Meeker: The Cloud Is Accelerating Change in the Enterprise

Mary Meeker, a partner at the venture capital firm Kleiner Perkins Caufield & Byers (KPCB), is one of the tech industry’s most influential voices. She is known for her ability to understand markets and how they’re shaped. According to Fortune magazine, she is “absolutely first rate when it comes to spotting big-picture trends before they come into focus.”

Meeker, who was a featured speaker at this year’s Code Conference, spoke about how cloud technologies are accelerating changes across the enterprise.

Cloud Creates New Opportunities

A decade into the cloud era, the market shows the success of early adopter companies that embraced cloud technologies. Meeker cited Netflix and Spotify as examples of cloud companies that have disrupted markets. From 2007 to 2017, Netflix grew from nothing to capturing 30 percent of home entertainment revenue in the United States. Similarly, Spotify, which began in 2008, owned 20 percent of global music industry revenue by 2016.

Cloud Adoption Accelerates

In order to illustrate the growth of the cloud, Meeker highlighted changes in global IT infrastructure spending. In 2013, 76 percent of IT spending went to the traditional data centers. In 2016, only 63 percent of spending went to data centers while the remaining 37 percent was spent on public and private clouds.

The growth of cloud technologies hasn’t been limited to a specific sector, geography, or platform. Growth in the public cloud is across the board. Amazon Web Services (AWS) remains the market leader, but Microsoft Azure, Google Cloud, and IBM’s cloud offerings are all growing rapidly. And as adoption has accelerated, concerns have shifted.

Meeker cited data from KP Internet Trends that compared cloud concerns in 2012 and 2015. In 2012, the top concerns were data security and cost uncertainty. By 2015, as confidence in the technology grew, the top concerns changed to vendor lock-in, and compliance and governance.

Enterprise Software Mirrors Consumer Apps

Cloud technologies help companies become more agile and innovate faster, but Meeker noted how continued growth of the cloud is also paving the way for innovation across enterprise infrastructure. For example, cloud companies are leveraging APIs and browser extensions to pioneer new methods of software delivery for both companies and end users. And technologies such as virtualization, containers, and microservices are reducing complexity and improving consistency between testing and production environments. Finally, the push away from centralization toward edge computing is pushing bold new ideas in both networking and security.

The innovation prompted by the cloud also cascades down to user experiences. Meeker noted how the expectations for enterprise software increasingly mirror those of end-user apps. Companies such as CloudHealth, Looker, Rubrik, and Stripe have all created elegant, easy-to-use B2B software. Design is increasingly important in enterprise software, and companies are delivering on software that is reliable, well-designed, and as easy to use as a consumer application.

More Apps, More Security Issues

The move to the cloud has sparked innovation and delivered unanticipated benefits but has also prompted new concerns. Today’s businesses find it cheaper to build apps and easier to adopt new one, but harder to secure all those new apps. Meeker cautioned that the majority of new apps are not enterprise-ready, and at the same time, network breaches are increasing.

Cloud computing is moving toward mainstream adoption across the enterprise and unlocking value, but companies need to monitor potential liabilities and remain open to leveraging unanticipated benefits.

Watch Meeker deliver her insightful and wide-ranging report on 2017 Internet trends.