In March 2006, Amazon launched Simple Storage Service (S3). Although few people paid much attention at the time, the announcement of S3 marked the beginning of a great migration of data from on-premises storage to the cloud. The first generation of cloud storage products—as represented by Amazon S3, Google Cloud, and Microsoft Azure—made the best of disk technology as it existed a decade ago.
Now, as disk manufacturers like Seagate and Western Digital usher in a new generation of high-density drives using new technologies, a new breed of service providers are re-architecting cloud storage to provide vastly improved performance and price. The stage is set for “Cloud Storage 2.0” vendors to dominate the storage market.
My long-term prediction for the cloud storage market is that it will become a utility, like Internet bandwidth and electricity. Just about every application on the face of the Earth needs storage. YouTube, iCloud, and other media-centric applications have so much data that storage has become their dominant operating cost. As the cost of storage drops—my company, Wasabi, is one-fifth the cost of Amazon S3—applications that could never have made economic sense at Cloud 1.0 prices suddenly start to look practical.
Remember when Internet access was primarily dial-up services like AOL? Who would have dreamed that in just a few years we would be watching feature-length films in HD video? With the price of storage now set to drop by almost an order of magnitude, a new era in cloud storage will emerge with behaviors that are impossible to predict.
Nevertheless, here are five predictions for 2018:
1. Storage tiers, like Nearline, Coldline, Reduced Redundancy, Infrequent Access, Glacier, etc., will disappear, along with on-premises storage.
2018 will be the year cloud storage becomes a one-size-fits-all commodity. Just as you only have one kind of electrical outlet in your office, in the future, cloud storage will become a fast, cheap, and ubiquitous utility that will be available to use for almost any application. Proprietary APIs (application programming interfaces), like Amazon’s and Microsoft’s, will give way to standardization. Google recently announced that it will be supporting Amazon’s S3 API, and it’s pretty clear that S3 is emerging as a de facto standard.
Users, meanwhile, are demanding interoperability and an end to vendor lock-in, further strengthening the requirement for interoperability. Large-scale, on-premises storage, meanwhile, is on its way to extinction as cloud storage prices undercut the total cost of ownership of on-premises storage by 80 percent or more.
2. New laws and regulations for data governance and compliance will drive the move to cloud storage.
With new regulations expected to go into full effect in 2018—like Europe’s General Data Protection Regulation (GDPR)—the manner in which companies store their data will become more unified. Certification for HIPAA, FINRA, CJIS, FERPA, and others is becoming an arduous and expensive task, and only cloud storage companies will be able to keep up with all the compliance requirements, further accelerating the migration of on-premises data to the cloud.
More and more countries are requiring data to be stored within their country’s borders, and Cloud Storage 2.0 vendors will have to be prepared to support a relatively large number of small data centers, rather than just a handful of very large data centers. Those who can be nimble and adapt quickly to location regulations will win the worldwide market.
3. The “Internet of Things” will generate more data than we realize.
In a 2017 Internet of Things (IoT) study published by Cisco, nearly 75 percent of surveyed executives reported using IoT data to improve their businesses—with 95 percent planning to launch an IoT business within three years. It seems that nearly everything is producing data nowadays—your watch, your car, jet engines, trucks on the highway, even your fridge. Predictions for the amount of data stored for IoT purposes don’t fully take into account the effect of drastically lower cloud storage costs. Lower storage costs tip the balance of keep versus toss in favor of keeping everything forever. In 2018, this data will surpass expectations, and there will be a huge incentive to store more data for future analysis.
4. Tape archives are finally headed to the graveyard. “De-archiving” will become a frequent theme in 2018.
Until the advent of Cloud Storage 2.0, tape was the most practical way to store large amounts of data for a long time. But it comes with a hefty cost—it’s too slow for anything other than archival storage. The total cost of tape ownership is estimated by big users to be in the neighborhood of 0.5 to 0.7 cents per gigabyte per month. That’s indeed a lot less than Amazon S3 or on-premises hot storage. But it’s higher than Cloud Storage 2.0 prices—Wasabi is 0.39 cents per gigabyte per month.
So, for the first time, it makes sense to migrate those old tape archives to a hot cloud storage service. Also, with the increased use of data analytics, people are finding business value in old archival data. Services like YouTube prove that there is an audience of everything, no matter how specialized or obscure.
Video is by far the biggest data type on the Internet by volume. Moving these assets back into hot storage allows them to be marketed through all the new streaming channels that are available today. In 2018, the media and entertainment industry will embrace “de-archiving” and create new revenue streams from old content.
5. The danger of data loss unfortunately persists, but immutability mitigates the risks.
2017 was the year of ransomware. People are starting to realize that the real risk to their data is not equipment failure, but things like accidental deletions, sabotage, and software bugs. Cloud storage has become so reliable that data loss due to things like disk failures almost never occurs, especially with many vendors introducing the option of immutability.
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