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Cloud expands investment in IT

"How will tomorrow arrive? What will tomorrow's rules be? Who will set tomorrow's pace? Which way will tomorrow face?"

These were the questions posed in the opening keynote at VMworld in Barcelona this week. Pat Gelsinger, CEO VMware, said: "We together will face forward, in this the greatest period of disruption in IT. But it is also the greatest period of opportunity."

He said ‘digital transformation' is the new buzzword. "When we think about it, digital disruption is framed in the way that you can have either traditional business or digital business. Either the old and clunky, or the new and cool. We say nonsense. We say every business needs to be digital, there's no longer a meaningful distinction."

He said partners and customers want to engage in a new way. Any distinction between traditional and digital is redundant: the question is what is your strategy to win in this digital world?

Currently, Gelsinger said only 20% of businesses are leading in digital transformation. The differences between those who do, and those who don't, boils down to culture and technology: those who embrace technologies such as mobile and cloud, rather than rely on traditional IT.

A shift to the cloud

Since the industrial revolution, it has been about optimisation: of the supply chain, of resource planning, of delivery and suchlike. "Today, what we are doing with digital business is just as important as the industrial revolution. This is the foundation of digital business."

Speaking of cloud, he quoted Google's Eric Schmidt, who said at the Search Engine Strategies Conference in August 2006: "I don't think people have really understood how big this opportunity really is. It starts with the premise that the data services and architecture should be on servers. We call it cloud computing – they should be in a ‘cloud' somewhere."

In terms of the state of the cloud ten years ago, Gelsinger said it was broken down with 2% public cloud – much of that accredited to Workforce, and 98% workloads run on traditional IT.

"By 2011 we saw 7% public cloud – not just virtualised, but one that is automated and provisioned, with 6% private cloud,  and 87% traditional IT. In 2016 the stats show 15% public cloud, 12% private cloud, and 73% traditional IT."

Gelsinger said he asked his research team when cloud will equal 50%, and they said by the year 2021. Of this, 30% will be public cloud, 30% broken down into 14%  software-as-a-service (SAAS) and 16% infrastructure-as-a-service (IAAS). "When do we hit 50% public cloud, predicted to happen by 2030, it will be about half SAAS and half IAAS."

19% traditional IT, 29% private cloud.

Key changes

He says as cloud continues to grow, other key changes will occur.  "For example, the hosting market that is worth about 54 billion euros today, will be worth 99 billion euros by 2021."

In terms of what's being connected, he said there were 2.9 billion devices such as laptops, tablets and phones in 2006. There are 8.2 billion devices in 2016, and this number will grow to 8.7 billion by 2021. "However, in terms of Internet of things devices, there were 1.2 billion in 2011, 4.1 billion by 2016 and this will boom to 18 billion by 2021."

Cloud will not be a force that shrinks IT investment, he added. "Cloud will be a force that expands investment in IT. The more accessible we make IT, the more it is used, the more it expands. It is touching every aspect of business and life."

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