2016 Cloud Predictions

by Thomas Hansen, SVP of Sales & Channel Dropbox

When I work from our Seattle office I have a great view from the 64th floor of the cloud formations that frequently gather over the mountains that ring the city. If I am in a philosophical mood, I map the trends I see in cloud computing onto those weather systems. Sometimes, this view from the clouds seems to coincide with what is happening in the world of technology.
With that in mind, I asked my colleagues to tell me what they see when they think about the cloud in the coming year. Ask a bunch of smart people about something amorphous and you will get a diverse set of answers! The striking thing is how many of the ideas people came back to me with are about the impact of the cloud on the ways we work together.

What the cloud really does, on so many levels, is to increase our flexibility, our ability to change. For businesses to grow and prosper, the cost of change has to be less than that of the benefits. The pay-as-you-go, pay-for-what-you-use model of cloud services rewards changing your mind instead of anchoring on sunk costs. In 2016, we see this culture of change permeating more (and larger) businesses. The cloud is increasingly about file storage networked together with compute functions in sophisticated ways. The result, my colleague Rob Lai tells me, is “a paradigm shift away from the solution stack towards an open network architecture.” The cloud of clouds is upon us, and with it, increased opportunities and complexities to master.

The Application Cloud

Yes, more and more data is migrating to the cloud, but what is really interesting is what people are doing with it there. In the application cloud, we don’t just store documents, we collaborate on them in real time. The single action of moving a file into a cloud folder can trigger a complex workflow that results in other files being added to other folders. Companies will increasingly harvest value from their own data with learning applications that look for actionable patterns. And many of these applications will help maintain the security and integrity of data. 
But the really revolutionary thing about the application cloud is that once your data is cloud addressable you can treat many applications as interchangeable and composable services. By interchangeable I mean that you can choose the best-in-class solution for your particular problem and easily switch to another as your needs change or better options emerge. Composability means that you can package collections of applications together in very individualized ways to create dashboards or other custom services.
Although some forward-looking companies are all-in on the cloud, and many new companies are born to the cloud, hybrid solutions will be a popular transition strategy for those with existing on-premises systems. IDC predicts that 80% of enterprise businesses will adopt some sort of hybrid-solution in 2016. The crucial aspect from an application standpoint is the addressability of your data. As long as there are secure IP addresses and APIs to a company’s data, the physical location is increasingly irrelevant.

The Collaboration Cloud

The most significant prediction we will make is that the wide adoption of cloud services will make working together simpler. The cloud has become a universal data layer that people can access on a highly customizable, as-needed basis. Crucial to making this work are methods to wrap communication around documents and workflows so that each message has maximum context with minimum effort.
Dropbox CEO Drew Houston formulates this as “storage + communication = collaboration.” Country manager for Dropbox Japan, Hiroaki Kawamura, outlines it to customers in Japan by predicting that, “traditional cloud storage will evolve into Cloud Storage 2.0.” 
This next stage refers to how cloud services, given the proper policies and permissions, have the ability to create layers of very valuable data about files. Our head of engineering, Aditya Agarwal, points out that to be actionable, this metadata — whether it’s the network of people a file has been shared with or comments about content within the file — has to be made available to users through applications that are simple and easy to use.

The Learning Cloud

The next prediction builds upon the previous one. Data and metadata do not have to be comprehensible to humans to be useful. While the focus for human-facing applications is towards simplicity and delivering just what is needed and no more, a growing share of the cloud is devoted to machine-facing applications.
I don’t mean scary AI’s from Hollywood movies. I am talking about all of the processing power behind things like e-commerce recommendations, self-driving cars, and personal assistants on your phone — the Internet of Things talking to itself. Enterprise Insights lead Will Zhou thinks that the learning cloud will grow in 2016 because the price of raw computing power continues to go down as the number of devices multiplies and the amount of data stored in the cloud grows exponentially. Increasingly, all of this big data will go through learning systems to deliver the few bits of information that a human needs to see.
From a business context, this means that as we move more data to the cloud, more and more of it will available for real-time analytics and other learning processes. The business value of a company’s own data will increasingly become a competitive advantage, especially when intelligently combined with outside data sets.

The Workflow Cloud

The same network architecture that makes wiring together data sets easy also makes it possible to build internal workflows and external products out of collections of third-party services. Rob Lai points to the example of how Uber has built its service on top of APIs from Google for maps, Checkr for background checks, Braintree for payments, and Twilio for automated text messages. Companies no longer have to build it all in-house — and it’s often better if they don’t.
The benefits of this composite approach is that new product features and workflows can be much quicker to implement and experiment with. A simple example of this kind of combination that we see with some of our customers is using DocuSign or EchoSign to sign contracts that are saved to Dropbox and synced to Salesforce. There are many ways to string services together in the cloud to streamline production, from record labels automating the creation of watermarked content and distributing to radio stations, to publishing companies dragging manuscripts into folders to make e-books.

Security and the Cloud

None of this innovation is possible without trust and security. Far from being a merely technical concern, security is at the heart of what makes the cloud valuable for businesses. As Amazon chief technology officer Werner Vogels says, cloud companies strive to make the “best locks” for their customer’s data. Our head of trust and security, Patrick Heim, sees a growing percentage of companies understanding that there are security advantages of cloud. 
Cloud companies can operate on a scale that allows them to find, hire, and retain the best security talent from a scarce and competitive talent pool. Security is an ongoing battle that requires smart people to constantly assess and adapt to agile attackers. Cloud companies are also in a position to monitor the activity of attackers across a huge number of users and massive pools of data. Combined with the learning systems mentioned above, they are devoted to and capable of identifying and responding to a broad range of attacks and anomalies.
Many of the best tools that secure data are now hosted in the cloud and many are also natively integrated with a variety of cloud providers. Cloud-savvy companies have evolved to multi-cloud environments fortified with cloud-ready security tools. We commonly see cloud-enabled security architectures that integrate single sign-on, identity management, eDiscovery, security information and event management (SIEM), data loss prevention (DLP) and other capabilities. API-based integration enables flexibility in selection of services and the ability to swap security providers in and out as adversaries continue to innovate.

The Modern Cloud Company

Finally, in 2016, we begin to see a clear outline of the modern cloud company. These companies will have most (or all) of their data in the cloud. They will use applications to address all of this data in ways that maximize the time and value of their people. Our preliminary research indicates that these companies are more productive than their less modern competitors. They also have happier and more creative employees.
Other internal research suggests that students have work patterns similar to creatives in the business world, no matter their specialty or personality type. The innovations of the cloud will have a big impact on education in 2016 as more and more students learn the flexibility and collaboration skills needed for the 21st century workplace. Our head of education, Jason Katcher, thinks the intersection of the cloud and mobile will make learning more accessible and ubiquitous — we all have lots to learn.
Many companies are still cautious about this transition, but the advantages have become too clear to ignore. As I wrote last month, the cloud has democratized ITfor all companies — and those that embrace it fully have the most to gain. Will you change the way your company works in 2016, or have you already? I encourage you to challenge yourself on this front in the coming year!

Originally published at www.linkedin.com.