2012 Cloud Computing Predictions from GoGrid Executives, Customers & Partners (Part 2)

January 19th, 2012 by - 6,344 views

A few days ago, I published some 2012 Cloud Computing predictions from Warren Heffelfinger (CEO – GoGrid), James Urquhart (Cloud Writer for GigaOm & VP of Product Strategies at enStratus) and Larry Warnock (CEO of Gazzang). The beginning of any year is critical to not only reflect back on what transpired, but also to gaze into the future to see what is to come. With Cloud Computing, to quote an over-used phrase, “the sky’s the limit” and while there are some similarity within these and the previous predictions, there are also some distinct opinions as to where we are all headed in the cloud.


In this article, I have compiled more insightful predictions from another stellar list of cloud experts, namely:

  • John Keagy (Chairman & Founder – GoGrid)
  • Carson Sweet (CEO – CloudPassage)
  • Antonio Piraino (CTO – ScienceLogic)

Below are their predictions so read on to see how they stack up!

John Keagy (Chairman & Founder – GoGrid)


  1. There will be less use of the word “cloud” generically and more of IaaS, PaaS and SaaS or “cloud infrastructure, cloud platforms, and cloud software.” Folks are starting to understand the difference between and GoGrid / Amazon. In fact, folks that really know IT are starting to cringe at folks that talk about cloud computing without understanding that Salesforce and GoGrid are quite different. We can expect some more specific dialog even from the mainstream media.
  2. More vendors will be called out for “cloud washing.” Duh. No longer can you confuse outsourcing with on-demand.
  3. The market will become more educated to the differences in VMware vs. XEN clouds. XEN offerings will emerge as more differentiated and cost-effective and equally secure.
  4. On-prem / off-prem cloud bursting will be debunked as a primary use case. Although we may actually see cloud bursting in the wild 2012, the network costs and latency will not make it compelling. Lots of pundits will theorize boldly about how great it is from their blogger pulpits but the folks living in reality won’t see success.
  5. Amazon will shine brighter than ever as the beacon of the future of computing. Thank goodness for Amazon. They are defining a new future and giving it credibility. Trouble is, other than GoGrid, no other service provider takes responsibility for building the technology of the future. And cloud = service. Hmmm.

Carson Sweet (CEO – CloudPassage/GoGrid Partner)

  1. Delivery of SaaS via virtual appliance (a.k.a. privately hosted cloud instances) will take hold.
    As mid-market and large enterprises consider the pros and cons of IaaS, PaaS and SaaS, a large contingent with be dis-satisfied with the level of transparency and control provided by SaaS providers. At the same time, they will seek the ease of ownership, instant access and low effort offered by SaaS. Concerns about multi-tenancy will also continue to hold back a large contingent of potential cloud users, especially for more sensitive applications. Software delivery using hosted virtual appliances will strike an attractive balance for these potential users, offering on-demand access and scale while delivering superior control and reducing concerns about multi-tenancy. The demand for virtual appliance software delivery will drive IaaS providers to migrate towards (but not into) a PaaS model. Conversely, SaaS and PaaS providers will offer more flexibility and control over how their service offerings are deployed.
  2. IaaS services will continue to coalesce around combinations of managed hardware, pure cloud infrastructure, and in-line access to software and services.
    As cloud deployments continue to grow, large cloud enterprises will hit scalability issues. IaaS providers will suffer migrations from the cloud back to collocated hardware, and IaaS providers will respond to protect the large enterprise business. Established infrastructure providers will leverage their legacies of large-scale, heterogeneous infrastructure management to offer access to combinations of multi-tenant cloud, dedicated private cloud, and traditional collocated hardware environments. Through acquisition or heavy investment in R&D, providers will leverage highly automated virtual infrastructure provisioning and delivery. The most successful will deliver a very wide variety of cloud infrastructure and virtual appliance services in a high-margin, self-service format. This will enable them to retain large-scale cloud enterprises while continuing to capture the large population of self-service, mid-market/business unit customers in a self-service approach. As the total field of cloud-hosted SaaS and consumer startups grows dramatically, IaaS providers’ ability to capture and service smaller customers at scale and grow some portion into hybrid hardware/software cloud environments will be a differentiation and competitive advantage.
  3. IaaS providers will seek to differentiate and diversify to become “one-stop-shops”, and some will reach the critical mass needed to capture the emerging large-enterprise cloud services market.
    IaaS providers will seek to differentiate through partnership ecosystems that allow customers integrated access to supporting services (e.g. security, domain naming services, directory services) and application deployments (e.g. WordPress, Hadoop, Apache). The best providers will offer integrated orchestration of infrastructure, supporting services and applications (e.g. RightScale, Chef, Puppet). Providers will quickly move to increase market penetration and retention through the addition of integration, customization, training and management services. Some providers will establish stronger positions in vertical markets by packaging infrastructure, services and software to meet the needs of specific industries (e.g. regulatory requirements, specialized computing use cases, workload variability). Those providers that build the critical mass needed to obtain and retain cloud infrastructure services with large enterprises will become dominant market players; others will follow with focus on the mid-markets, and will rely more heavily on cloud broker / aggregation channels.

Antonio Piraino (CTO – ScienceLogic/GoGrid Customer)


  1. Cloud management rules – Logistics usually trump management when it comes to new technologies, and the cloud is no different. Now that cloud providers have brought their platforms to market, having visibility into and control of those cloud resources will be paramount in 2012: A centralized view into performance across physical, virtual and cloud-based resources is a requirement for delivering optimal business services.
  2. Security gets serious – Security breaches are nothing new but in 2012, cloud’s relative immaturity and high profile will likely motivate a serious attack. The silver lining will be that cloud computing service providers and their customers will come away stronger. Security and disaster recovery plans will be taken more seriously.
  3. Acquisitions will be horizontal – Acquisitions in 2012 will be based more on the technologies needed to round out portfolios rather than simply buying smaller firms to boost market share. Look for telcos, social media firms, large system integrators and managed service providers to partner or buy out the cloud onramp providers, orchestration technologies, security technologies and IT monitoring/management firms.
  4. Cloud defies the laws of demand – Cloud will act as a “Giffen Good” in 2012, meaning that people will consume more of it even as the price rises. Lower budgets make cloud’s ability to break down costs into smaller increments a more attractive prospect. As cloud service prices increase, it will take a larger portion of the already cut budget, which will mean there is less budget remaining, further driving the cost-cutting measures of cloud computing adoption. Cloud service providers tempted to decrease prices should take note.
  5. Cloud wars commence – The most renowned consumer cloud environments such as Google, Facebook, Microsoft and will start cloud wars based on price and economies of scale. And, since these companies are bringing enterprise grade services to federal and local government institutions as well as corporations of all sizes, the wars will pull in the managed hosting and data center collocation providers too. The majority will only be successful when they identify niche markets where they can deliver new services. Cloud wars will create coalitions leading to more holistic and innovative cloud solutions and differentiated service catalogs rather than traditional price wars.

Be sure to read Part 1 of this series on 2012 Cloud Computing Predictions.

What are your predictions for Cloud Computing in 2012? Any thoughts on the ones from our cloud experts above? Leave a comment and let us know.

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Michael Sheehan

Michael Sheehan, formerly the Technology Evangelist for GoGrid, is a recognized technology, social media, and cloud computing pundit and blogger who writes regularly about technology news and trends.

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