Mary Meeker gave her Internet Trends 2017 talk last week, and as usual there was a ton of meaningful and valuable content in the 355 slides. She covered a ton of interesting industries such as gaming/e-sports (a personal favorite of mine), healthcare, and media.
Out of all of the big sections, however, I was most intrigued by the cloud computing section—naturally, since I work at a B2B SaaS venture studio. I wanted to take a few moments to highlight some of the big takeaways from this section of the report.
The Public Cloud (Slide 179–185)
Unsurprisingly, cloud solutions are becoming much more popular in infrastructure spend compared to traditional data centers. The ratio has gone from around 25% cloud to almost 40%. With this increase, the Public Cloud is a battleground for data center and cloud service providers. AWS dominates the space with Azure and Google Cloud (to a lesser degree) making up some ground in the past few years. This has the making for a duopoly going forward which has significant ramifications on the pricing and availability of services.
One of the most interesting data points in the public cloud section is the concerns of purchasers of cloud products. Data Security maintained it’s place as the biggest concern (although it has dropped significantly), but the significant drop-off in cost savings and control has paved the way for compliance/governance and lock-in to come in as big concerns. This demonstrates the shift in attitude toward cloud computing as a “new solution” to something that is much more highly regarded. The concern shift shows how the cloud has moved from an investment decision based on cost and security to more about implementation.
This has bode well for the new economy of companies that are attempting to create the modern version of solutions such as BI, transaction management, data infrastructure, and healthcare in the cloud.
Enterprise Software (Slides 186–188)
Over the past 15 years, the consumer expectation of business software has significantly changed. The bar for an MVP has gone up massively, and the expectation of customer service and performance has grown exponentially. We are now treating business software in the same way that we treat our own personal purchases. While our expectations of companies such as Amazon to provide free shipping, more content, and faster fulfillment increase, so do our expectations of cloud software. In the past 17 years, the mechanism of how we interact with software has changed; from the delivery (on-premise to cloud), pricing (perpetual license to subscription), UX (generic to personalized), intelligence (simple function to AI/ML), and so much more.
And with this, enterprise cloud has shifted to a customer focus, which puts an increasing onus on design and user interface. Thus, the ratio of designers to developers has massively increased in some of the most important cloud software giants out there.
Security (Slides 189–192)
Cloud applications are on the rise in the enterprise, however, most of the applications being adopted are not actually ready from a security standpoint to be used at the enterprise level.
At the same time, spam (with and without malicious attachments) has grown over 350% year over year which has directly correlated to a big rise in the amount of cyberthreats and security breaches. Bots again have started increase their share of the internet traffic, which is making the cloud an area where threats are increasing. This has major implications on how cybersecurity and data management works in the future. Investment is going up in these spaces and it is becoming an increasingly important sector in the cloud computing world.
I highly recommend checking out the rest of the deck below for other great content. All of the slides were taken from the KPCB deck, so thank you to KPCB for the data and resources.