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What I Learned at IDC Directions 2019

Last week I attended IDC’s 54th Annual Directions Conference (#IDCDirections) in Boston.

As a former tech market analyst myself, I always find it refreshing to go sit among the trend-spotting tribe – including the army of analysts from IDC (and competing firms in the audience) and the buyers and solution providers that are always in an audience like this.

To say that digital transformation is an ongoing challenge for nearly every organization is quite an understatement. EVERY industry, including technology providers, as well as technology buyers and consumers, are undergoing transformations.

On the one hand, we’re all in the same boat – we can adapt and learn to embrace new disruptions, or we can be disrupted and have to recover from that disruption, jump (late) into the next wave, or simply fail and become obsolete.

And if any single thing stood out from this event, it’s that disruptions are all around us, whether we’re consciously aware of them or not.

What’s Top of Mind for IDC?

Frank Gens, Chief Analyst at IDC (@fgens), kicked off the morning discussing the “impending” change in cloud strategies – meaning how quickly the public cloud will become the “New Foundation” for infrastructure. The migration hasn’t fully happened yet – only 30% of Enterprises have moved to the cloud.

And with that remaining 70% of the market?

Over the next five years, IDC is expecting IT spending growth to be roughly 2.1X GDP (Gross Domestic Product) growth based on consensus economics from multiple sources. During 2000-2007 that ratio was roughly 1.5X IT spending growth vs. GDP growth. The IT Spending world is roughly twice the size now of what it was 20 years ago, including adjustments for inflation.

Frank warned that the next 5 years a “very bad time” to overreact to potential downturns in the economy. Be cautious with our caution, or as my father used to say, “Everything in moderation, including moderation.”

From my own perspective, in 2008 when the housing market collapsed, I saw most companies cutting marketing, sales, product development out of their budget, while a small percentage decided to double-down and work on increasing their own business. The winners coming out of that downturn were those who pushed through the fear to take advantage of an opportunity to go for a longer-term win.

For example, what’s now known as Microsoft Azure was launched in October 2008 as codename “Project Red Dog.” Since then, Microsoft’s pivot away from software licenses to SaaS and other cloud variations has breathed new life into the company that counteracted the dead-end path of Ballmer’s leadership. Where that leads ultimately, is anyone’s guess, but it’s safe to say that that pivot during a downturn was a smart move.

What’s the Role of the Cloud in this spend?

The vast majority of IT spending will be in the cloud, which is all of the “as-a-service” models, including Infrastructure-as-a-Service (where Wasabi lives), Platform-as-a-Service (where Salesforce lives), Software-as-a-Service (where most consumer-focused offerings live), or newer models, like Data-as-a-Service (where companies like Maystreet, a Wasabi customer, live).

The next wave is Insights-as-a-Service, which is when Artificial Intelligence/Machine Learning truly leverage data to generate fresh insights. Sidenote: IDC has an impressive AI research practice – they are digging deep and doing a great job of explaining the path to put in the infrastructure and processes needed both to get started, and grow into mastery of this area.

Rounding out this post, one of the sound-bites from the morning was this statement:
“The cloud used to be about economics, but now it’s [more] about innovation.”

But why not both?

In fact, earlier in the morning, I heard many references to Cloud 2.0, a term that we also use, to represent the next-generation of innovation in the cloud, in terms of capabilities, price and performance.

After the event, I looked deeper into IDC’s historical research, and see that they started covering Cloud 2.0 as a “MaturityScape” focus in 2015, and continue to cover the topic today – inclusive of IaaS, SaaS, PaaS and other “as-a-service” offerings. As of the publish date of this post, they have 32 reports that cover Cloud 2.0 from many different angles. This trend of the next-generation of the cloud is just starting to take off now.

The heart of Cloud 2.0, or our slice of that world, Cloud Storage 2.0, is about disruptive innovations aimed at both price (80% less expensive than S3), and performance (up to 6x faster than S3). That’s how disruptive innovation plays happen across the technology world. The incumbents get too big, too expensive, too slow, and startups spring up and start attacking their Achilles’ Heel(s). The giant topples, and the next wave takes over. Rinse and repeat.

Because Wasabi takes a radically different approach to executing on cloud object storage, we can change the economics in ways that Cloud 1.0 providers can’t, because they are stuck in an old model, and we have leapt to a new one.

From IDC’s perspective, they’re talking more about public cloud infrastructure becoming the foundation of the NEXT wave of innovation, but from our perspective, don’t think the core infrastructure of the cloud is done innovating yet. Not by a long shot.

Lastly…

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