At the beginning of 2013 I made 10 predictions (here), let’s see how they turned out before we look at 2014:


2013 predictions:

1) More Growth of Mobile Cloud Computing Yes! Cloud solutions in 2013 led with their mobile interfaces.

2) Increased Importance of Cloud Security – Snowden and the NSA affair brought a different perspective to cloud security in 2013, adding to an already hot topic.

3) Bring Your Own Cloud (BYOC) Boom – boom? Not really. But 60% of IT investments are influenced or even decided by the line of business (non-IT). So yes in that sense that cloud is spreading beyond being a technology topic.
4) Focus on Beautiful Applications – Absolutely! User Experience is key. If you do not focus on a targeted user experience, then do not even bother.

5) Need for the Glocal Cloud – cloud vendors have to be global, as business is global. But you need to adapt to local needs. So yes, glocal is key.
6) Rise of the Geopolitical Cloud – Unfortunately security and data protection concerns accelerated the geopolitical discussion dramatically. There is a risk for all if the cloud becomes too fragmented. On the other hand there is a huge business risk in loss of trust in the cloud. An
European cloud approach could help. And in China, it is clear that you need a local Chinese cloud.

7) Spotlight on the Clean Cloud – Sustainability and innovation go hand in hand. This is our future and we have a responsibility.

8) Hybrid Cloud Boom – boom? It has become reality! Even cloud purists acknowledge the need for a pragmatic cloud strategy. Capitalize on your existing investment where appropriate and be agile with cloud solutions where it makes most sense.



Cloud is Business: that is my 2014 prediction.

I often hear people say they are developing and executing according to their Cloud Strategy
I believe this is not the right approach. First and foremost you need to have a business strategy, and then apply cloud computing where it is of best fit.


       Cloud is Business 2014.JPG


10 Cloud Computing Trends for 2014


1. Cloud is business – Cloud enables agility and business innovation


Every business today is a digital business. The world around us is changing, and IT needs to be the innovator rather than the gatekeeper.

Cloud is recognized as facilitating “speed-to-market” – and for its ability to drive business agility. This is because cloud supports rapid experimentation and innovation by allowing companies to quickly try and even adopt new solutions without significant up-front costs.


New cloud solutions can help business to understand their customers’ unique challenges, industry and preferences and help them to apply new agile approaches to achieve their business objectives.


By 2017, the transfer of investments from IT to line-of-business budgets will require 60 percent of CIOs to focus the IT budget on business innovation and value. – See more here.


2. Security – Addressing security & privacy is key to building trust in cloud computing


Cloud Conversations are dominated by one question: “How secure is the cloud”. This is a tip of the iceberg question which normally leads to questions around:

  • Physical Security and Data Location
  • Network Security
  • Backup & Recovery
  • Operational Compliance
  • Confidentiality & Integrity
  • Data Portability
  • Location of Data


However, According to Verizon Data Breach Investigations Report, 86% of all security breaches were accomplished by the use of stolen login credentials, making secure enforcement of employee passwords and single sign-on policies “a must”.


By 2015, 60 percent of CIO security budgets for increasingly vulnerable legacy systems will be 30 to 40 percent too small to fund enterprise threat assessments – See more here.


Data privacy has become a hot topic in the post-Snowden era. The location of a datacenter and the laws which apply to that location is important. The strictness of European regulations, and especially regulations in Germany (Germany’s Federal Data Protection Act  – Bundesdatenschutzgesetz), can help build trust when deciding on a geographical storage location for customers data.


We will see a rising demand for private cloud deployments and private editions of public cloud.


There is a move towards geopolitical cloud initiatives, e.g. in Germany and in China with companies like SAP being well positioned.

3. System of Engagement – Common User Experience across delivery models, cloud as a wrapper


We are living in an experience economy where the value of experiences outweighs the differentiation of products and services. Our customers are focused on making the lives of their customers, partners and employees simpler and easier. Simplification and streamlining of experiences (both user experiences and buying experiences) are becoming highly valued and often serve as the top criteria in decision-making.


This is what consumerization of IT is about. Cloud solutions can be a highly agile wrapper around different systems, different behavior and bringing it all together in an engagement cycle. By changing the way people interact with technology, cloud enables new forms of consumer engagement, expand collaboration across the value chain and bring innovation to companies’ core business models.


