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Will cloud keep growing and growing until it takes over everything? History says, "no"


Predictions of the continued growth of public cloud abound. And, of course public cloud will keep growing.

But will it keep growing forever?

Those of us with good memories may have a sense of “deja vu” over this - “by 2024, pretty much all book sales will be ebooks”. I remember a discussion I had with my follow passengers on an airplane four years ago where my love of physical books was laughed at. I was told that, in time and if I would just try an e-reader, I too would see the error of my physical-book ways.

The graph below shows the sales of e-books in the UK over time. As you can see, in 2012 and 2013, one could well have believed that physical book sales would have largely stopped by 2024. Steve Jobs certainly felt that way.

cloudcliff1-ebook sales.png

And then, in 2015, we reached a very interesting point. We reached what many believe is an equilibrium proportion. They have been that way in 2015 and 2016, and are projected to do so for 2017 too.

Much of the data for this graph comes from a Guardian (UK) article of March 2017. While the fact that an equilibrium has been reached is interesting, what I also found fascinating were the stats as to which kinds of books favour physical, and which, e-book…

  • 62% of 16 to 24-year olds prefer printed books (I found this odd, but it’s certainly true of my two teenage kids. They also hate tablets - more of that in a minute)
  • Only 4% of children’s book sales are e-books
  • There are few non-fiction illustrated e-book sales. For example, celebrity chef cook books are a hot sector in the UK - but they are all physical sales
  • Adult colouring books are a fast growing sector
  • And there is a continued, very strong second-hand (and third and forth-hand) book market. In the UK, every high street has at least one charity shop that has an excellent choice of used books.


The parallels between cloud/on premises and e-book sales

I think there are parallels between e-book sales and what’s happening with cloud.

When new technology comes along, it’s easy to think it will grow forever
Firstly, when we are on a growth curve for new technology, it’s very hard to see anything but growth “forever”. And it’s easy to extrapolate current growth lines and say, “therefore the current technology (books, laptops, in-person grocery shopping) will be gone in N years”. But the reality is that after a few years, we get to an equilibrium where both the new technology and the “old” exist together (I put “old” in quotes, because the existing typically isn’t old - grocery stores aren’t “old”, on premises computing isn’t “old”, laptops aren’t “old”; but the makers of the new paradigm like to paint it this way).

I mention this because I’m pretty sure that we’ll start to see an equilibrium mix of cloud versus on premises evolving soon.

We assume that the new technology is great for everything
Secondly, when a new technology comes along, people assume it’s going to be great for everything - every book will be read on e-readers, every grocery shop will be on-line, everything you do on a laptop can be done on a tablet. In time, however, people realise that there are some things that new is better for (new fiction e-books, reading The Times [of London] in the bath for tablets, a standard weekly shop if you are very busy person with young kids). But the “old” technology is better for other things - young kids and physical books, children’s books, illustrated non-fiction.


My colleagues in HPE have just completed detailed interviews with twenty customers who moved workloads back from the cloud to on premises. I’ll talk about these interviews in my next blog post, but those “workload come home” situations are just like the list of physical book preferences above - e-books are not bad, physical books are not bad, cloud is not bad, on premises is not bad - it’s a question of “horses for courses” - the cloud is great for some things, and on premises is great for other things.

New use cases come along
Thirdly, new use-cases arise. For example, adult colouring books is, apparently, a new growth area which is great for physical books.


There are parallels with computing. IoT and the need to do data analytics “at the edge” is a new use case for which on premises (but “on premises” out at the edge) is essential.


Another example - the equilibrium between desktops/laptops and tablets
As another example, the graph below shows sales of iPads over time. You’ll see that in 2013, there were predictions of the demise of the home PC after nearly three years of strong sales. And yet by 2015, sales were in decline.

cloudcliff1-ipad sales.png

Interestingly, if you look at the graph below which shows sales of desktops, laptops and tablets, you’ll see that after the initial surge of tablet sales, we’ve settled into an equilibrium between desktops+laptops and tablets.

Screen Shot 2017-05-08 at 10.04.04 8 May 2017.png


With cloud versus on premises, the equilibrium isn’t that simple
While looking at parallels between e-readers and cloud is useful, I think there are differences between the two situations. E-books versus physical books is a single-dimension problem - it’s about books and books only.

Cloud versus on premises is more complex because it’s about the applications and the data analytics on top of those platforms. Our research with twenty customers found that, at this point in time, we can break the cloud / on premises decision down into three areas of consideration - relative cost, relative control and relative performance. The relative strength of cloud versus on premises in these three dimensions changes over time. For example, many customers said that when they first moved to cloud, on premises storage costs (especially flash memory) were high, but they had fallen massively.

I therefore believe that the equilibrium balance between cloud and on premises will change over time as the relative cost/control/performance balances between the two options changes because both cloud vendors and on premises vendors are working hard on new innovations all the time. So, while many believe that the e-book / physical book equilibrium we have now reached will remain in place for some time, I don’t think we’ll see this level of stability in the cloud / on premises equilibrium.



The Cloud Cliff : two pieces of HPE research into customers who are bringing some of their workloads back from the cloud. 

Cloud myth : once in the cloud, always in the cloud : an important transition point occurs when a digitailly-fuelled application moves from its experimental to its strategic phase. The requirements of its compute platform can change quite dramatically.

The cloud is dead. Long live the Edge : IoT means that when there is lots of data to analyze or where fast action is required, we need to use edge compute. This edge compute can't be provided by the centralized cloud model. 

Mike Shaw
Director Strategic Marketing
Hewlett Packard Enterprise

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linkedin.gif Mike Shaw

Mike Shaw
Director Strategic Marketing

linkedin.gifMike Shaw

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About the Author


Mike has been with HPE for 30 years. Half of that time was in research and development, mainly as an architect. The other 15 years has been spent in product management, product marketing, and now, strategic marketing. .

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