The pandemic-induced lockdowns and adoption of remote working since 2020 gave cloud computing a massive boost as companies accelerated their digital transformation journey. And the best is yet to come for the sector.
According to Gartner Inc, global public cloud spending will grow 20.7 per cent to touch $591.8 billion in 2023. This is quite a jump from $490.3 billion in 2022.
At the same time, it is unsurprising because global headwinds notwithstanding, companies have realised that shifting to the cloud gives them better opportunities to scale up their business. Moreover, this transition can help them remain agile and cost effective in an increasingly VUCA world where every penny matters.
So, let’s do some crystal ball gazing on what lies ahead for world of cloud computing in 2023:
- Powering the hybrid work environment
A research by Poly has shown that organisations have seen a 72 per cent rise in productivity as a result of hybrid work. Buoyed by this bump up in productivity, remote working is expected to continue as a status quo even as employees return to physical offices.
This hybrid work-from-anywhere model will require companies to invest in cloud solutions for an equitable environment. This includes moving away from conventional client computing solutions to subscription-based virtual desktop services as well as adopting cloud-based solutions for communication and file sharing, conferencing and collaboration as well as work management.
Such solutions will offer enterprises several long-tail benefits. Key amongst them is their ability retain their talent at a time when people are prioritising work-life balance, without compromising on productivity. The other merit is the reduced cost of operations since cloud-based technologies do not need a physical space, freeing up real estate outflow.
- Sustainability Tops The Chart
In its 2021 report, consulting firm Governance & Accountability Institute found that 92 per cent of S&P 500 companies published a sustainability report in 2020, up from 90 per cent in 2019. This shows that corporate sustainability is no longer discussed behind the closed doors of a boardroom. Instead, facing increasing pressure from their internal and external stakeholders, most organisations are now taking ESG seriously as a practice.
This is where they will increasingly bank on cloud services. 83 per cent of respondents in an IDC survey stated that sustainability is the most important criteria in IT buying decisions. This is expected to go up to 85 per cent by 2025.
Yet another survey by ABB found that 72 per cent of respondents cited sustainability as the reason for increasing their spending on digital technology. 96 per cent of decision-makers also noted that digitalization is “essential to sustainability.”
Using software and cloud-based infrastructures will help corporates reach their sustainability goals. Operating applications and workloads in the cloud definitely scores over running a large data center on site, which has a higher carbon footprint.
- AI is the fact, not the fad
Artificial intelligence (AI) has been around for several years now, but it is only now that it is receiving widescale acceptance within organisations. Many companies have realised how adopting AI can help them increase operational efficiency while driving innovation and realizing better RoI on their tech spending.
In the spirit of efficiency, organisations are likelier to run their AI workloads on public or hybrid cloud, which has flexible and use-as-you-grow storage. Using public cloud will also help them access various aspects of AI, including natural-language programming (NLP) speech and facial-recognition, which they can then leverage for their own applications.
- What’s The Alternative?
Rather than place all their apps on a single cloud network, technocrats are likelier to go for platforms that support multi and hybrid cloud solutions that can support their company’s dynamic or specific goals. This cloud approach, wherein some applications are hosted on-premises and others in the cloud, will reduce complexity while helping them evaluate the merits and disadvantages before making a pivot.
This transition will also help them as companies increasingly embrace the ‘everything-as-a-service’ or XaaS in 2023, which in turn will propel cloud investments. The expanding ambit of XaaS, wherein various products and services provided over the internet, includes software, storage, security and even network as a service.
Research firm IMARC Group predicted that the global XaaS market, which reached $198.6 billion in 2021, is likely to rapidly grow to $624.1 billion by 2027.
The reason behind this growth is primarily driven by the fact that the model offers significant flexibility, scalability, speed, and costs savings. Companies no longer have to invest in expensive licensing costs or on-site equipment relying on cloud services instead and can utilise the saved capital in other core areas of their business.
- An eye on everything
Given their growing interest and investment in cloud, enterprises are also likelier to increase their monitoring on their cloud related investments. This will become more pronounced as fears of recession and economic slowdown loom large, and companies are hard pressed to ensure they make the most of every penny spent.
This is where FinOps steps in. Many companies follow this practice by using third-party cloud cost management and optimization platforms to get a firmer handle on their cloud consumption.
Leveraging FinOps tools gives enterprises an unbiased and unfiltered view of their spending across multi-cloud environments. These insights can accordingly help them manage their costs, especially depending on how their on-demand services use fluctuates.
- Cloud-Native Computing
While top enterprises have been designing software to run extensively in cloud environments, this trend is expected to see a greater uptake in the coming year. There are numerous reasons for this but topping the list when it comes to developing cloud native applications is the agility it provides over traditional software.
Forrester’s 2022 Infrastructure Cloud Survey notes that 40 per cent of firms will take a cloud-native-first strategy in 2023 as they look to increase agility and efficiency while reducing costs.
Moreover, cloud native solutions offer the speed that most users have now come to expect from cloud environments, which is the bulwark for ensuring, or even improving.
Additionally, the coming months will see enterprises outlining a unified and scalable cloud-native strategy. This will help them augment their application portfolios for better ROI since they will get faster development cycles. This move will put them in good stead when it comes to reacting to dynamic market conditions by modernizing core applications or innovating customer experiences.
Conclusion
Till a few years ago, companies were still discussing and deliberating about the need and means to move to the cloud. That is now moot because the writing on the wall is clear – they have to move to the cloud if they are in for the long haul.
Today, enterprises have realised that the need to make this transition. They have several use cases amongst their peers that demonstrates how shifting to the cloud environment gives companies a competitive edge and provide the tools their workforce needs, especially with the ongoing economic turbulence.
2023 will see cloud service providers augment their offerings leveraging AI and ML to make it more seamless and personalised than it already is. Since cloud is expected to be the tech game changer for most enterprises, they want to be the first to make it happen for their clients.
(The author is Mr. Nilesh Satpute, Founder CEO at Applied Cloud Computing (ACC) and the views expressed in this article are his own)
