The 2017 version of venture capitalist Mary Meeker’s highly influential “Internet Trends” report is out, and as always it’s required reading for just about anyone who works in the technology industry.
New Relic has covered these reports in the past, and Meeker’s latest insights are once again too important to ignore. But while you may want to check out what the Kleiner Perkins Caufield & Byers partner has to say about growing internet activity in China and India, slowing smartphone growth, big changes in media and advertising, and how healthcare is reaching a “digital inflection point,” we’re going to focus on a topic near and dear to our hearts here at New Relic: her thoughts about how cloud computing is transforming the enterprise.
- This Week in Modern Software: Mary Meeker’s State of the Internet 2016
- This Week in Modern Software: Meeker’s State of the Internet 2015
The cloud is accelerating change across enterprises
Meeker makes three key points about the cloud:
- Cloud adoption is reaching new heights and creating new opportunities.
- Customer expectations for enterprise software now mirror those for consumer apps.
- As more apps move to the cloud, that creates more security vulnerabilities.
Let’s look at each one a bit more closely.
1. Cloud adoption is reaching new heights and creating new opportunities
Meeker uses a 2017 RightScale survey to note that while Amazon Web Services (AWS) holds a wide lead as the most popular cloud platform used by enterprise companies, competitors like Microsoft Azure and Google Cloud Platform are also rising in popularity—with many companies experimenting with or planning to use these services in the future.
Given that growth, it’s no surprise that Meeker’s report cites IDC numbers that indicate spending on cloud infrastructure grew 37% to $36 billion in 2014, and is approaching the levels of spending on traditional data centers.
The rise of the cloud is also paving the way for infrastructure innovation, Meeker says, citing new methods of software delivery like APIs and browser extensions, and the ability of containers and microservices to simplify the software development process and reduce the complexity of managing apps.
2. Customer expectations for enterprise software now mirror those for consumer apps
Historically, enterprise apps have not been known for their great user experiences. But now enterprise apps must compete for usage and mindshare against highly sophisticated consumer applications delivered via the cloud.
Enterprise users are consumers too, and their experience with fast, reliable, frequently updated consumer apps is helping to spark enterprise software’s move from on-premise software to SaaS and ultimately mobile-first smart apps, Meeker says. Notably, enterprise app success is increasingly measured by the same metrics used for consumer apps, such as Daily Active Users (DAUs), Monthly Active Users (MAUs), and Net Promoter Scores (NPS). Fortunately, she adds, cloud-enabled enterprise apps are both cheaper to build and easier to adopt.
Not surprisingly, the trend toward “consumer quality” enterprise apps is boosting the importance of design, and many companies are responding by boosting their designer-to-developer ratios.
3. As more apps move to the cloud, that creates more security vulnerabilities.
Meeker uses a 2015 Bain study to note that concerns of cloud users are slowly shifting away from data security and “cost uncertainty” and instead to issues like vendor lock-in and compliance. But she also acknowledges that more cloud apps can lead to more vulnerabilities, and that cyber-threats are rising in severity.
New Relic is all in on the cloud
As a cloud-native SaaS vendor, New Relic totally agrees that the cloud changes everything. From our flexible cloud pricing option to helping customers like REI embrace the cloud, we’re all about delivering Digital Intelligence at Cloud Scale (in fact, that’s the theme for our FutureStack user conferences around the world).
We are happy to say that the specific trends Meeker cites align perfectly with our approach. The growth of the cloud in the enterprise is central to the products we create, and we’ve long discussed the importance of using the cloud and other modern software techniques to empower better design and user experiences in enterprise software—something not every company can honestly claim. And, of course, we take cloud security seriously, too!
From our standpoint, Meeker’s recognition of the cloud’s growth and importance is but more confirmation that the future of enterprise software is in the cloud.