The 6 most important Cloud trends in 2023
One of the most obvious cloud trends in 2023 is around adoption becoming indispensable. The economic climate we are going through is forcing more and more companies to look for solutions to be able to overcome the crisis of equipment stocks and the IT specialist’s shortage, to meet the increasing availability and security requirements, and also to cope with the high energy price increases. All these problems can be solved – totally or partially – by migrating to the cloud.
Companies are already aware, which is reflected in the increase in cloud services spending, which comprise a third (32.9%) of all IT spending. In terms of servers and storage, the percentage is already at 43% and is expected to exceed 50% in the following two years, according to IDC data published in September.
However, the Cloud is a very complex technological ecosystem that is constantly expanding, both in terms of adoption and service offerings. To give you a real perspective on evolution, we have extracted from analysts’ estimates a summary of the most important cloud trends in 2023.
Top Cloud trends in 2023
- IaaS and PaaS will be the drivers of cloud market growth
According to Gartner analysts, public cloud spending will grow by 20.7% next year, to nearly 592 billion globally – which means 100 billion USD more than during 2022.
The most significant increase will be in the infrastructure-as-a-service (IaaS) area. The 29.8% jump is driven mainly by the IT infrastructure modernization projects initiated by organizations to minimize risks and optimize costs through CAPEX savings.
Platform-as-a-Service (PaaS) purchases will also be above the 20% average, registering an annual growth rate of 23.2%, while Software-as-a-Service offerings will be below, with a CAGR of 16.8% in 2023. However, the two sectors are in an interdependent relationship – the development of SaaS applications requires specialists with experience and skills, which, in the global context of qualified IT staff shortage implies higher wages costs. The PaaS offering can compensate for this by efficiently and automatically generating code for as-a-Service delivered applications.
- Multi-cloud will become a standard approach
Another factor that boosts public cloud spending is the expansion of multi-cloud adoption. According to market players’ estimates, the main growth will be registered among small companies – whose percentage is expected to reach 79% in 2023 (versus 60% in 2021) – and medium companies (84% compared to 76%), while among large companies it will be 94%. With an average of over 85%, it is apprehensible why multi-cloud occupies a leading position in the 2023 upcoming cloud trends.
The transition from a single provider to multi-cloud is facilitated by offering diversification, but also by using Containerized Applications, which can be quickly ported from on-premises infrastructures too, as well as across different cloud platforms, thus avoiding dependence on proprietary technologies and systems.
- Increased investment in cloud security services
Migrating to the cloud provides substantial benefits but can also expose organizations to a new category of security risks, to which they may be unaccustomed. This is an important change, as most security spending is still directed to on-premises infrastructures. On the other hand, however, cloud environments have an increased level of complexity, integrating a wide range of technologies and processes, and cannot be protected with a universally valid solution.
For this reason, security services specifically designed to reduce risks and improve the compliance of cloud environments are in high demand. The Cloud Security Services market recorded a growth rate of approximately 26% between 2017-2022 and will reach a value of over USD 41.6 billion next year.
- AI adoption will boost the use of cloud services
The use of artificial intelligence technologies is becoming increasingly popular in the enterprise environment. According to the Global AI Adoption Index 2022, 35% of global companies are already using AI solutions, while 42% are testing them.
Data collection, data processing and analysis in large volumes, machine learning training algorithms, etc., however, require vast resources of processing power and storage. Their use as-a-Service is more cost-effective, facilitates the rapid development of applications and automation, and increases the efficiency of DevOps teams. The cloud is a confirmed choice – according to a McKinsey study, last year 64% of companies using AI technologies were running their workloads from the public cloud or hybrid environments.
- FinOps will become a priority
The expansion of multi-cloud adoption complicates the lives of companies, already struggling with monitoring and controlling expenses, the usual models being complex and with low levels of predictability. To overcome these challenges, more and more companies are adopting the FinOps methodology to achieve visibility and ensure that resources are allocated and used optimally. According to IDC, next year, 80% of cloud companies will analyze and test this new approach, even if they won’t use this specific terminology.
While FinOps doesn’t seem to be a “new entry”, keeping expenses under control is a universally valid priority, which justifies its inclusion in the top cloud trends in the 2023 list.
- Local and dedicated vertical service providers will be in high demand
The concept of “Cloud sovereignty” is not new, but it has come back to the fore along with the changes in the geopolitical context. The effects are seen – a recent study shows that 71% of companies plan to take it into account when choosing suppliers to prevent compliance issues, and 67% – to gain control and transparency over what happens to their data in the cloud.
On the other hand, industry-specialized cloud service providers have been increasingly sought after. The potential of the global industry Cloud Services market is estimated at around 640 billion USD, and Gartner predicts that by 2027 more than 50% of companies will adopt such services.
Romania and the need to adopt Cloud solutions
Romania has an imperative need for cloud computing, the only technology that delivers the desired benefits to companies and institutions without challenging investment budgets. While in the EU states, according to Eurostat statistics, last year 41% of companies used the cloud, only 14% use it in Romania. If we compare to the leading countries– Sweden and Finland, where the usage rate is at 75% – the gap is even greater which also explains, to a certain extent, the differences in productivity between Romanian and Scandinavian companies.
The cloud is just one component of the digital economy; however, it can support the most diverse business processes, from resource management to e-commerce. Expanding adoption at a national level would allow a growing number of local companies to digitize their way of working using next-generation solutions. The developments in mature Western markets clearly show that the use of technology, and especially the cloud, has a direct effect on increasing labor productivity and, implicitly, on profitability.
- IDC Continued Growth Forecast for Cloud Investments in Europe Through 2026, With an Expected Peak in 2022 https://www.idc.com/getdoc.jsp?containerId=prEUR249673622
- Gartner Forecasts Worldwide Public Cloud End-User Spending to Reach Nearly $600 Billion in 2023 https://www.gartner.com/en/newsroom/press-releases/2022-10-31-gartner-forecasts-worldwide-public-cloud-end-user-spending-to-reach-nearly-600-billion-in-2023
- Do you actually need a multi-cloud strategy? https://kruschecompany.com/multi-cloud-strategy/
- IBM Global AI Adoption Index 2022 https://www.ibm.com/downloads/cas/GVAGA3JP
- McKinsey Global Survey: The state of AI in 2021 https://www.mckinsey.com/capabilities/quantumblack/our-insights/global-survey-the-state-of-ai-in-2021
- Persistence Market Research: Global Market Study on Public Cloud Management and Security Services https://www.persistencemarketresearch.com/market-research/public-cloud-management-and-security-services-market.asp
- IDC FutureScape: Worldwide Cloud 2022 Predictions https://www.idc.com/research/viewtoc.jsp?containerId=US47241821
- Eurostat: Cloud computing – statistics on the use by enterprises https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Cloud_computing_-_statistics_on_the_use_by_enterprises