthan

Research Manager, Cloud BuyerView