CXO

Breakout MegaTrends that will explode in 2015.

This year has been a breakout year for a number of key technology trends.

I will go through what I think are the trends that established themselves and the winning trends for 2015 that will gain adoption

Here is my list of what I think are the major technology disruptions in 2015 (in no particular order):

1. APIs (CaaS)-Component as a Service (CaaS)  fuels major changes in applications and enterprise architecture

2. SaaS – the largest cloud segment continues to grow and change

3. PaaS – is poised to take off in 2015 with larger enterprises

4. IaaS – massive changes continue to rock and drive adoption

5. Docker (Application containerization) Componentization has become really important

6. Personal Cloud – increasing security solidifies this trend

7. Internet of Things (IoT) will face challenges

8. Open Source Adoption becomes broader and leading to death of the traditional enterprise sales model

9.  CIO priorities will shift from cost abatement to “digitization” – new technology renewal

10.  Cloud Security and Privacy –  the scary 2014 will improve.  Unfortunately privacy is going in the opposite direction

11. Platform 3.0 – disruptive change in the way we develop software will become mainstream

12. Perceptive APIs / Cognitive Technologies / DeepAI – smart technologies become more and more important to differentiate

13.  Big Data – 2015 may see a 10 fold increase of data in the cloud

14. Enterprise Store – Enterprises will move to virtual enterprises and recognize a transformation of IT focused on services and less on hardware

15. App consolidation – the trend in 2015 will be to fewer apps that will drive companies to buddy up on apps

Here is more description of these changes.   Some of these I will talk more about in future blogs.

Cloud Segments 

The cloud has gone through some enormous changes this year and will see further adoption and change in 2015.   The cloud is doubling every year and in aggregate will double from $100 in 2014 to $200 billion in income in 2015.

The cloud is divided into segments as follows:   IaaS, PaaS, SaaS, CaaS(Apis), Personal Cloud, Internet of Things.   Most of these segments are growing at 100% / year or more..

1. APIs (CaaS)-Component as a Service (CaaS)  

APIs (What I call CaaS) really hit the mainstream and turned a corner in 2014 I believe.   The trend will be talked about a lot in 2015 and gain steam.   If you read my blog you know I think APIs are important fundamental new technology that you have to adopt and become facile at.

APIs continue to double every year and cracked 100,000 public and private APIs.   One proof of how mainstream they’ve become is forbes has an article on APIs to explain the value to the CEO.  🙂

In 2014 I saw the start of enterprises adopting APIs as their internal new “SOA” architecture.   I talk to technology CXO’s and the major reason they are looking to adopt APIs is to gain reuse.  It was a major benefit of SOA that was intended but never occurred.    APIs with a social enterprise store have proven to produce agility and innovation along with reuse.

There can be no doubt that APIs are the new paradigm when we hit 10 ^16 API calls being made in the cloud every month.  We are in a world now where it is almost required that any app use a plethora of APIs from across the cloud to be interesting, to be competitive but also just to get it to market fast.   Look at some apps on your phone and see if you can figure out what APIs it might be using.  Payment APIs, Geolocation APIs, Blob storage APIs, Rating Apis, APIs to identify faces in images, APIs to find places, advertising APIs, social site APIs, APIs for video, for phone calling, mapping APIs, Google APIs, Apple APIs.

Several other important API trends are emerging.   One is the government sector which is adopting APIs as a way to disseminate government databases.  This has occurred at the national and state level even going to the county or city level for major cities.   Check here to start your search for government APIs.

The other interesting development is the growth of the API aggregation services.   API aggregation services take bunches of APIs from numerous vendors and provide a collection in one place.   This simplifies using a wide variety of common APIs and is an alternate model to iPaaS which has not had the same level of acceptance and growth.  Several companies and efforts to note in this category include:

http://www.apinetwork.co/  apier, Itduzzit, Temboo, RunMyProcess.Ducksboard, Adigami, Sush.io, Good Data.Postano.Zypr, Segment.io, Adigami and even IFTTT.   The main iPaaS’s didn’t hit mainstream this year, BOOMI and SnapLogic.   It seems there is confusion about whether API aggregation services or iPaaS will win the day or maybe the distinction is moot.

