The Commodification of Cloud

Lori MacVittie Miniatura
Lori MacVittie
Published July 19, 2022

Every industry and technology go through the same cycle. What is new becomes standard, and what is standard becomes commodified. What is commodified often becomes the foundation for a new cycle of innovation, and the hype cycle begins anew.

When cloud computing burst on the scene, its arrival was heralded as game changing. Public cloud had the potential to drive down the cost and time to deliver applications by replacing manual operations with a more automated approach and eliminating the investment in hardware. To be fair to public cloud, it did exactly what it promised. It drove down the cost—and time—to deliver applications and continues to do so today.

It has fueled a new generation of cloud-based services that span the gamut from software to platforms to security and delivery. Cloud’s introduction of differentiated services (load balancing, security, acceleration, identity, etc.) was the first indication that cloud was entering a stage of standardization, as the value was no longer in the compute, but in the app security and delivery services one could access with ease. Now we see the industry shifting toward those same services offered as competing products delivered via cloud-based platforms. The hype cycle for a new iteration of cloud—XaaS—is on the rise.

Because cloud taught the entire industry how to operate infrastructure and applications more efficiently.

Look under the hood of any XaaS provider today and you’ll almost certainly find a cloud-based infrastructure. The scale and speed of the cloud model is undeniable, and the benefits was seen in the ability of SaaS and XaaS to ramp up to meet unprecedented demand during the global pandemic.

And it was Google, ten years ago, that introduced the practice of Site Reliability Engineering (SRE) as a better way—a cloud-like way—to manage and operate fast, scalable, and secure infrastructure and applications. Today, our annual research shows that 77% of organizations across industries have adopted or plan to adopt the approach, and nearly every company operates in multiple public cloud environments. The lower cost, greater efficiency, and speed of delivery offered by public cloud is no longer restricted to public cloud. The commodification of cloud is complete.

Public cloud is in no danger of losing relevance. Public cloud is a part of nearly every organization’s strategy, and there are no signs that will change in the near future. Every “state of cloud” report notes that adoption is rising, especially across the SMB market. What is changing is the organization's approach to the use of application security and delivery services to secure and scale applications—in the cloud and on-premises.

The shift toward XaaS and the edge is real and accelerating. The security-as-a-service market, in particular, is booming and there is an explosive amount of activity in cloud-based observability and automation platform services. Edge platforms—almost universally architected on a cloud-based model—are rising fast to enable demand to deploy data-processing and digital experience application workloads as close to their consumers as possible.

Public cloud is now a commodity, but its impact is far from over and the innovation cycle it has enabled is just beginning.