The new year is upon us, and there is no indication that the pace of change in the technology and business worlds will slow down. Here are some of my predictions for what to expect for cloud, data and storage in 2019.
Google Cloud will make a big play for No. 2
As the third-place contestant in the battle for public cloud dominance, Google will need to do something to overtake Microsoft Azure at No. 2 (Let’s be real: Amazon still has a pretty solid lock on No. 1). This won’t be easy, since Microsoft has a huge built-in advantage with its established customer base of server and software buyers, and the number of new Azure users continues to grow at a faster rate than the number of new AWS users. It’s almost as if Microsoft was predestined to be the No. 2 player in the public cloud game.
To thwart that destiny, Google will have to do something big — an all-in bet to acquire enterprise customer footprint and sales expertise.
This big play has to come from inorganic growth – M&A – since it is unlikely that the company will organically develop a game-changing technology next year. Google has certainly made big acquisitions in the past (Google’s acquisitions of DoubleClick in 2008 and Motorola Mobility in 2011 for examples of successful and not-so-successful buys) and it has made at least one major game-changing purchase when it bought Android way back in 2005 for a mere $50 million.
I can’t predict what Google might buy, or even whether it will happen in 2019. But I can’t imagine Google is happy staying in third place. Moreover, given the size of its war chest, it’s hard to imagine anything in particular being off the table or too large to swallow.
The edge: Metro clouds and containerized data centers
The concept of the metro cloud is making a comeback, after its last peak nearly six years ago. While the cloud titans continue to concentrate cloud data centers in the Pacific Northwest or the greater Mid-Atlantic, the need for low latency and the growing adoption of edge computing applications such as the Internet of Things has sparked a resurgence in the popularity of smaller cloud providers with data centers located in the user’s metro area. We announced a partnership with Denver-based CSP Faction in April, and there are many other metro cloud providers that have sprung up recently.
Another interesting edge trend is the growing popularity of the containerized data center. No, this isn’t containers as “Docker,” but containers as in “trucks.” In scenarios where real estate is limited, the vendor installs racks into a shipping container along with cooling and power controls to give the customer a small data center that can be placed almost anywhere. Think of it as a “colo in a box” or “cloud in a box.” Vapor IO, founded in 2015, is one of the more active players in this new and rapidly growing market. Here in the Boston area, cell tower operator SBA Communications announced in November that it was partnering with Packet to place its first containerized data center at the base of its tower in Foxborough (home of the Patriots and the Revolution) to meet the growing demand for edge computing services.
The demand for both metro clouds and containerized data centers will grow rapidly in 2019, and we will start to see more major players making moves into these markets, as we saw with Amazon EC2’s bare metal offering.
The data backup market is ripe for M&A or even IPO activity, and we will probably see action in both of those areas in 2019. The investment furor for new storage startups has died down, and many of the survivors in secondary storage will face the decision of whether to go public or find an acquirer. There are an awful lot of well-funded growth companies in the space, and usually, the market will provide IPO exits for one or two. Interestingly, there are a number of legacy technology companies like Commvault and Veeam with the potential to lose market share to companies with integrated hardware and software products like Cohesity and Rubrik. Finally, a lot of these new players are rapidly burning through venture money and will to need an IPO to raise cash soon. How much M&A pressure all this will put on any of these companies is a guess, but my guess is that it will be strong enough to force some of them into a marriage of convenience.
Hanging over all of the action in the backup market is the news that Dell will once again become a public company. With its publicly traded stock as currency, Dell will likely begin shopping for companies in a way it hasn’t done since before it went private. Since the Dell/EMC products in the space are the epitome of “legacy,” it’s easy to envision that we might see a return to the M&A market in a big way for Dell Technologies. If it’s not in backup, it could be in any number of markets that are strategic to them going forward.
However 2019 shapes up, it’s definitely going to be a year of transformation for cloud, the edge and data storage.
Interested in reading more “edgy” content? Take a look at our blog, “Why IT Needs to Prepare for Life on the Edge”, or experience the power of edge computing firsthand by signing up for a free demo of the ClearSky service.