Nathan Biggs (@nathanbiggs), CEO
They say that hindsight is 2020. Well, this is the only year we can also say that foresight is 2020 too (ha ha, I am sure I am the only one laughing).
2019 was an exciting year for House of Brick, and our ever-growing base of diverse clients. I thought that I would share some of the insights that I have gained from discussing strategy with our clients, regarding what we see coming in 2020 for enterprise applications, particularly related to cloud computing.
Cloud adoption for enterprise applications will grow, but slowly
While the use of cloud infrastructure for new application development has become fairly standard, especially for startup ventures, the migration of business-critical enterprise applications to the cloud has been decidedly lagging. The primary cloud lever that our client base has experienced has been in the adoption of SaaS-based enterprise applications, such as Salesforce, and Workday. Nearly every one of our clients is talking about cloud adoption at some level, and many are conducting proofs-of-concept, and early-stage trials. For the most part however, critical enterprise applications are staying on-premises. Yet, where we anticipate the most near-term cloud growth is in a decidedly hybrid strategy.
Hybrid cloud will be key to long-term enterprise cloud strategies
In her article on Seeking Alpha, Beth Kindig proposed that the reason that AWS lost the $10 billion federal government JEDI cloud contract to Microsoft was not interference from the president, but rather that Microsoft was much better prepared to handle hybrid cloud computing compared to AWS. While I am not familiar enough with Azure’s hybrid capabilities, compared to those of AWS, to comment on the viability of that claim, I have learned from our work with clients that moving enterprise applications into the cloud does not happen all at once, but rather by executing a focused hybrid strategy. The first movers for enterprise application stacks to the cloud are coming from application development and disaster recovery implementations. Development and DR are well-suited to capitalize on the advantages offered by the cloud, including lower infrastructure investment, rapid deployment, and pay as you use. Leveraging the cloud for these components is also relatively low impact compared to the remainder of the organization’s enterprise application environment. A major concern however, is the impact of vendor licensing on cloud usage.
Software vendor licensing practices will get more onerous in the cloud, not less
Major enterprise application vendors in the industry, including Oracle, Microsoft, and IBM, all have their own cloud offerings that they are trying to promote. Oracle and Microsoft have been especially aggressive in establishing practices and policies that limit an organization’s choice in provider selection when developing their cloud strategy. We anticipate that Oracle will continue their pattern of aggressive auditing (I know…that prediction is not much of a stretch). The favorable (if only preliminary) court ruling late last year on the class action case regarding their predatory audit practices, will likely embolden Oracle to continue using tactics that have worked for them in the past. Microsoft also made policy and license changes late last year that limit customers’ flexibility in non-Azure cloud environments, especially when it comes to their Disaster Recovery and High Availability strategies.
All of these factors point to the need for deliberate and careful development of your enterprise cloud strategy. And as such, using services and tools that help you avoid pitfalls and roadblocks becomes even more critical.
Cloud compliance and governance are critical to cloud success
As our clients develop their enterprise cloud strategies, ensuring compliance not only with vendor licenses, but also with regulatory requirements and organizational parameters, will be a key measure of success. Our clients for whom a cloud strategy is an effective competitive advantage will be those who develop, and adhere to, a solid plan for cloud compliance and governance.
We continue to see the significant impact effective compliance strategies have on our clients’ bottom line. Increasingly, clients who rely on our expertise and software tools to assess and monitor their Oracle and Microsoft compliance in hybrid cloud environments, share their appreciation and gratitude when we save them tens (if not hundreds) of millions of dollars of unintended (or too often unjustified and inaccurate) license compliance fees.
2020 Will be an exciting year for House of Brick and our clients
We are eager to explore the opportunities and challenges we see on the horizon in 2020. We are developing some innovative services and tools, which we will be sharing with our client community in the coming months. No matter where 2020 takes the industry, House of Brick will be there to help ensure that our clients are supported and protected from the dangers that lurk on their path to success.