This week I had the pleasure of delivering the opening keynote at CloudExpo New York. It was amazing to be back to be in the great city of New York with thousands of cloud enthusiasts eager to learn about the next step on their journey to embracing a cloud-first world.

Over the past dozen years, I’ve had an opportunity to get a very unique perspective on the evolution of cloud. This started with experiences working at start-ups in Silicon Valley and more recently, helping run the BizTalk and Azure businesses for Microsoft. I’ve watched the state of IT change from being primarily managed in-house with a clear aversion to outsourcing, to a largely mobile device and service-driven, Public Cloud-friendly environment.

The start of this shift began all the way back in the original .com bubble, as application service providers and modern colocation began to increase in popularity. After the .com bubble burst however, it only made sense that businesses wanted more control, quality and stability, and they felt managing their IT in-house was the best option.

But as virtualization and the consumerization of IT began to rise, and SaaS and trends like bring-your-own-device began to emerge, I saw an incredible thing happen. Slowly, organizations became more comfortable moving their IT outside of their own walls in exchange for flexibility and agility. This paved the way to cloud as we know it today. But, what may be the most fascinating transformation happened in 2009 – in what I like to call the perfect storm.

To say 2009 was a tough year economically would be an understatement. Resources were more strapped that they had been in years, and the credit crisis placed severe limits on access to capital, but at the same time, the rate of instance growth was much faster than IT could support. The result was that IT was forced to evolve to keep up. Enter cloud as we know it today.

Over the past five years since the economic crisis, I’ve had thousands of conversations with customers, and the prevalent theme of these conversations has shifted from these customers asking, “What is the cloud?” to, “Why do I need the cloud?” and now, “How do I get the benefits of cloud, quickly?” This shift tells me that cloud is here, and those who do not embrace it will be left behind.

We believe this is one of the reasons why we’re seeing substantial growth of our own Azure platform. With 57 percent of Fortune 500 companies already using Azure, we’re signing on approximately 1200 users a day, and we’ve been doubling compute and storage usage every six to eight months for the past four years. The other reason, of course is that we’re continuously expanding the services we deliver to better support customer needs.

With this rapid delivery of cloud innovation, I’ve already seen customers embrace cloud to optimize how they do business, enhance enterprise mobility, and make better use of their data. I was thrilled to spend last week talking with customers reflecting on their current journey to the cloud, and helping them understand how to take the next step to truly transform their business. We talked a lot about the next five years of cloud, and how to prepare businesses to take advantage of what’s to come, with the right partner.

When it comes to the right partner, I talked a lot about what businesses should look for. I believe innovation will accelerate and prices will drop, leading to a level of consolidation in the space. Those who will remain standing are those who can adapt (and have previously adapted) to the disruption that will continue. I believe the principles to survival will be:

• Capital – do vendors must have the capital to invest in swift growth and respond to consistent disruption? The order of magnitude for these capital outlays will be in the billions, or even tens of billions of dollars.
• Commitment – is this business the focal point of a company’s overall strategy? Are there options beyond the public cloud? Or will the vendor entrench itself in its customers’ business through thick and thin?
• Credibility – which firms have the ability to innovate, and adapt to the inevitable disruptions that will occur in this industry? If there’s one thing for sure, everyone will be disrupted. Who can stand test of time; who has been through multiple disruptions?

I hope those who joined us onsite – as well as those who joined us virtually – learned a little something from us over the course of the event. I know I continue to learn lot from all of you and I look forward to seeing where the next phase of cloud computing takes us.