4.  Cloud as the innovation platform – Mobile, Social, Big Data

  • Mobile is the mega trend of our century, and has become a commodity.
  • Social has permeated through our personal and business networks.
  • Big Data – the volume of data available for organizations to mine for business value is staggering. The potential for real business insight is tremendous.Companies will more focus on outcome, so what to do with the data. here they need smart solutions – smart data.

Cloud technology provides a common platform for Mobile, Social and Big Data applications to cross pollinate as well as enhance and extend existing investments. Cloud as innovation platform will give you the agility to respond quickly to new innovations, e.g. wearable technology or speech & gesture interaction with applications.

Let us look at the benefits of Social & Big Data in the next predictions…


5. Social – Collaboration in a business context

A new generation of digital consumers is coming into the market place. As a result, in 2 years 5 generations of workforce will need to work together.

Focusing only on transactional systems will mean a huge loss of accumulated business knowledge to the organization. Collaboration between generations of employees will have to be transactional as well as provide business context for a successful knowledge transfer.


This will only be possible if collaboration is embedded into the business process. Increasingly business processes will have many cloud touch points, making a case for cloud based collaboration. And this collaboration will also span across cloud and on-premise systems – helping the delivery models to converge.


6. Big Data – Actionable data


“Big Data” has become the catch-all phrase for the volume of data businesses generate today. The up to nine fold increase of digital information shared in the last five years needs to be analyzed in context and made actionable. We call it smart data.


Without appropriate action, the collection and analysis of the data is worthless. Cloud technology makes the collection, analysis and dissemination of results and actions that much easier due to its flexibility.


I see that Big Data and Predictive Analytics will merge and likely fall under the single concept of Predictive Technology.


7. Realtime and Predictive – Realtime is no longer enough


Users are bombarded with analytics and statistics. And now in real-time. But real-time is no longer enough. It also needs to be predictive.

The predictive business isn’t just about advanced analytics. It’s not just about big data. That’s certainly a part of it, but just knowing something is going to happen, just knowing about a market opportunity or a pending risk isn’t enough.


You have to have that capacity and insight to assess a myriad of scenarios to detect the right course of action, and then have the agility in your business processes, your organizational structures, and your systems to be able to adapt to, or capitalize on these changes. A cloud platform & solutions will provide the base for such innovation and agility.

8. Networks – The business network effect


Solutions designed for the networked economy will be leveraged to ensure interaction between all stakeholders – employees, partners, vendors.


While networks we know today are mostly focused on the B2B interaction of enterprises, we will see new networks rise fast, e.g. financial and customer relationship networks. The Network effect only kicks in if you are open and you scale fast. It is simple: more users make a network more attractive and amplify the benefit for all.


9. Platform – you need to have a PaaS to succeed with cloud solutions


Companies often end up with a cloud landscape where cloud solutions pop up like mushrooms. A clear path converging to one platform will be key. A critical factor will be the ability of this platform to drive innovation as well as provide integration to your existing landscape.


Cloud brokerage will become increasingly important, provided by vendors or other partners. IT departments need to be involved early to ensure quality and decide on the capabilities to manage the different cloud environments with a consistent management framework, tools and user experience.


10. Hybrid cloud – It’s all about the mix


You cannot move everything to the cloud. You may not even want to. And even more important – why rip out something that works and disrupt the business?


Adoption of cloud should happen at the customers pace, not the vendors pace.


Within next 2 years, over half of the spending in IT will be allocated to cloud computing. That also indicates that we need to connect with above 40% of the systems that are currently on-premise. Hybrid is a fact of life.

Summary

SAP has built a successful business by helping companies become more efficient, streamlined, and reduce costs. These days SAP’s customers are thinking beyond efficiency and are looking for growth through innovation and the ability to change rapidly.

SAP has taken tremendous strides in broadening its portfolio beyond traditional ERP and has made strategic investments in key areas that enable and accelerate innovation for customers while continuing to extract incremental value from the core. 

The benefits of cloud computing, irrespective of how we consume it, will enable business and people to perform their tasks not only better than before, but in new and innovative ways that might just turn business as we know it on its head.

Cloud solutions will outgrow in many areas the traditional solutions, so try it out (link).


