Public cloud computing continues to have great momentum as we head into the new year. Panorama Data Insights estimates the global cloud computing market size was US $371.35 billion in 2020 and predicts an average annual growth rate (CAGR) of 19% from 2021 to 2030. Further, Gartner predicts that spending on public cloud services will grow 21.7% to reach $482 billion in 2022 and will exceed 45% of all enterprise IT spending by 2026.
As we kick off 2022 at Skytap, the questions on our minds are a layer deeper. Which types of workloads are most commonly being migrated and why? What are the internal and external drivers that inform an organization’s decisions to use (or not use) the public cloud? Based on our team’s expertise, and conversations with customers and partners throughout the year, here are my top three Cloud and IBM Power Industry predictions for 2022.
Migrations of IBM Power systems to the cloud will continue to pick up momentum
Skytap’s corner of the cloud universe is running IBM Power workloads (along with x86) in the public cloud, and business is booming within this space. Skytap has seen strong overall customer growth and exponential IBM i customer growth over the last several years, and we expect this to continue. A recent IT Jungle article estimated there were around 150,000 organizations in the world running IBM i and AIX applications. From our conversations with customers and partners, we estimate that less than 5% of these customers have migrated or are in the process of migrating Power-based applications to the cloud. And as interest in cloud native value-added services such as advanced analytics and AI/ML continue to grow, cloud migration of IBM i and AIX workloads will continue to grow year over year.
It’s worth noting that COVID-19 played a role in accelerating cloud migrations as organizations looked to migrate specific workloads. These efforts served as proof of concepts for other workloads and systems. Once organizations had gotten their feet wet, they started to feel more comfortable migrating production workloads and business-critical applications running on IBM Power hardware. The momentum hasn’t slowed down. Market demand for cloud IaaS, solutions and systems integrators will continue to be strong as well, since organizations often do not have IBM i in-house expertise to guide and execute complex cloud migrations.
Main drivers of cloud migration will be data center exits, record high acquisition activity levels, disaster recovery planning and ERP workload modernization
I hear these four reasons repeated over and over again from our customers interested in moving IBM i or AIX workloads to the public cloud. Many organizations want to close data centers entirely, for simplicity and gains in scalability and flexibility. This process often happens in a specific order, with x86 workloads going to the cloud-first and IBM Power workloads last. At a point in this process, it becomes pointless to keep just a few racks in the data center.
Organizations also want to consolidate workloads in the cloud to avoid sending data back and forth between the cloud and on-premise. This avoids egress charges and lets the organizations take advantage of cloud-native advanced analytics capabilities or to support use cases like mobile that are very difficult to support with an on-premises IBM back end. It is very common to see Skytap customers be interested in the advanced analytic capabilities of the cloud.
Record-high M&A activity means that more and more companies on the acquiring end of activity will look to the cloud to consolidate data and de-silo databases, streamline operations, improve data intelligence capabilities and support workplace productivity and collaboration. Demand for DR/Backups will also continue to drive cloud migration demand as organizations look to protect IBM POWER systems directly tied to business-critical operations (i.e. ERP systems).
New partnerships and processes make even complex cloud migrations easier
Another reason that moving IBM Power to the cloud continues to gain steam is that the migration process is getting easier. The cloud migration marketplace has identified that previously hard to migrate, cloud stubborn workloads are now a green field of potential. Over the last few years, technology solutions have emerged to “lift and shift” these applications to the cloud as-is, reducing the risk, complexity, and time it takes to perform these migrations. Cloud hosting providers have been partnering with these technology solutions to make the process of moving into their cloud even simpler. In turn, technology providers have partnered with system integrators and consultants to help customers through the migration process.
This tight collaboration between technology providers, cloud providers, and service providers will continue through 2022, giving customers an option to migrate even complex, difficult workloads to the cloud without placing heavy demands on their in-house IT staff. This means that ISVs playing in the Migration/Data Protection space are advancing their products and licensing practices to be more cloud-friendly. This will put pressure on other ISVs, who have traditionally levied inflexible licensing models on their customers, to change.