Last year, Forrester predicted that enterprises would start modernizing core business apps with cloud computing in 2019, and that transformation has indeed taken off. 2019 also brought major acquisitions (IBM completed its acquisition of Red Hat, and VMware reabsorbed Pivotal) and surprising new alliances (Oracle partnered with Microsoft on high-speed links between Oracle Cloud and Azure, and VMware brought its Cloud Foundation to Google Cloud). The always-changing cloud provider landscape changed again — bringing frenemies closer together and expanding the reach of incumbents. Think you know who’s winning the cloud computing wars? Think again, because the battleground has shifted.

In 2020, the four hyperscale cloud vendors will generate 75% of the $75.4 billion public cloud market.

In 2020, we’ll see the public cloud market, including cloud applications (SaaS), development and data platforms (PaaS), and infrastructure (IaaS) services combined, grow to $299.4 billion. Even with slower growth on the horizon, this is tremendous success for a consolidating, maturing market on its way to half a trillion dollars in just a few years. Also, currently, 65% of North American enterprises rely on public cloud platforms, and 66% run internal private clouds.

As you prepare for 2020, we predict that the hyperscale global public cloud leaders will form more alliances while refocusing on their core strengths; leading business app vendors will ditch their proprietary infrastructures; high-performance computing will take off; the crowded cloud-native development ecosystem will deliver service meshes and serverless computing; and cloud management vendors will shift focus to security after a well-publicized public cloud data breach.

Here are three key takeaways from our 2020 cloud computing predictions:

  • IBM and Oracle will retreat to familiar territory while Alibaba threatens Google. IBM and Oracle will not exit the hyperscale public cloud market, now dominated by AWS, Microsoft, Google, and Alibaba. IBM will focus on helping enterprises use Red Hat’s OpenShift development platform — on any cloud — to modernize core business apps. Oracle will focus on its SaaS and autonomous database products, recommending Azure for general-purpose cloud development services like AI/machine learning, Kubernetes/containers, internet of things, and other emerging innovations. Oracle will ink a high-speed connectivity deal with AWS or Google — it must in order to serve its customers. Alibaba will generate $4.5 billion in global cloud platform revenue, surpassing Google, but Google will retain its third-place ranking for North American clients due to Alibaba’s small footprint in that region.
  • Open source cloud-native development battles target service meshes and serverless. The hundreds of open source projects and vendors vying for developer attention in the cloud-native development ecosystem will wage a pitched battle in 2020. Last year, Kubernetes won the battle for container orchestration and launched a host of new commercial offerings that infrastructure and operations pros are only now learning how to implement, secure, and operate. Service meshes promise even more powerful interservice networking, visibility, and security, and serverless opens new programming models abstracted completely from infrastructure concerns. While no one solution has won, Istio stands out today in the service mesh space, and Knative is a solid bet for serverless — and both will most likely be consumed by enterprises as part of a cloud-native development platform from AWS, Microsoft, Google, VMware/Pivotal, or IBM/Red Hat.
  • Cloud management players must — and will — tackle cloud security. The Capital One breach in AWS has brought attention to the next big cloud management challenge: securing apps and data in an increasingly hybrid cloud world. The hyperscale cloud leaders will ramp up investment in their native security offerings, while cross-cloud management providers must buy, build, and/or acquire security capabilities that go beyond past identity and access management. Early moves began in 2019 when VMware acquired Carbon Black to infuse security throughout its cloud management, virtualization, and container products.

Our full cloud predictions report will help you spot the trends and go behind the press releases to uncover the key cloud technologies you need to transform your business and delight your customers.