Futurist: Channel Has To Remove Friction To Cloud 2.0 Adoption

The market opportunity will be massive for cloud partners in the next decade as vendors disaggregate cloud services, and businesses look to shed all but their core competencies

Over the next five to ten years, the technology industry will shift from Cloud 1.0 to Cloud 2.0, and managed services providers that can smooth enterprise adoption of disaggregated cloud services will prosper greatly.

But the trick to seizing that opportunity isn't understanding the progression of technology, which is fairly predictable, but the use cases that it will enable, Tom Koulopoulos, chairman of the Delphi Group think tank, told attendees of NexGen Cloud 2019 conference in Anaheim, Calif. on Tuesday.

In a keynote titled "How Next-Gen Cloud Will Transform Business," Koulopoulos told the NexGen audience: "the value that people in this room bring is going to increase by orders of magnitude."

[Related: NexGen Conference & Expo 2019]

The pace at which computing power and storage capacity increases mostly follows a trend line. But business advantage comes in understanding how people, and organizations, use those resources.

To illustrate that point, Koulopoulos, a highly-regarded futurist and author, traced the evolution of computing technology, from the IBM ENIAC mainframe of the 1950s to the smartphones we all carry around—a large percentage of the 10 billion computing devices in existence.

Back in the 1950s, no one could comprehend the use case for what is essentially 10 billion ENIACs. Similarly, we can't comprehend what will come in the next 60 years—but the next 5 to 10 years are in clearer focus.

An "insatiable appetite for data," will characterize emerging business models that revolutionize every industry, he said.

Currently, from transportation to health care, the stumbling block is storing and accessing the right data, as we're generating more of it than human beings know how to understand and decipher.

What's worse, it's all too expensive, Koulopoulos said. There's still a long way to go to achieving Cloud 2.0, where data is bottomless, and storing any that might be of value is economically viable.

"The economics of data ultimately define the parameters of your business model," he said.

Those challenging economics have slowed cloud adoption. Currently, only 10 percent of companies have moved their data into the cloud.

"We've barely seen the economic impact of this movement. But it's going to happen," Koulopoulos said.

Companies like Microsoft, Amazon and Google deserve to be commended for building the first-gen cloud. But what has held up universal adoption is that those providers still present a bundled economic model.

Cloud 2.0 will be the unbundled cloud, deconstructing services—compute, storage, networking—into components offered by vendors that can optimize each of them independently. Look to what Wasabi is doing for storage, or Packet for compute, as examples, Koulopoulos said.

"Your role is to be the aggregator of these various services," he told solution providers gathered in Anaheim.

Slowing that progress is lock-in to Cloud 1.0. "Once you're locked in, it's really hard to get out of it," he said.

The channel will play a key role in unlocking the next phase of cloud, which further frees companies to focus on their core competencies and shed all others—an essential pursuit for businesses that want to remain relevant as the world rapidly changes.

And for most businesses, technology is essential to the products and services they deliver customers—but it's not their core. Cloud partners must figure out how to eliminate the friction that makes it harder for their enterprise customer to focus on their core value propositions, Koulopoulos said.

"What you deliver as an industry is the elimination of technological friction," Koulopoulos said. "You take friction out of the equation, you increase the velocity of the transactions, and increase the pleasure of the user experience."

That sentiment resonated with Ben Schmerler, director of strategic operations at DP Solutions, a managed services provider based in Columbia, MD.

Schmerler works on guiding direction of the business, and sees the paradigm shift currently under way as one that will drastically impact MSP practices.

"We have to be bleeding-edge within our core, willing to embrace this new stuff, embrace change, but remember fundamentally who we are," Schmerler said. "That sounds like it's conflicting, but I don’t think it is. "

MSPs have to constantly assess how the deliverables they excel at can be provided to suit the modern and rapidly evolving market, Schmerler said.

"A lot of MSPs become very stale," he said.