Originally posted on VMBlog.com
December was the season to spend quality time with family…and examine what will happen with cloud technology in 2017. My predictions are:
- The cloud will continue its march to dominance in enterprise software
- SaaS solutions will hit the mainstream in Finance departments
- Mega-vendors will continue to lose market share to nimble cloud vendors
1) The Cloud Will Continue its March to Dominate in Enterprise Software
During the past decade, cloud computing has gone from promising disrupter to essential tool for worldwide organizations, both large and small. Cloud technologies today know no barriers – supporting and powering countless applications and data, from ERP systems to customer-facing mobile apps.
In 2017, I predict we will see the cloud’s influence and value continue to grow, with far-reaching impacts on the enterprise software market.
As Forrester put it in their recent report 2017 Predictions: Dynamics That Will Shape the Future in the Age of the Customer:
“The cloud market will accelerate even faster in 2017. Enterprises use multiple clouds today, and they’ll use even more in 2017…to connect employees, customers, partners, vendors, and devices to serve rising customer expectations.”
To illustrate this impact further, consider the following predictions from Morgan Stanley and IDC:
- Microsoft cloud products will represent 30% of the company’s revenue by 2018
- Cloud infrastructure spending will grow at a CAGR of 15.1% through 2019 to $53.1B
- Over 85% of enterprises will adopt multi-cloud architectures in 2017, encompassing a mix of public, private, community and hosted clouds
2) SaaS Solutions Will Hit the Mainstream in Finance Departments
While the cloud will have far-reaching impacts on enterprise software vendors, I predict SaaS solutions themselves will transform how businesses buy that software – particularly in finance. The performance, accessibility and rapid deployment of cloud solutions will help finance departments take more of an ownership role over their software; finding, selecting and implementing tailored solutions they need – without having to rely on IT or expensive external consultants.
In a recent KPMG survey of nearly 800 global tech leaders that ranked cloud as the technology with the greatest impact in driving business transformation for enterprise, the report stated:
“The shift is on. Business executives now recognize the transformative potential of the cloud,” according to the survey analysis.
In another recent report, The Finance Organization of the Future, KPMG found that the success of the finance function is driven by innovations in cloud-based solutions, leveraging the latest SaaS finance solutions.
“The cloud presents an opportunity for the finance organization to be nimbler via infrastructure that is scalable, flexible, faster to implement and ultimately more cost effective,” according to the report.
As they summed up quite nicely, “if you are not already thinking about SaaS for your company, you are already lagging behind the competition.”
3) Mega-Vendors Will Lose More Market Share to Nimble Cloud Vendors
As already discussed, the benefits of cloud computing – with security, scalability, accessibility, and more – have been proven and validated beyond a reasonable doubt. It’s not surprising that the cloud has become a mainstay in finance, IT and operational departments worldwide. Indeed, 93 percent of businesses are already using cloud technology in some form today.
While Oracle, SAP and other mega-vendors continue their slow migration to cloud software delivery, their customers remain months or quarters away from being able to implement or migrate to cloud solutions. In 2017, I predict forward-thinking finance departments will increasingly look to more nimble technology innovators to replace or complement their mega-vendor solutions.
Remember the days when you couldn’t get fired for hiring IBM? Neither do today’s most innovative finance leaders.