I think this is something you see definitely in trends that have major lasting value.   Major trends have multiple legs to their value proposition which drive adoption from many angles.

Any company thinking about a digital strategy (which should be every company large or small) must make APIs a core part of their strategy.   Using Cloud APIs dramatically improves the customer experience and acceptance, reduces the time to market, creates a sticky capability and engages your partners to leverage your services whether you are Uber, selling groceries or building quantum computers.   If you haven’t caught the API wave yet please go to here to learn more about how you can become an API player quickly.

2. SaaS

is the biggest segment in the cloud and the longest lived.   At $75B in revenue in 2014 and probably at least 50% gain in 2015.   What is there to say about SaaS?  The major change in the SaaS space is the emergence of PaaS as a co-feature of SaaS and the emergence of mobile only SaaS solutions.    We also are seeing continued robust growth of APIs associated with SaaS applications.

3.  PaaS

had a slow year in 2014 as companies felt some of the offerings weren’t as mature as they expected.  I believe significant learning curve for most organizations trying to learn how to deploy into the cloud using PaaS slowed adoption of PaaS.    2014 saw a lot of organizations kicking the tires of the PaaS vendors and learning how to do it. 2015 will see more of that but I expect to see a large number of significant deployments in 2015.   Part of this growth and success is related to the unexpected but important growth of Docker.

PaaS is struggling with a confusion of where the IaaS layer ends and the PaaS layer begins.  The IaaS vendors are moving upstream to offer more and more services putting the pressure on some PaaS solutions.   I have an article that helps explain the difference between PaaS and IaaS that is my most popular article here.    I also have articles on describing important attributes of PaaS every CIO should be familiar with.

PaaS is divided into several segments:

General Purpose PaaS: WSO2 PaaS, Apache Stratos PaaS, Cloudfoundry PaaS, OpenShift PaaS

Vendor Specific PaaS:

Application Specific PaaS:

4. IaaS

has made significant strides this year.  2014 revenues will be around $40B for the industry, doubling to $80B in 2015.  

Vendors have drastically cut prices making adoption much easier.  In 2013 and 2014 IaaS was cost competitive if you compared true TCO of infrastructure to IaaS some enterprises saw at least short term advantages to buying their own hardware.  Many companies were able to justify keeping existing strategies but 2014 saw a race to the bottom that made owning hardware nonsensical anymore    They have also introduced features/services to make building applications in the cloud easier.

Amazon is the leader in this segment with a reported growth rate of 137% / year.  It has 50% or greater market share.  Google is fighting hard, very hard to become #2 cloud vendor over Microsoft.   Microsoft Azure is popular because of Microsofts devoted attention to making cloud easy to use and deploy and due to dependencies of many smaller enterprise customers on microsoft.   Vendors such as Joyent are seeking specialized markets.   Joyent specializes in mobile applications, docker support throughout and node.js expertise trying to pick markets apart by establishing a stronghold in some segments.  Other IaaS competitors are focusing on customer flexibility to choose hardware and others by using standards.   This will be a turbulent year for IaaS as these various strategies get played out with customers.

5.  Docker

is a breakout technology that is transforming how we build and deploy applications.   It has gained enormous popularity in 2014 and I expect massive gains in 2015.   Docker is able to provide a lightweight efficient open source vendor neutral way to package any application or component that makes it much easier to deploy.   We are seeing that Docker is becoming the defacto packaging / container format for applications making it eclipse the previous container formats such as VMWare and providing a needed standard for IaaS, PaaS.

