What can we expect from the third decade of cloud computing? [Q&A]

Cloud has been a cornerstone of the computing industry for many years. As it enters its third decade in 2024, economic pressures, anti-monopoly moves and more mean things will look different for hyperscale providers.

We spoke to Amol Dalvi, VP of Product of Nerdio, to discuss what we can expect to see over the next 10 years.

BN: There have been recent moves towards a more hybrid model of cloud computing, can we expect this trend to continue?

AD: The trend toward a hybrid cloud model has been gaining momentum, and it will likely continue well into 2024. With the hybrid cloud model, organizations gain access to a combination of on-premise, private, or public cloud services. And IT leaders are finding that products like Azure Stack HCI can help unify the deployment and management of applications and workloads across clouds and manage resources. However, it's worth noting that despite the current trend toward hybrid cloud adoption, there are instances/technologies in which a single cloud strategy makes the most sense. For example, Gartner recently shared in the 2023 DaaS Magic Quadrant that the majority of organizations continue to opt for a single cloud platform for DaaS. This preference is driven by the centralized management capabilities, scalability, and enhanced security offered by a singular cloud platform.

When choosing the right cloud environment, IT teams have also been carefully eyeing costs associated with cloud computing. Amid these cost considerations, organizations are recognizing the need to evaluate and optimize their cloud utilization, taking into account evolving business requirements, cost considerations, and other factors such as data compliance, governance and latency. Of course, there is no one-size-fits-all approach when it comes to cloud adoption. In this landscape, the decision to adopt a hybrid vs. single cloud approach becomes more nuanced, with cost playing a role alongside other critical considerations like geographic considerations and specific service offerings from different providers.

BN: How will the growth of edge computing, AI and IoT device usage affect cloud demand?

AD: Edge computing, AI and IoT device usage have driven up demand for cloud services to ensure that companies have the data storage capabilities and flexibility to handle these tools. For example, despite costs associated with generative AI applications like ChatGPT or Microsoft's Copilot, demand for AI tools is only likely to increase as companies evaluate the generative AI tools available from the major cloud providers and the ways that these tools can become embedded in employees' everyday tasks. In fact, a recent study found that four-fifths of organizations plan to increase their investments in AI by over 50 percent by the middle of 2024. If anything, IoT usage and AI development have called for a greater focus on edge computing as a way to reduce latency and enable more real-time analysis of data, provide intelligent insights, etc. All of this is creating a much higher demand for cloud tools that support AI & IoT and allow for greater productivity across an organization.

BN: How are economic considerations shaping the cloud landscape?

AD: According to Gartner, worldwide end-user spending on public cloud services is forecast to grow 20.4 percent and reach $678.8 billion in 2024. Despite this optimistic outlook, many organizations are continuing to stay vigilant about the current economic landscape, recognizing that budgets are likely to be impacted.

As company leaders evaluate ways to reduce costs, many are considering workforce reductions or consolidating their technology stack to reduce inefficiencies. For companies who have made some of these difficult choices, optimizing their cloud usage may ease any additional challenges. For instance, lowering technical debt -- which normally increases due to sunk costs in laptops, hardware, and other resources when layoffs occur. Ultimately, the cloud will continue to provide efficiency, scalability, flexibility, and cost optimization that organizations can harness during economic hardships.

BN: Can we expect more government regulation and intervention to control hyperscale providers?

AD: The short answer? Yes, I believe conversations regarding the extent of government involvement in regulating cloud hyperscale providers will continue in 2024 and beyond. Cloud providers continue to play a critical role in the global technology infrastructure and concerns about data privacy, security, market dominance, and fair competition have prompted conversations about regulatory measures. However, as advancements in the cloud continue, it is crucial that discussions around regulation and governance evolve as well. All stakeholders in the technology landscape need to be equipped with essential knowledge to effectively navigate this evolving landscape.

BN: Why are good partnerships key to getting the best from cloud investments?

AD: Strong partnerships are crucial to maximizing the benefits of cloud investments for several reasons:

• Gaining additional expertise and support: By establishing partnerships with cloud service providers or MSPs, organizations will inherently gain valuable expertise and support as these partners are well-versed in the intricacies of each hyperscale cloud platform and its licensing, architecture, etc. In addition to knowledge, partners can offer guidance, best practices, and assistance in optimizing cloud resources -- giving time back to organizations and their IT teams to focus on the critical tasks at hand.
• Access to resources and technologies: Collaborative partnerships grant organizations access to a diverse range of resources, tools, and technologies offered by cloud service providers. This accessibility enables organizations to streamline and optimize their cloud operations by scaling down tech stacks that might be both costly and inadequate for their needs.
• Cost efficiency: Fostering partnerships can lead to negotiated pricing, discounts, or custom packages based on the organization's requirements. Although outsourcing may seem like an additional organizational expense, it will inherently leave the organization the ability to optimize the cost of cloud services.
• Mitigate risks: Partnerships help mitigate risks associated with cloud adoption and ongoing management. With the support of experienced partners, organizations can navigate challenges, ensure compliance, and implement robust security measures, minimizing potential pitfalls.
• Scalability and Flexibility: Partners can assist in scaling resources up or down based on fluctuating demands, ensuring that the organization optimally utilizes cloud services without overcommitting or underutilizing resources.

And the list doesn't stop here. Overall, strong partnerships play a pivotal role in realizing the complete benefits of cloud investments. As businesses prepare for the challenges and opportunities of 2024, it is an opportune moment to reassess both business and technology requirements to ensure the right path toward success.

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