Report indicates growing interest in edge services, IoT, as overall cloud spending increases

Report indicates growing interest in edge services, IoT, as overall cloud spending increases

More companies are embracing multi-cloud strategies and spending more as well, according to Flexera’s 2020 State of the Cloud report. Among technologies related to edge computing, interest in IoT services has seen the highest growth, followed by container-as-a-service and machine learning/artificial intelligence.

Edge-relevant technology adoption

Container use is now more prevalent, as 6% reported using Docker and 58% are using Kubernetes, yet 41% are concerned about having a lack of expertise to run such technologies in their organizations. The solution? Companies are looking at using AWS, Azure, and Google container-as-a-service offerings.

The most popular PaaS services are relational database as a service (DBaaS), container-as-a-service and data warehouse, with container-as-a-service moving up to second from sixth place, as companies want to speed up deployment, optimize efficiency and scale operations.

A growing interest has also been observed in machine learning and big data projects. Almost half of the respondents are exploring the use of edge services, IoT, stream processing, and disaster recovery as a service. Compared to 2019, IoT has seen a 21 % growth, container-as-a-service a 17 % growth, as well as machine learning and AI.

Broader cloud adoption trends

Public cloud adoption is on the rise, with more than half of workloads and data to be stored in a public cloud in the next year, an event made more likely to happen due to increased digital transformation efforts resulting from COVID-19 measures. The report states that 93% of companies have so far implemented a multi-cloud strategy, and 41% are integrating data between clouds.

However, companies focused on cloud migration (61%) will have to overcome issues related to application dependencies. Security is still seen as a top challenge by 83% of companies, followed by managing cloud cost implications and lack of resources.

In the past, organizations were reluctant about storing sensitive data in a public cloud due to security concerns, yet Flexera’s report shows a change of heart. More than half of organizations would now move some corporate or financial data to the cloud.

Spending on Cloud powerhouses

So far, AWS has seen the highest annual spend at more than $1.2 million committed by 40% of companies, while Azure came second at $1.2 million or more spent by 36% and Google coming third with only 18 % of companies spending over $1.2 million.

Enterprise cloud spend has registered a significant year-over-year increase. While last year only 13% made an annual investment of more than $12 million and 50 % spend over $1.2 million, figures show an increase to 20% of enterprises committing more than $12 million and as many as 74% spending more than $1.2 million.

Conclusion: Flexera sees the multi-cloud strategy of mixing public with private clouds as a top industry strategy that will be widely adopted by enterprises, which are now more comfortable with storing sensitive data in the cloud. As cloud spending continues to grow, enterprises will look into optimizing efficiency and cost through the adoption of DevOps and containers.

Key Takeaways for Edge

  • Edge services weren’t addressed in the 2019 report, but 28% of respondents are currently using edge services, with another 26% experimenting with them in 2020.
  • Related technologies for edge computing, including IoT, AI/ML, and containers, also registered strong interest among cloud users.
  • Security is going to be a concern for edge computing use cases, as it remains an issue for the cloud in general.
  • Despite concerns, migration of sensitive data to the cloud is moving ahead, suggesting that frameworks needed to manage data at the edge will also be less likely to block edge-related projects.
  • Unsurprisingly, AWS has the highest percentage of customers investing heavily in the cloud, followed by Microsoft and Google.

Analysis

The Flexera report focuses on bigger picture cloud technologies and trends, but with edge services and other related technologies making the list this year signals the importance of edge computing strategies for vendors and enterprises alike.

Cloud adoption trends can be viewed as a leading indicator for the use of edge-related technologies. Spending on key vendors will be indicative of potential demand for edge-related future spending on services such as edge PaaS, containers, edge functions such as AWS Lambda@Edge, IoT, edge AI, and the like. AWS and Microsoft Azure are in the lead to help enterprise customers expand the use of edge technologies, though Google’s expertise in AI/ML will help it secure some edge workloads.

Jim Davis, Principal Analyst, Edge Research Group

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