Subscribe to CIO Magazine »

Where is cloud computing heading in 2014?

Microsoft and Amazon Web Services to become one of the greatest head-to-head competitors for 2014, says Gartner’s Michael Warrilow
Where is cloud computing heading in 2014?

Private and hybrid cloud models, IT departments acting as cloud brokers, more competition among providers and a maturity in services is where 'as-a-service' computing is heading in 2014, say analysts.

Michael Warrilow, research director at Gartner, says more enterprises will look to use public and hybrid cloud models next year as they realise “it’s impossible to private cloud everything”.

“We will see ever-more public cloud adoption … public [cloud] is probably going to be 70 to 80 per cent of cloud workloads,” he says.

“It is hard work to private cloud everything. You have got to be like a cloud provider but you have also got to be like traditional IT as well. So you have got to do security, service delivery, etc. People will be too ambitious. We think they should only target private cloud for the most important and relevant workloads.”

Read: Coles’ hybrid cloud to save ‘millions’ of dollars, speed up project delivery.

Telsyte analyst Rodney Gedda also says the hybrid model will take off next year as it alleviates the need for IT groups to manage their company's entire IT infrastructure.

“The hybrid model will still play for a lot of enterprises. Most enterprises are still deploying infrastructure on premise and have existing investment on premise. So being able to augment that a bit better is what we will see in 2014.”

Infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) adoption is expected to increase next year, says IBRS advisor Wissam Raffoul. Companies will use software-as-a-service providers for their standard applications such as email, while IaaS will be used for legacy applications, he says.

He adds that as more IT organisations shift to the public and hybrid cloud model, they will need to enforce strict governance when negotiating contracts, and selecting and managing multiple providers.

Warrilow says there’s a trend where IT departments act as brokers of cloud services, which will continue through to next year.

Read: CIOs need to be brokers of technology: CA boss.

“IT departments become less of the provider and more of the broker. Amazon, for example, really doesn’t want to do that; they don’t really want to talk to people, they want to take credit cards and deliver low cost infrastructure. So they are not really in the managed services business," he says.

“That’s a role for the local players to fill in. I’m curiously watching Melbourne IT that is now offering services to manage Amazon. You’ll see more of that start to take place next year.”

Warrilow adds that competition between Microsoft and Amazon Web services will be fierce next year.

“2014 will be the year Amazon will no longer have it largely to themselves … Microsoft is shaping up as one of the most competitive threats to Amazon globally," he says.

"Microsoft has announced their plans to come here next year with Azure, and I expect that will happen in the first half of the year. I think the big thing in Australia will be increasing choice and increasing competition.”

However, due to revelations of government spying by the National Security Agency in the US, more organisations may lean more towards local cloud players, rather than global companies like Amazon and Microsoft.

“If you go with an Australian-owned company that only operates in Australia, there’s more legal protection and control, you are not likely to wade into international legal risks. It doesn’t mean that you are not going to get snooped on, but it may appeal to Australian companies to stay with an Australian player.”

Telsyte's Gedda adds that we can expect to see security and privacy as a key theme around the cloud next year. He says it won’t be a deal breaker, but organisations will certainly look at keeping their sensitive data onshore under Australian jurisdictions.

2014 will also bring about a mobile-cloud paradigm, where cloud services are managed via mobile devices, Gedda says.

“I think the ability to take control of cloud services from any device is something that will mature in 2014, become more of a mainstream thing.”

Tim Sheedy, Forrester analyst, says the good thing for CIOs next year is that cloud offerings will finally start to really mean cloud and not another version of outsourcing. So instead of having to sign up to three- to five-year contracts, more providers will mature their services and allow for flexibility in scaling up and down, he said.

“That’s one of the issues of cloud in the past where this term ‘cloud washing’, where we are not going to use the world hosting anymore, we are going to use the word cloud," he says.

"So with service providers starting to move towards what is truly a cloud-based service I think there will be more trust in the term which means as an IT shop you know what you are going to get.

"Your cost could go down if your usage goes down, which is ultimately – from an infrastructure, back end perspective – is what you are looking for.”

Follow Rebecca Merrett on Twitter: @Rebecca_Merrett

Other trends to watch out for in 2014:

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: Amazon, Gartner, IBRS, Melbourne IT, Microsoft, National Security Agency, Telsyte
References show all


Ulf Mattsson


I agree that "we can expect to see security and privacy as a key theme around the cloud next year" and "organisations will certainly look at keeping their sensitive data onshore under Australian jurisdictions".

It is interesting to see how organizations are desperately looking for effective ways to comply to new stringent privacy regulations when offshoring data.

I reviewed an interesting offshoring project in Europe that addressed the challenge to protect sensitive information about individuals in a way that will satisfy European Cross Border Data Security requirements. This included incoming source data from various European banking entities, and existing data within those systems, which would be consolidated in one European country.

The project achieved targeted compliance with EU Cross Border Data Security laws, Datenschutzgesetz 2000 - DSG 2000 in Austria, and Bundesdatenschutzgesetz in Germany by using a data tokenization approach, protecting the data before sending and storing it in the cloud.

I recently read an interesting report from the Aberdeen Group that revealed that "Over the last 12 months, tokenization users had 50% fewer security-related incidents(e.g., unauthorized access, data loss or data exposure than tokenization non-users". Nearly half of the respondents (47%) are currently using tokenization for something other than cardholder data The name of the study, released a few months ago, is "Tokenization Gets Traction".

Aberdeen has also seen "a steady increase in enterprise use of tokenization as an alternative to encryption for protecting sensitive data".

Ulf Mattsson, CTO Protegrity

Comments are now closed.
Related Coverage
Related Whitepapers
Latest Stories
Community Comments
Tags: Gartner, Michael Warrilow, cloud computing, tech tredns 2014
Latest Blog Posts
  • Empowering Modern Finance - The CFO as Technology Evangelist
    The CFO as Technology Evangelist is a research report commissioned by Oracle and Accenture, in collaboration with Longitude Research, that explores how modern CFOs and finance executives are adopting emerging technologies within their finance functions to enable the development of new capabilities and to transform the role of finance.
    Learn more »
  • Oracle Fusion Financials Cloud Service
    Modern organizations are under intense pressure to provide accurate, reliable, and speedy financial information to business decision-makers. Furthermore, complying with global standards has become more of a headache than ever before. How do you know if financial management in the cloud is right for you? This data sheet takes an inside look at Oracle Fusion Financials Cloud Service, exploring key product features as well as financial management benefits your organization can realize quickly, including: Lower transaction processing costs and fewer data entry errors; Automated financial processing; Effective management control; Real-time visibility to financial results; Improved compliance; and more Get everything you need to meet financial compliance and improve your bottom line.
    Learn more »
  • ERP Selection: Finding the Right Fit
    Finding a needle in a hay stack is hard, but the task pales in comparison to finding a specific needle in a pile of needles. Selecting the ideal Enterprise Resource Planning (ERP) solution can feel just as daunting. ERP represents a serious investment for any organisation and is vital to future success. This report explores the strategies organisations are employing to find the right ERP fit that will give them the tools they need to thrive.
    Learn more »
All whitepapers
rhs_login_lockGet exclusive access to Invitation only events CIO, reports & analysis.
Salary Calculator

Supplied by

View the full Peoplebank ICT Salary & Employment Index