Prediction is Hard: Grading My 2011 Cloud Predictions

This is a scorecard on my 2011 predictions, graded on an A-F scale. I'll follow up with my 2012 predictions soon. Feel free to comment and disagree with the grading!

1. There will be a significant influx of shared hosting and telecom providers into the IaaS marketplace.

Grade: A

There are now several hundred IaaS providers of various sizes, many (but not all) of them existing hosting and telecom providers.

2. Open source technology stacks will continue to dominate in IaaS / PaaS, but Oracle will come out with some strong offerings that begin to entice enterprise applications to the public cloud.

Grade: B

Open source definitely continued to dominate the scene. Indeed, it expanded as companies like dotCloud and appFog added a variety of open source language platforms, while VMware even introduced its Cloud Foundry open source PaaS platform layer that works with many open source (and eventually commercial) technology stacks.

As predicted, Oracle came out with some offerings in both IaaS and PaaS. While its public cloud offering generated a lot of buzz at Open World, most of it was negative. And, if the reaction at Cloud Expo Santa Clara is any indication (the Oracle presentations had nearly no attendees), customers are unimpressed and possibly annoyed by Oracle and its approach to cloud.

3. Amazon's earnings from AWS will exceed those of the rest of the business, and by the end of the year there will be rumors of a spinout.

Grade: D

I should have known better than to predict something (AWS earnings) that can’t be verified, since Amazon does not break out the numbers. Most observers believe the AWS business was about $1B in revenue in 2011, and it is likely more profitable than the retail business. Nevertheless, it’s hard to know. As for rumors of a spinout, I haven’t really heard any. This is particularly puzzling given that AWS employees cannot even travel to many states in the U.S., and they are limited in where they can build data centers, because of the sales tax nexus issue.

4. Consolidation in cloud capabilities - particularly PaaS and services that add value to IaaS - will accelerate.

Grade: B

There is no question that cloud acquisitions accelerated in 2011 across layers of the stack, particularly with multi-billion dollar transactions like SuccessFactors (SAP) and RightNow (Oracle). Other notables include Cloud.com, iGWare, opSource, enomaly, Trellia, Gluster, DemandTec, Platform Computing, ITKO, and VKernel - these all have at least some connection to cloud computing and in most cases the valuation was spruced up by it. Nevertheless, these acquisitions are very point-solution oriented and the activity as a whole felt more like precise rifle targeting than wholesale shotgun consolidation.

5. There will be a rollup of multi-tenant open source SaaS providers.

Grade: D

The only reason this is not an F is that I hedged on the original prediction and indicated that it might be early. In fact, it seems like there is some continued funding of new entrants into this area and I didn’t see any acquisitions.

6. The numerologists will be out of control on Veteran’s Day.
Grade: C

They were, but really no more than on Pi Day (March 14).


Overall GPA: 2.33 (C+). Wow, prediction is hard!