What do YOU think will be the hot cloud topics in 2014? Share your thoughts in the comments below or on Twitter using #CloudPredictions where we can continue the conversation : @SDenecken .



Sven Denecken is SAP Vice President Cloud Strategy. (twitter: @SDenecken)


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10 Comments

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  1. Jarret Pazahanick

    My prediction is that HR customers start to realize that the hybrid OnPremise and Cloud deployment model is NOT in their best interest given the challenges around reporting, interfacing, supportability and the older underlying architectures of many OnPremise HCM solutions and additional licensing for basic mobile functionality etc and start to move towards full HR Cloud solutions from a single vendor.

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    1. Sven Ringling

      Hi Jarret,


      I see the problems you mention – they are all very real. But are they really that much different from the “traditional” problems of a best-of-breed approach, which many customers choose nevertheless? Sure, some cloud<->onprem interface technologies into are still quite new, but with maturity I thought they should not be more terrible than op2op interfaces.


      And then migrating a fully grown HRIS as a big bang is no mean feat. Be it as it may regarding the advertised deployment times – sure they can be much shorter from a tech perspective, but many organisations would choose to move to 21st century tech using 21st century processes. And this will still require a major re-design and change effort often best done in stages, hence requiring interfacese in the interim anyway.


      My guess would be we’ll see some regional differences with American customers being more gung-hoo about it and many European, sometimes Asian, customers waiting for wave 2 alltogether while  updating their on premise HRIS or just tipping a toe into the cloud with Talent, Learning or Recruitment.


      In the long run, I’d hope to find the number of interfaces minimised. I completelt follow your argument in that – never was a big fan of complex, alleged best-of-breed architectures


      Well, it will be another interesting year. I wish you a very good one!

      Sven

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  2. Sina Moatamed

    Sven,

    A fantastic set of predictions.  I think you covered the bases very well.  I especially liked the idea of moving from real-time to predictive.  I haven’t spent enough time working through that one, but it immediately resonated.

    Lately, I have been in discussion  with colleagues of mine around the topic of user experience.  As the Enterprise Platforms (identity management, integration, master data management, search, collaboration, PaaS, and analytic systems) become established in the Enterprise, it will give way to a mono-focus around user experience.  I see a huge innovation opportunity in this space, which will drive productivity, collaboration, and innovation itself.

    Thanks for this post!

    I hope everyone has a wonderful new year and that we get to see these innovations actualized.  And I think we will.  Should be a fun year ahead.

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  3. Andreas Eissmann

    “Cloud as the inovation driver” is definetely main trend that will go further in 2014. Software vendors like SAP are delivering their cloud products with more love in details as they did it before with on premise software. Groundbreaking user interfaces, better/faster analytic engines, bigger focus on mobile. And it’s not only a innovation regarding technologies, it can be also more innovative for companies which use cloud software. They have shorter implementation projects and smoother upgrades; both help to react faster to market changes.




    I also like the idea of moving from real-time to predictive.




    For me line of business cloud application will getting more important cause in first of all  companies do not search for technology they search for technology/products which makes their processes more efficient. Line of business applications are extremly focused on this business needs and from cloud they are more flexible and faster to implement. Integration possibilities of those applications is a key factor for success.

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    1. Sven Denecken Post author

      Agree. Many customers realizing the benefit now that we put accelerating SFSF / Cloud4People from the get go. And also thanks for your support in helping the customers with this!

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  4. Michael Mankowski

    Hi Sven, thanks for the predictions.  I’ll focus on point #10, regarding Hybrid Cloud and the right mix. For 2014//15, the Cloud will grow to be the de-facto standard deployment model for new software functionality. But current on premise systems will not be torn out, but INTEGRATED into the Cloud.

    We keep hearing about “seamless integration” and I think that 2014/15 will show us what “seamless integration” really is. Log on once and access all systems, whether it is Cloud or on prem.  Users want the functionality and access, without having to log into multiple systems.

    Hoping for a Cloudy 2014!  Happy New Year.

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    1. Sven Denecken Post author

      Hello Michael,

      I personally do not like the term “seamless”, because it is not depending the customer situation. I would say it is pre-packaged and you better collaborate with the client and the partner to make it happen. But knowing both worlds – on prem and cloud – we are in the ideal position to make this happen.

      And needless top say – rip and replace is NOT an option, so hybrid will be the defacto standard.

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