Cloud-Native: The Engine Driving a Trillion-Dollar Economy

You’d be hard-pressed to find a large business anywhere in the world where cloud-native wasn’t at least being discussed. For a philosophy that’s still in its relative infancy, it’s become ubiquitous among those who want to level-up their agility, responsiveness and time-to-market. According to IDC, more than 500 million digital apps and services will be developed and deployed using a cloud-native approach by 2023.

That’s hardly surprising given the post-pandemic landscape many businesses now find themselves in. As well as accelerating cloud migration in terms of productivity and daily operations, it’s also prompted many businesses who had one foot in the cloud-native door to fully embrace it and run with it. At the height of the COVID-19 pandemic, the four largest public clouds continued to beat expectations and post impressive revenue growth year-over-year. AWS enjoyed 29% growth, Microsoft Azure was up 47%, Google Cloud achieved 43% growth and Alibaba grew by an impressive 59%. The market cap of the public cloud industry has grown 25x in the last decade, reaching $1 trillion in February 2020 with a 45% CAGR. If you think that’s impressive, the market cap is expected to double and exceed $2 trillion by the end of 2021. It’s clear this industry is going places, but what’s it all about?

Cloud-Native is More Than a Technology, it’s a Philosophy

Cloud-native applications are often referred to as “citizens of the cloud”, which not only means they reside there but that they were built there, from the ground up, using every advantage that cloud architecture has at its disposal. Cloud-native applications are designed according to the principles of cloud architecture, making them faster and easier to develop, deploy, update and maintain.

Cloud-native is also the shared philosophy of the open source community and the CNCF (Cloud Native Computing Foundation), founded in 2015. Its objective is to build the cloud-native ecosystem through projects, conferences and the sharing of knowledge. By leveraging cloud-native principles, companies can bring new ideas to market faster and respond sooner to customer demands. Importantly, they offer on-demand access to computing power along with modern data and application services for developers.

The three concepts critical to understanding the cloud-native philosophy are microservices, containers and, of, course, DevOps. Let’s explore microservices and containers in a little more detail to help us get more a grip on what cloud-native is and why it’s so important moving forward.

Microservices: The Building Blocks of the Cloud-Native Approach

Suppose a few loosely coupled bricks could be developed to independently provide a valuable software function. Now gather those bricks together and start building a sturdy wall, and you begin to see microservices architecture take shape. Any of those bricks can be removed and replaced at any given time, but the wall still stands as the foundation of your online infrastructure. Each brick is a microservice: An independent piece of software that can link up with other microservices via APIs to create a cohesive whole. Because data and code are neatly encapsulated together, businesses can take a more modular approach to development and deployment, allowing them to scale their services up (or down) according to demand. This is where containers enter the fray.

Containers: Vessels for Development and Deployment

A container does precisely what its name suggests. Just as shipping containers completely transformed the economics of distribution by creating new global consumption patterns, busy port towns and new industries, virtual containers transformed the cloud migration process, giving more power to developers and driving the DevOps philosophy. Containers provide a consistent software environment for developers and testers all the way from development to production. They offer an encapsulated lightweight runtime for application modules, with multiple applications deployed on the same server, each running in their own execution environments isolated from one another, thus avoiding conflicts, errors and failures.

Containers provide higher server utilization rates, scalability of modules, interoperability and ease of integration. One simply has to build out a configuration in an orchestration tool such as Docker or Kubernetes once, and all developers can then run the system on a run command irrespective of the underlying operating system. Containers offer freedom, flexibility and unparalleled agility in the cloud.

The Future of Cloud-Native

Many businesses who think they are cloud-native are actually only cloud-adoptive. As we’ve outlined above, there’s more to being cloud-native than simply operating in the cloud via “lift and shift”. It’s about building applications in the cloud from the ground up, using cloud principles and architectures. Through a complete philosophy that leverages microservices, containers and DevOps, cloud-native offers better scalability, elasticity, security, significantly lower costs, and astronomical speeds to develop and launch applications.

Cloud-native is a high-growth ecosystem that attracts a lot of talent and investors. The cloud-native philosophy is likely so interwoven in our inevitably data-driven future that the $2 trillion market cap referenced in the introduction to this piece might actually be an understatement.

Manish Prasad

Manish Prasad is vice president - M&A integration at Infostretch, a Silicon Valley digital engineering professional services company.

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