4 Trends That Will Change How Companies Invest in Cloud in 2018

The cloud is forever changing how we look at IT. Over the past years, we’ve had a front seat view of how the cloud has evolved and how large companies and industries are changing practices internally toward a response that looks more and more like  the innovation leaders have read about (and that some, mostly in the Valley, seem to assume exists a priori everywhere). The definition of client-server has changed, there are increasing levels of abstraction, and the ability to ship code without caring too much about the server is going mainstream as cloud vendors continue to replace the traditional  IT stack.

After spending a week talking with customers and thousands of IT professionals at AWS re:Invent last November, I had a pretty clear confirmation of what’s next. Software continues to disrupt how companies in most industries do business and cloud computing is now accelerating this trend. In turn, companies will continue to invest in building their software and their own internal set of skills to make it possible.

Cloud skills—today a very broad and expanding set of skills—will be the most important asset for staying competitive in your market.

Let’s take a look at the major trends impacting how companies will invest in the cloud in 2018.

1. Cloud-enabled software is the next big shift in the enterprise

When Werner Vogels announced AWS Lambda at AWS re:Invent 2014, Serverless wasn’t widely known. AWS Lambda was one of many announcements but probably the most important one at the time. Since then, AWS has been shifting from “infrastructure” announcements to software announcements.

AWS was built as a set of primitives that allow a business to use specific resources in the cloud (think of compute with EC2, storage with S3, etc.). This model is now evolving and moving up the stack to provide primitives that are software components. While some cloud vendors are providing a complete software solution, many are creating tools and frameworks that empower new technologies like machine learning, AI, data management, etc.

Public cloud vendors are essentially becoming software vendors. This represents a huge shift in how we think about the role of cloud providers and cloud computing inside an organization. In 2018, I expect this trend to gain even more traction: as more enterprises move their workloads to a public cloud, more will take that next step of using cloud software components and technologies to build new capabilities into their software.

In 2017, Google, AWS, and Azure launched new software on top of their public platforms. By contrast, 2018 will be the year that enterprises deploy new technologies inside their organizations to redefine processes, skills, and speed in response to updates and changes. Companies will need to continue to get better at the process of building and deploying software to remain competitive.

As the cloud becomes more and more about software and primitives that offer new capabilities, this is triggering the need for new skills across the organization.

2. Skills strategy and investments will grow exponentially

How will the enterprise compete in a digital world where software is a key component of products and services? Having the right skills in-house is an essential place to start.

The demand for advanced skills in cloud and software development is already several times larger than the current pool of talent and resources can support. There’s no indication that this gap will shrink in 2018.

Of the leading public cloud vendors, AWS led the pack in 2017 with an average of 3.5 new feature releases per day. Companies that use any AWS, Microsoft Azure, or Google Cloud Platform components in their infrastructure can’t risk development and maintenance delays due to a skill gap. Even more unacceptable to management will be an inability to implement new security services or to deliver on costs.

As a result, companies must be able to keep their teams’ skills up to date to maintain their software and to take advantage of the latest services and technologies that platforms offer.

As skills continue to be a critical asset and as the competition for tech talent continues to heat up, I expect companies to make an even greater investment in building these skills from within and rely less on outsourcing. As we’ve written in a previous post on how to build your tech talent pipeline, investing in existing teams will pave the way for the growth and scale needed tomorrow.

3. Enterprise companies will double down on building their own certification paths

An increasing number of options across the cloud ecosystem has brought increasing complexity for enterprises. Internal requirements for performance and cost savings are driving more and more companies to adopt multi-cloud environments. Doing so allows companies to apply a best tech / best-fit approach that enables flexibility for teams. We see enterprise teams building highly customized environments with specific tool and technology combinations in order to maintain legacy applications, deal with regulatory compliance, and to limit/modify the way their developers and teams consume services on AWS, Azure, or Google.

On top of this, companies are using cloud technologies to build their services and products and frequently have specific requirements for the skills and capabilities that they want on their teams. As cloud environments become more customized, teams will need skills that meet the needs of their business and not necessarily the requirements of a single vendor’s platform.
For these reasons and more, in 2018  we will see companies double down on building their own certification paths that align with specific skill requirements by technology, domain, and job function. (As a result, at Cloud Academy, we’re having a number of conversations about our Content Engine technology, which allows for customized training paths that deliver ongoing training to teams on the precise technologies and tools in the context of their current environments).

4. Enterprise transformation success will boil down to designing and executing a sound, multi-year cloud transformation strategy

When we talk about cloud today, instead of talking about migrations on AWS or Azure and the “right” conditions for migration, the conversation has shifted to defining a cloud transformation strategy. Becoming cloud native and implementing DevOps methodologies are complex operations for most companies, and the changes require both technical and cultural shifts inside an organization. In a 10,000+-person organization, it requires designing a strategy that addresses tools, applications, and culture, and that can scale to support different roles and teams. The C-Suite will be pressured to focus on measurement, and they’ll look for ways to track progress in these areas over time.

We hear it all the time—fundamentally transforming how organizations operate is hard work. Moving to DevOps requires careful planning since the changes touch multiple departments’ people and processes.

In 2018, companies will invest more time and money in the people and tools that support the design and implementation of cloud migration strategies. On the people side of the equation, we will see an effort to consolidate external and internal training solutions into a single solution that supports companies’ full paths to transformation. We’re already seeing companies moving in this direction, and I predict that we will see more companies with their own cloud transformation strategy establish dedicated technical teams to support it.

Cloud Academy