Global Cloud Dominance Brings New Opportunities, Challenges for Partners

Consumer and business applications are contributing to the growing dominance of cloud services over the Internet, according to the seventh annual Cisco Global Cloud Index. The updated report focuses on data center virtualization and cloud computing, which have become fundamental elements in transforming how many business and consumer network services are delivered.

For business users, enterprise resource planning (ERP), collaboration, analytics, and other digital enterprise applications represent leading growth areas.

The study forecasts global cloud data center traffic to reach 19.5 zettabytes (ZB) per year by 2021, up from 6.0 ZB per year in 2016 (a 27 percent compound annual growth rate. Globally, cloud data center traffic will represent 95 percent of total data center traffic by 2021, compared to 88 percent in 2016, according to the report.

In the past, security concerns have been a major barrier to cloud adoption. Improvements in data center governance and data control have helped to address security concerns, reducing enterprise risk and better protecting consumer information.

Additionally, the growth of Internet of Things (IoT) applications such as smart cars, smart cities, connected health and digital utilities requires scalable computing and storage solutions to accommodate new and expanding data center demands. By 2021, Cisco expects IoT connections to reach 13.7 billion, up from 5.8 billion in 2016.

The increasing need for data center and cloud resources has led to the development of large-scale public cloud data centers. The report expects that there will be 628 of these hyperscale data centers globally by 2021, compared to 338 in 2016.

“Data center application growth is clearly exploding in this new multicloud world,” said Kip Compton, vice president of Cisco’s Cloud Platform and Solutions Group. “This projected growth will require new innovations especially in the areas of public, private and hybrid clouds.”

Among the highlights of the report predicting growth by 2021: Big data will account for 20 % of traffic within data centers, compared to 12% in 2016; video streaming will account for 10% of traffic within data centers, compared to 9% in 2016; and 75% of the total cloud workloads and compute instances will be SaaS workloads and compute instances, up from 71% in 2016.

Channel Impact^®
The data underscores strong opportunities for partners working the high-end data center space.