CSPs, Content

Top 10 Cloud Services Provider (CSP) Predictions for 2017

Where is the cloud services provider (CSP) market heading in 2017? Thanks for asking. Here are 10 CSP industry predictions for VARs, MSPs and other channel partners that are still shifting to the cloud.

10. There's Only Room for Two Massive, Mainstream CSPs: Let's face it. Every extremely mature IT market comes down to two platforms. In PCs, its was Mac vs Windows. In mobile, iOS vs. Android. On servers, Windows vs. Linux. And in mainstream public cloud services, it's Amazon Web Services vs. Microsoft Azure. Everybody else -- including Google Cloud Platform and IBM Cloud -- will need to find some specific public cloud niche to dominate...

9. Cloud Partner Programs Shift From Commodity SaaS to Custom IaaS: Sorry, but reselling Microsoft Office 365 doesn't make you a true CSP. In many cases, Office 365 resellers look a lot like Microsoft Office 95 shrink wrap software resellers from 1995 -- without the classic client-server profit margins. MSPs that figure out workload management, monetization and DevOps management atop IaaS will be in the driver's seat for years to come.

8. End-to-End Cloud Monitoring Emerges: Datadog is pushing from infrastructure monitoring to application performance monitoring (APM). On the flip side, New Relic is extending from APM down to infrastructure monitoring. The result? end-to-end cloud management tools that potentially empower MSPs for total cloud customer management...

7. CSP Backup Shakeout: It's finally here. A few cloud backup providers will finally go bankrupt or get sold for pennies on the dollar. CSP backup providers that "sort of" work with the channel while also selling direct will rank among the biggest losers. We'll share more thoughts when we publish our BDR (backup and disaster recovery) predictions list -- soon...

6. Verizon Will Finally Sell Its Data Centers: After a painfully slow sale process, Verizon will finally sell off its cloud data centers while somehow remaining in the CSP market. The company will double down on network-centric cloud services like NFV (network functions virtualization).

5. Cloud Distributors Will Scale Up or Flame Out: Ingram Micro Cloud will continue its momentum. Tech Data will be forced to choose between its StreamOne platform and acquired assets from Avnet Technology Solutions. Synnex will push forward with CloudSolv differentiators like the Docker relationship. And upstarts like Pax8 will turn some heads. But staying in the cloud distribution game will require (A) ownership of the underlying IT platform and (B) heavy funding. We'll be watching to see who has staying power and the stomach for ongoing investments.

4. Hybrid Cloud Hype Ends: I know. The vast majority of customers will stick with hybrid cloud models -- running some workloads on-premises, and some off in the cloud. But here's the thing: Spending in the on-premises IT market is either flat or shrinking. Most MSPs and VARs will finally wake up to that fact, and double down on their true cloud investments.

3. On-Premises Cloud Projects Die: So, your midmarket and enterprise customers want to build an on-premises cloud that looks and acts like Amazon Web Services. They want to transform the corporate IT department into an IT service provider model. Seriously -- can we put an end to this myth? There is simply no way to build an on-premises private cloud that matches the elasticity -- scale up, scale down -- and cost model of the public cloud. That's why so many on-premises customers have abandoned OpenStack projects in their own data centers...

2. Ransomware Invades CSP Data Centers: Sure, ransomware will continue to infect PCs and on-premises servers. But watch out for ransomware on virtualized workloads out in the cloud. Big and midsize CSPs will suffer ransomware infections -- encrypting their data and/or customer data. The big question: Which of the big CSPs eats humble pie and winds up paying the ransom?

1. International Terrorism May Destroy One or More CSP Data Centers: Whether it's state-sponsored hacking or religious fanatics, terrorism will extend from personal, physical attacks to digital attacks that darken and/or destroy some U.S. infrastructure. Distributed Denial of Service (DDoS) attacks against multiple cloud application providers in October 2016 were just the start.

Sorry about a few of the depressing, gloom-and-doom entries. I remain very optimistic about the overall CSP landscape. But our inability to mitigate DDoS attacks should put all of us -- including the U.S. government and Silicon Valley -- on notice...

Note: ChannelE2E is running 2017 technology predictions throughout the month of December 2016. Submit predictions for consideration to [email protected]. Read all daily predictions here.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.