The cloud hosting industry is constantly evolving from the crudeness of its formative years to playing a crucial role in business. It is currently going through a high-growth period spurred onwards by a growing dependency of cloud-based applications versus on-premise for enterprises and consistent growth in internet adoption in developing nations. As the internet grows, so does the hosting industry. But enough about the past, what can we expect moving forwards?
Even more mergers and acquisitions:
In 2016, we saw a continuation of 2015’s trend of epic Mergers and Acquisitions with big names consolidating with even greater companies. Godaddy, headquartered in Scottsdale, Arizona, recently finalized the $1.79 billion purchase of Host Europe Group last month showing an aggressive bet on the European hosting market.
GoDaddy is a strategic behemoth in the hosting industry posting over $1.6bn in 2015 and a must-watch in the industry. Noteworthy to remember is their silent kill off of their cloud computing division in 2012 showing their exceptional agility despite their large size.
Software Defined Networking will become a standard in the Data Center
Software Defined Networking (SDN) has redefined how cloud providers structure their network architecture. Less reliance on expensive physical hardware routers and less complexity mean that growth at scale will become even easier.
Worth watching is VMware acquisition of PlumGrid and its impact on the market. VMware is the definitive leader in SDN with their NSX networking product, so it will be interesting to see what they have in store for us in 2017 as the intellection assets acquired are massive.
Some of the lead engineers at PlumGrid were the same engineers who helped develop the iconic Cisco 6500 series core router, which is still heavily used in Datacenters across the world despite its 17 years of age.
100Gbps and 400Gbps has gone mainstream
With HD streaming now a global standard in media delivery, the bottleneck of cloud computing for many providers is their network port speed. Gone are the days when a 10Gbps SFP was considered an upgrade. Now it’s a bare minimum. Cloud providers are being forced to trunk together multiple 10Gbps ports leading to increased complexity and possible single points of failure, to keep up at the core fabric level.
100Gbps and 400Gbps optical transceivers are opening the door to a quantum leap in network throughput capabilities while driving down cost and complexity of network sprawl. A recent study valued the optical transceiver market at $4.6 billion in 2015 with a projected value of $41.1 billion by 2022.
Expect 2017 to be the year that 100Gbps connectivity experiences a massive drop in price allowing rapid adoption from public cloud companies worldwide.
Privacy Concerns will continue to play a role in U.S. Public Cloud adoption
According to a paper published by the Information Technology and Innovation Foundation, the Edward Snowden revelations took a toll on US based public clouds. The ITIF predicted in 2013 that “even a modest drop” in the foreign market share for cloud computing could cost the US economy up to US$35 billion by 2016. While time heals wounds, the distrust is still felt at the enterprise level amongst non-US based corporations. Even providers that offer hosting locations off of US soil are still subject to Patriot Act draconian legislation as it pertains to data seizure if company headquarters are in the USA.
Max Kleeman, the marketing director at EuroVPS, said to RPRNmag:
“In 2016,we noticed a massive upswing in interest for our Europe based hosting solutions from North American customers who are looking for a European alternative. Our US customer base has increased by over 1,000% since the Snowden leaks of 2013,which alerted them to a possible flaw in security.”
Dominance of PHP 7.x
PHP 7.0 was a breakthrough for performance in 2016. We expect to see a massive uptake in PHP 7.x as CMS developers who have not already made their applications compatible with PHP 7.0 scramble to do so. We expect friction at many mass hosting (shared) providers who may upgrade PHP globally on their servers, resulting in incompatibility issues as can be seen at NetObjects forum in a complaint about a PHP upgrade hosting provider 1&1 carried out arbitrarily.
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