The Fourth Wave of Cloud is Imminent

We recently crested the third wave of cloud. What appears to be happening now is an abrupt shift to the beginning of a fourth wave of cloud adoption.

Digital transformation and cloud have been inextricably linked for years. Themes of speed and scale have driven cloud as the "best answer" to improving an organization's digital presence. Ignoring SaaS, which is more about offloading operational responsibility for commoditized business functions than it is speed and scale, the massive rush to "the cloud" never really materialized. It grew, yes, but most workloads have remained on-premises even as enterprises embraced the benefits of public cloud.

[ COVID19 has entered the chat ]

Our response to the pandemic changed a lot of enterprise attitudes. One of the attitudes that changed was that toward remote work. Another was that toward public cloud.

In fact, just about every survey out there now says the market is full steam ahead on cloud migrations. 

First, a survey "commissioned by DevOps automation specialist Codefresh found that COVID-19 is at least prompting a reconsideration of on-premises infrastructure strategies. The vendor survey released on Tuesday (Aug. 18) found that 58 percent of those polled are moving some infrastructure to the cloud in response to the pandemic. Of those, 17 percent are planning to move their entire software stack to the cloud."

Next, "a new LogicMonitor study of 500 global IT decision makers examines the future of cloud workloads and the long-term impacts of COVID-19 on IT organizations in North America, the United Kingdom, Australia and New Zealand. Though the full picture is still evolving, the survey suggests that COVID-19 has become a powerful catalyst for rapid cloud migration. LogicMonitor’s Cloud 2025 study, fielded during May–June 2020, found that 87% of global IT decision makers agree that the COVID-19 pandemic will cause organizations to accelerate their migration to the cloud."

Yet another "survey of more than 100 cloud-focused IT directors or above in companies with at least $500 million in annual sales and IT budgets of at least $50 million per year conducted by 2nd Watch, a provider of IT services, found that 59% plan to increase their cloud budgets in the next 12 months, with more than a third (34%) accelerating migrations to the cloud."

I'll stop there, because it's just one long list of surveys after another saying the same thing: "cloud migration is accelerating." A few make the distinction between cloud and SaaS. Most do not make the distinction between migrating to cloud and migrating workloads to the cloud.

Cloud has been and continues to be used as an umbrella term for several different models. One of those is SaaS. One of the reasons we (that’s the corporate We) specifically separate SaaS from other types of cloud (IaaS and PaaS) in our annual research is because SaaS tends to skew the view of the entire market. SaaS migration is accelerating post-COVID-19. There is no doubt about that. This includes all the usual suspects of reducing instances of packaged software by adopting a SaaS equivalent as well as a shift toward IT management via SaaS.

We, too, are seeing a shift in customer preferences toward SaaS for packaged software that has traditionally been deployed on-premises. There’s also a movement to migrate custom apps for those business functions that now have SaaS equivalents. The driver behind these migrations is two-fold: reducing IT operating costs and freeing up resources to focus on producing value.

So, that said, is cloud (sans SaaS) migration accelerating? I'm not convinced. I think cloud adoption is accelerating, not necessarily wholesale migration (i.e., workload migration). Even the industry research that makes a distinction between infrastructure and SaaS tells us that most are only moving some infrastructure, and only a small minority of those are moving everything.

The distinction between migration and adoption is important. Migration implies the movement of an existing resource from one location to another. Given the investments and data gravity in existing traditional applications and surveys that make the distinction clear, it is highly unlikely most organizations are moving wholesale to the public cloud.   

Rather, what these surveys appear to be uncovering is the effects of accelerating digital transformation initiatives. Cloud adoption will necessarily increase, as it is often the best possible location for the applications and APIs needed to modernize applications and fully participate in the soon-to-be dominant digital economy. Remember, app modernization is not a synonym for "rewrite a monolith as microservices." It's just not. It means modernizing access to an application by extending, augmenting, and integrating an existing traditional application with modern components. Are those often microservices? Yes. But core systems, the ones running critical (and often unique) business functions, are still likely to be on-premises.

So is cloud getting a boost in the post-COVID world? Yes. Absolutely. Are enterprises migrating en masse to the cloud? I don't see that happening. At least not yet.

What I do see is the fourth wave of cloud adoption coming, driven primarily by an urgent need to get more of the business in the digital realm.