Container standardization is a critical part of this cloudification because it greatly simplifies many things and provides an easy way to reuse different services.   A docker package is becoming the standard “planck constant” of the cloud.

The next thing in the container space is development of a higher level language to compose containers such as docker.  There are several candidate models.  I will talk about this in future blogs as it is a critical component of building higher and higher levels of automation.

6. Personal Cloud 

With Microsoft going to a cloud model I suspect in a couple years almost nobody will run applications on their desktop in a traditional model.

The biggest change I see in the personal cloud is the evolution of smarter and smarter services.  Our calendars are integrated with our cars, our watches.  We will see smarter and smarter collaborative services emerge.

7.  IoT Internet of Things

IoT is in the big up curve in the hype cycle.   Right now there is extreme optimism about IoT possibilities.    Indeed there are lots of opportunities and many things that seem to make sense as IoT’s.   The underlying new motivation for IoT is the cost reduction in the hardware, performance improvements and networking improvements of hardware.

This makes existing “networked devices” cheaper and they will become IoT simply because it is the lowest cost route.   There are billions already in smart factories and fleets that can be retrofitted to a “IoT” based foundation easily that will bring enhancements and lower cost.

The hope is that the emergence of new devices and new things that weren’t possible before, such as smart watches and  devices that before couldn’t be economically made into network devices will transform life and create disruptive value.   Let’s look at some of the segments:

Connected car:  There are many reasons to believe a connected car makes an incredible amount of sense.   Tesla has demonstrated the value of cars that can be operated by an app remotely, cars that can update themselves, collecting bigdata from cars to improve their service and performance.  A connected car can be smart.   A non-Telsa company doing this is called Automatic which is gaining a lot of interest among ICE car owners.   Numerous manufacturers have announced connected cars and some manufacturers saying their entire fleets will be connected soon.   There is reason to believe this movement will be extremely successful and it will have legs because of improvements in sensors for the car and self-driving capabilities.   There is no doubt Tesla has led the way and proven the connected car makes tremendous sense.

Connected home: It is yet to be seen how far the consumer will take the connected home.   A fully connected home could have its power, water, gas, wifi and sensors for intrusion along windows and doors, locks for doors or safes, pool, HVAC, lighting, entertainment equipment, computers and all the appliances connected.   In addition, things like IoT hubs, shades, window transparency control, vacuum cleaners, lawnmowers, irrigation systems could present an amazing high-tech lifestyle.   How much convenience these things might actually provide is unknown.   The cost of such a retrofit to a home might be exorbitant but specific items will undoubtedly prove economical and power significant growth.   I have a friend in Geneva who took a smart lawn mower and made it even smarter and more responsive by turning it into a connected lawnmower.  I have no doubt many of our at home devices will become connected as a default.

Connected business:  Business will adopt IoT rapidly because most businesses already have automated systems for lighting, hvac, security and other systems.  Many businesses have automated connected factories.  Many of these will convert to the new IoT standards if they emerge due to the cost improvements and improved functionality from interconnectedness.

Connected health:  Health was one of the original IoT hot spots.  The fitness devices were early sellers but it is thought that many of these are saturated markets now.    I have hope that new devices for monitoring patients will reduce hospital stays, improve quality of care and dramatically do things like lower the cost of drug trials.  However, I doubt that 2015 will see this come about.   Apple will introduce health features on its watch that will invigorate the market a bit but I think this is more a 2016 story than a 2015 story.

Connected Person:  This refers to individual devices.  Who knows what is in this category?  Toys?  Drones?  Sports devices, devices to make life more convenient, more sociable.   We always seem to buy up the social.   One reason I knew for sure that smartphones would be a massive thing was I understood that people are fundamentally social and having that ability to be social all the time would be soaked up by some.   Any devices that enhance social will be scarfed up in my opinion.   2015 may be the year of the social IoT devices.

