The 2023 cloud computing landscape overview
Everybody knows that cloud computing is here to stay, but the specifics of its spread and evolution are a little bit muddier. While Amazon, Google, and Microsoft are unquestionable leaders in public cloud solutions, the private cloud market is still much more competitive. Will the increasing awareness of cybersecurity issues and diverting more corporate resources into that field produce private cloud market leaders similar to the public cloud big three?
Although reports are optimistic and predict cloud spending to rise further in the coming years, the state of the global economy will pressure executives to seek savings. Going back on-premise is not a viable option for most, so companies will try to increase efficiency with optimization efforts. Are cloud automation solutions mature enough to satisfy these companies’ needs?
Assuming the rise in demand for cloud automation, private and hybrid cloud solutions, and high-performance analytical databases, is there any room left for new and unfamiliar cloud computing trends to develop and snatch the investors’ collective imagination this year? Who will invest in the cloud in 2023, and who will wait for safer economic conditions? Should your company migrate to the cloud in 2023?
Answering these questions is crucial to paint a clear and authentic view of the 2023 cloud computing industry landscape. Read further to catch up on relevant statistics and reports.
The future of cloud computing - five predictions for 2023
1. Private, hybrid, and multicloud solutions will thrive
According to research by Technavio, the private cloud services market will grow at a CAGR (compound annual growth rate) of 26.71% between 2022 and 2027 and increase by USD 276.36 billion during this period. The report creators identified the increasing acceptance of private cloud solutions in banking, financial services, and insurance (BFSI) as the primary trend in this market, citing digital transformation, data security, and compliance possibilities as major factors. Technavio researchers acknowledge that most established financial institutions have already invested in cloud infrastructure but expect further growth in private cloud demand in this sector.
That is not to say that established companies shy away from public clouds. Industry leaders understand the pros and cons of both models and usually decide to utilize them together as multicloud or hybrid cloud. What’s the difference? In the multicloud model, there are at least two different cloud environments of the same type but provided by different vendors to lessen reliance on a single cloud provider and improve reliability. These environments work independently from each other. A hybrid cloud utilizes at least two cloud environments that are integrated with each other (share data and resources) to improve workload portability.
Improved data security and better performance drive the demand growth of private, multicloud, and hybrid cloud solutions. These benefits come with a price, though: managing complex cloud environments demand more IT expertise than the usage of any single mainstream public cloud provider. Nonetheless, this trade-off is worthwhile for many businesses, especially when they already work with third-party IT consultancies that can quickly find and employ cloud engineering experts for them or provide specialized consultants that share their skills as a service.
2. Public cloud spending will reach nearly $600 billion
As seen above, cloud migration demand is not going to decrease anytime soon. And if Gartner is correct, it will rather grow further. Their report shows that worldwide public cloud spending will reach USD 591.8 billion. It’s predicted to grow by 20.7% in 2023, which is higher than the 18.8% growth in 2022. While Software-as-a-service (SaaS) solutions continue to acquire the biggest share of all public cloud spending, forecasted to reach USD 195,208 million, the highest spending growth of 29.8% belongs to Infrastructure-as-a-service (IaaS), which may reach USD 150,254 million in 2023.
Gartner’s prediction comes with a couple of sidenotes. First of all, organizations will struggle with finding highly skilled experts needed to develop SaaS solutions while protecting their margins. This challenge can be managed with the support of technology consultancy firms that can leverage their global presence to access the talent pools of cloud computing experts around the world.
Secondly, businesses can only spend within their budgets, so there is a possibility of a slight decrease in cloud spending if all IT spending is cut. Nonetheless, the cloud is forecasted to remain the largest chunk of IT budgets this year. And it’s easy to see why. The speed of cloud innovation, better risk management, and cost optimization possibilities are simply worth it.
3. Cloud cost optimization will be more important than before
Counterintuitively, the overall state of the economy is a legitimate reason to increase cloud spending, not to cut it. There are many financial advantages cloud adoption brings to companies. Public cloud solutions don’t require huge upfront investments, as opposed to setting up any kind of on-premise infrastructure. You pay only for resources you really utilize. Cloud computing is relatively safe, as both public and private cloud providers understand how important cybersecurity measures are for their image.
Unfortunately, many first-time cloud users don’t necessarily know how to optimally set up their chosen solution, so they end up with much higher bills than expected. Tools designed to improve control over cloud spending and otherwise optimize cloud costs are bound to gain even more traction, especially those integrated with the big three public cloud providers and sold via their respective marketplaces. Many of these solutions rely heavily on automation, which brings us to another prognosis.
4. Cloud automation will spread and evolve
To anyone who understands what automation is, its usefulness regarding cloud technologies shouldn’t come as a surprise. Automation tools can streamline complex processes across multiple cloud environments and decrease human-made errors, resulting in reduced costs and increased efficiency. Utilizing big data analytics and data orchestration would be virtually impossible without automation. According to Verified Market Research, the global cloud automation market will reach USD 414.85 Billion by 2030, growing at an impressive CAGR of 26.39% from 2022 to 2030.
Companies will not only buy existing solutions but also involve automation in their own platforms and software more often. To combat the lack of affordable talent, businesses may be more prone to expand their training budgets or work with external agencies that provide Staff Augmentation Services to strengthen their teams with needed skills quickly (and/or temporarily).
Maxima Consulting began investing in cloud automation solutions years ago. Together with our partner Cloud Control, we provide the complete platform engineering solution, Cloud Orbit, that accelerates migration to private, public, and hybrid clouds with convenient pre-defined stacks, enables SRE-as-a-service and equips software engineering teams with cloud environments for greenfield development.
5. Industry leaders won’t stop investing in cloud solutions
Although enterprises around the globe look for ways to reduce the impact of record inflation on their businesses by cutting costs, industry leaders may see strategic cloud investments as an opportunity to gain an additional advantage over the challengers. This puts smaller companies in a rather tough spot since slowing down the digital transformation now may hinder their capability to meaningfully compete in the market later. That being said, businesses who already work with cloud environments could potentially freeze their cloud spending without much harm to the company, provided they’re serious in their optimization efforts.
Pros and cons of migration to the cloud in 2023
Should your business migrate to the cloud in 2023?
The short answer is: yes! In almost all cases, if your company didn’t do it already, you should embrace cloud solutions this year. With today’s public cloud availability and security measures already in place, coupled with optimization and automation tools, cloud migration will very likely help your business reduce IT infrastructure costs in the long run. You don’t want to lag behind, relying on legacy systems that little to no experts know or care about anymore. The good news is, you don’t have to do this alone.
Maxima Consulting supports businesses of all sizes in their digital transformation journeys from A to Z. Our cloud solutions experts will analyze your existing resources and needs, help you formulate a sound strategy, and support you in implementing those plans. Schedule a complimentary meeting today.
