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A recent Forrester Research report has revealed the top 10 trends shaping the cloud industry this year. Not only are companies trying to keep up with the constantly evolving artificial intelligence (AI) advancements, a focus on digital sovereignty, subscription models, multi-cloud networking and security ecosystems are also highlighted in this list.
Here’s a look at Forrester’s findings.
AI dominance sparks competition
The combination of the AI technology boom and the Nvidia GPU chip shortage has brought on a battle among tech giants. Microsoft Azure, AWS and Google are aggressively introducing AI services like OpenAi and Copilot, while others are focusing on the hardware to build generative AI or large language models (LLMs).
Traditional players like Hewlett-Packard Enterprise and IBM are also making moves to harness the potential of multi-cloud AI through software like GreenLake or watsonx.
Embedded AI improves operations
AI integration is reshaping the way businesses operate. Enterprises are integrating AI into their core operations, enhancing incident management, performance monitoring and customer support. The deployment of AI-driven observability, chatbots, and automation is streamlining processes and improving employee efficiency.
WebAssembly changes application delivery
WebAssembly (Wasm) has evolved beyond its initial purpose of addressing web app compatibility issues. Its latest iteration, combined with WebAssembly Systems Interface (WASI), enables cross-platform delivery of complex applications without CPU architecture constraints.
Digital sovereignty enforcement grows
Growing concerns about sensitive data and the dominance of U.S. hyperscalers have elevated the importance of digital sovereignty. Stringent EU regulations like the Digital Operational Resilience Act and the Network and Information Security 2 Directive are working to hold enterprises and third parties responsible for granting digital sovereignty.
Furthermore, initiatives in countries such as Indonesia and Japan are reshaping the cloud landscape by investing in local cloud operations to support the independence of these hyperscalers. Enterprises must now navigate regulatory landscapes that impact where their cloud workloads and AI models can operate.
Shift to subscription models by IT hardware vendors
Due to the year-on-year revenue decline for IT hardware, traditional vendors are adapting to the cloud era by shifting to subscription-based models. Despite these companies reporting revenue increases through contracts and subscriptions, what constitutes those gains is not clear. It is also not clear if IT hardware buyers are switching to subscription models.
FinOps emerges as a crucial practice
Financial Operations (FinOps) is gaining prominence, prompting a wave of acquisitions in the cloud cost management sector:
NetApp acquired Spot and CloudCheckr
Anodot acquired Pileus
IBM acquired Turbonomic and Nordcloud
Apptio acquired Cloudwiry
By the end of 2023, Broadcom and IBM also hope to close VMware and Apptio acquisitions.
Multi-cloud networking converges with ZTE
Multi-cloud networking solutions are evolving, with a focus on Zero Trust Edge (ZTE). Networking and security are becoming increasingly intertwined, with vendors like Aviatrix and Prosimo, and solutions like AWS’s Lattice leading the charge.
Advancements in cloud security ecosystem
The cloud security ecosystem is advancing rapidly to meet the ever-growing needs of enterprises. Notable progress has been made in tooling, encryption, and Software as a Service (SaaS) security posture management. Enterprises are preparing for a post-quantum reality by integrating quantum-secure encryption algorithms into their TLS/SSL communications.
GSIs drive industry clouds
Global System Integrators (GSIs) are playing a pivotal role in the rise of industry-specific cloud solutions. Cloud vendors are heavily investing in vertical industry accelerators and clouds. GSIs are collaborating with both cloud providers and enterprises to create tailored industry capabilities, ensuring their relevance in the evolving market.
Managed service providers embrace transformative deals
Managed service providers are shifting toward advisory-led transformative deals, moving beyond basic operations. Larger entities, particularly GSIs, are taking the lead in multi-cloud managed services. Enterprises are seeking partners who can guide them through complex transformation journeys, relying on their expertise for strategy, build services, and training.
To access the full report, visit this link.
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