Mark Brinda: The Changing Faces of the Cloud

Read the transcript below.

MARK BRINDA: Cloud computing is perhaps the most important technology trend in enterprise IT for a generation. Cloud computing has driven probably 70% in growth of revenue within the enterprise IT industry over the last three or four years, and that's fully expected to continue through 2020 and beyond.

What's very important to understand is what segments are driving that growth and how that's evolving, so that you can aim at the right places in the market if you're a provider. As we look at the market three, four years ago, a set of customers we called transformational customers were driving the majority of the demand. These were earlier-stage companies, rapidly growing, more inclined to lean in on experimental technologies.

And what's happened now is a very different cohort of companies are driving growth. We call them the slow and steady segment. By number, they represent roughly half the companies out there in the world, but up until recently, just a small portion of the total spend on cloud computing.

That has completely changed. As of 18 months ago, when we surveyed the market, these companies had just started to migrate some parts of their environment into the cloud and expect that to dramatically ramp over the coming years, such that by 2018, that segment will be the largest in the market in terms of dollars of spend. So as we pull back and look at what successful providers are doing to win in this market, there are a few things that they do particularly well.

One is narrow down the set of battlegrounds that they're focused on to an essential few where they're really going to invest to win. Second, they segment the market in those battlegrounds to really understand what the nature of demand is and how that's evolving, and narrow further their focus to just that segment where their offerings are most likely to resonate. And third, perhaps most importantly, they realign their entire operating model (how they go to market, how they develop offerings, how they provide service) to line up against those segments in that target battleground, so they really get the entire machine humming on all cylinders.

Read the Bain Brief: The Changing Faces of the Cloud