8.  Open Source Adoption shifts into a higher gear

Resistance to Open Source is crumbling.  The fact that Google, Netflix, Yahoo, Facebook, Twitter and numerous other companies have active programs in open source and have leveraged that to tremendous innovation and growth along with the example of being able to reduce IT costs, make IT much more agile has forced many companies to concede that the traditional Enterprise license model is not aligned with many companies best interests anymore.

Enterprise License companies are not being perceived as partners to the business anymore.  They make you:

1) Hold off on innovation to push you to buy the next release.   This is very difficult to stomach in an high paced agile world we live in today.

2) Want to develop their own expensive versions of open source components instead of making it easy to use open source alongside their technologies.

3) Even though many offer “SaaS” versions of their products they know the success of those products will be a tremendous problem for their companies at least in the short term.

Numerous companies have made commitments in 2014 to Open Source.

I have personally seen numerous companies that have decided to eschew traditional Enterprise Software license model and fully embrace open source wherever they can.   Even in the conservative industries of Finance and Oil and Gas which traditionally have had large margins that enabled them to buy whatever closed source solution they want are now realizing that it’s not cost that is the issue. Open source software is the key to agility.  In many cases there are no choices other than open source.  So, bell-weathers like Bloomberg have made commitments to using open source wherever they can as the default.

The health care industry is seeing  open source as a way to lower cost technology and more agility.   There are numerous initiatives to create multi-state open source initiatives to reduce costs and increase agility to improve the health system faster.   This will be an enormous impact.

I believe 2015 will see open source becoming even more mainstream putting increasing pressure on traditional Enterprise License models and the emergence of new open source companies as leading software players replacing some of the large enterprise license model companies.

Other Articles in this series on 2015 Megatrends:

Here is the list of all 2015 Technology Disruptive Trends

1. APIs (CaaS)-Component as a Service (CaaS)  fuels major changes in applications and enterprise architecture

2. SaaS – the largest cloud segment continues to grow and change

3. PaaS – is poised to take off in 2015 with larger enterprises

4. IaaS – massive changes continue to rock and drive adoption

5. Docker (Application containerization) Componentization has become really important

6. Personal Cloud – increasing security solidifies this trend

7. Internet of Things (IoT) will face challenges

8. Open Source Adoption becomes broader and leading to death of the traditional enterprise sales model

9.  CIO priorities will shift from cost abatement to “digitization” – new technology renewal

10.  Cloud Security and Privacy –  the scary 2014 will improve.  Unfortunately privacy is going in the opposite direction

11. Platform 3.0 – disruptive change in the way we develop software will become mainstream

12 perceptive-apis-cognitive-technologies-deep-learning-convolutional-neural-networks

13.  Big Data – 2015 may see a 10 fold increase of data in the cloud

14. Enterprise Store – Enterprises will move to virtual enterprises and recognize a transformation of IT focused on services and less on hardware

15. App consolidation – the trend in 2015 will be to fewer apps that will drive companies to buddy up on apps

Related Articles you may find interesting:

http://www.businessweek.com/news/2014-04-24/technology-firms-pledge-support-for-open-source-after-heartbleed

http://investors.boozallen.com/releasedetail.cfm?ReleaseID=879350

http://www.bloomberg.com/now/2014-06-10/bloomberg-open-source-collaborating-better-solutions-code-management/

http://www.tomsitpro.com/articles/ibm-linux-open-source-kvm-linuxcon-2013,1-1248.html

http://readwrite.com/2013/10/17/is-facebook-the-worlds-largest-open-source-company

http://www.v3.co.uk/v3-uk/news/2234405/government-reaffirms-commitment-to-open-source-technology

http://www.apinetwork.co/

http://www.hanselman.com/blog/AnnouncingNET2015NETAsOpenSourceNETOnMacAndLinuxAndVisualStudioCommunity.aspx

http://www.programmableweb.com/news/api-aggregation-why-it-matters-and-eight-different-models/2013/12/13

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Categories: CXO, Megatrend

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