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​Digital Realty IT Predictions for 2017

Chris Sharp, Chief Technology Officer
December 5, 2016

Digital Realty Predictions for 2017: Cloud Security Will Take the Lead, IoE Will Drive Compute and Storage Needs

We believe that 2017 will see greatly accelerated growth of enterprise hybrid and multi-cloud IT strategies based on an increase in availability, quality, performance and security of cloud interconnection services and capabilities. The rapid growth of the Internet of Things (IoT), the continued search for security advancements, the focus on sustainability and businesses’ omnipresent need to reduce costs and increase productivity will drive continued growth of interconnection services, and create strong pull for public cloud and SaaS offerings.

Interconnection and colocation vendor consolidation will likely continue, driven by global enterprises’ need to simplify operations, and owing to increased opportunity and competition in the space. By the end of 2017, Fortune 500 companies without progressive interconnection, hybrid and multi-cloud strategies will compose a minority, and will find themselves at ever-increasing disadvantages when compared to their competition.

We expect the market in 2017 will be driven by a number of factors, including the following:

Cloud Security Will Best Private Data Centers; Direct Connections Will Beat the Public Internet

Years of hand-wringing over cloud security, accompanied by near-daily breaches of on-premises data centers will lead to the realization that the cloud is actually just as good, if not far better. Continued proof of hackers’ ability to exploit vulnerabilities of the public Internet will make the superiority of direct connections apparent. Both realizations will drive increased adoption of these services in the coming year.

Sustainability Concerns Will Promote Colocation/Cloud Adoption (with Green Data Center Leaders)

Increasingly focused on the “greening” of their IT operations and its effect on both capex and corporate reputation, distributed enterprises and mid-market leaders will continue seeking to outsource data center facilities and operations rather than building and operating their own. Highly aware of the increased visibility of IT generally, however, they will be sure to pick colocation and multi-cloud providers who lead the field in sustainability themselves.

Internet of Everything Will Drive Compute and Storage Needs Up and Away

When IT manages everything from servers to light switches, and from routers to refrigerators, the need for compute and storage goes up. Enter colocation and the cloud, easily scaled up as the number of “things” under its purview continues its rapid expansion. Savvy leaders will outsource the necessary infrastructure and the applications, leaning on their interconnection providers’ abilities to draw from and manage best-in-class options for both.

Managed Services to Lean More on the Cloud

Managed services offerings designed to offload management of the Internet of Everything (IoE) will scale quickly and globally, and will by necessity be based in the cloud. A need for local direct connections to cloud resources based on the need for low latency in these systems will drive increased engagement with multi-cloud-enabled interconnection providers.

Increasing Mobility Will Drive Further SaaS Adoption and Shadow Cloud Deployments

The low cost and ease of installation for most cloud based mobile SaaS applications makes them increasingly attractive to a highly mobile workforce that values flexibility and low physical device profile over the ability to conduct in-depth deliverable development. Continuing acceleration of mobile devices in the workplace will continue to drive cloud application/storage/SaaS adoption, even when IT is uninvolved (Shadow Cloud).

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