Four cloud computing trends CIOs should know

Cloud computing, the delivery of on-demand computing services over the internet, will continue to be critical for businesses in 2023, enabling remote work, data storage and access to advanced technologies. A report published on May 16, by market research firm Gartner noted that despite an ongoing economic crisis, cloud services have shown considerable resilience in recent months. 

Speaking at the Gartner IT Infrastructure, Operations & Cloud Strategies Conference in Sydney earlier this month, Paul Delory, vice president analyst at Gartner, said that in the current economic climate, IT teams, will be impacted by economic and geopolitical forces. “This won’t be a year to realize grand ambitions, but it marks a moment to refocus, retool and rethink your infrastructure. In every crisis lies opportunity, and in this case, the chance to make positive changes that may be long overdue,” he said. 

Here are some trends in cloud computing that CIOs should focus on in order to save costs, support new technologies and work more efficiently during a year of economic uncertainty. 

1. Cloud optimisation becomes vital 

Gartner noted that cloud usage is almost universal, but many deployments are ad hoc and poorly implemented. Tech leaders need to revisit these hasty and poorly architected cloud infrastructure to make it more efficient, resilient and cost-effective and hence learn from industry use cases For example, consumer goods group Henkel in April decided to replace its existing ERP applications with a new SAP S/4HANA software solution, as well as migrate all on-premise, in-memory data centers to the cloud. 

Michael Nilles, chief digital and information officer (CDIO) of Henkel, said in a blog post, the key focus is to “accelerate our growth through expanding our digital channels, innovating faster, shortening time to market, and building digital business models. Increasing productivity through simplification of our business processes is top of our agenda as well”. 

2. New infrastructures to meet new cloud demands   

Gartner researchers believe that tech teams will be compelled to meet demand with new types of infrastructure, particularly edge infrastructure for data-intensive use cases, non-x86 architectures for specialized workloads, serverless edge architectures, and 5G mobile service. 

Gartner estimates that 15% of on-premises production workloads will run in containers by 2026 – jumping from less than 5% in 2022. “Don’t revert to traditional methods or solutions just because they’ve worked well in the past,” warned Delory. “Challenging periods are times to innovate and find new solutions to meet business demands.” 

On adoption of new technology, Laura Petrone, Principal Analyst, Thematic Intelligence at GlobalData, said in a note shared with TechCircle that enterprises will increasingly look at wireless connectivity for branch offices in the more fluid hybrid work environment. 

“Private 5G, in particular, is positioned as a complement to in-building Wi-Fi networks that, along with edge computing, will enable real-time applications such as AR, VR, video analytics, and autonomous vehicles and robots,” said Petrone. 

3. Data centers will witness shrink and shift 

Researchers say data centers will shrink and migrate to platform-based colocation providers. According to Gartner research, 35% of data center infrastructure will be managed from a cloud-based control plane by 2027.  Gartner recommends that CIOs should focus on building cloud-native infrastructure within the data center. They can migrate workloads from owned facilities to co-location facilities or the edge; or embrace as-a-service models for cost and performance efficiency. 

The colocation data centre also referred to as ‘colo,’ is a large data centre facility that rents out the infrastructure, power, bandwidth, and security to companies that have their storage, servers or other network equipment, but do not have the resources to maintain their own data centre. In fact, a research report by real estate firm JLL predicted published in December 2021, said that India’s colocation data centre industry is expected to double its capacity from 499 megawatts (MW) in the first half of 2021 to 1008 MW by 2023-end. This would trigger a requirement of over five million square feet of real estate, it said.  

4. Companies must focus on cloud skills growth 

Finally, Gartner highlights that a lack of relevant skills is one of the biggest barriers to cloud initiatives, with many organizations stating they cannot hire outside talent to fill these skills gaps. IT organizations will not succeed unless they prioritize organic skills growth. 

Cloud skills shortages are inevitable as more businesses migrate to cloud-based infrastructure and services, resulting in a dearth of software engineers to help create and update products and services. A study by consulting firm AlphaBeta, and commissioned by AWS, published in March last year said that by 2025, 63% of workers in India feel they will require training in cloud-related skills to progress in their careers. Among these workers who feel that they require training in cloud-related skills, 45% feel that they need to learn how to make use of cloud-based tools in their work, 24% of workers also feel that they will require training in migrating on-premises facilities to the cloud, and 32% believe they need cloud architecture design skills. 

Business leaders must make operations skills growth their highest priority this year, said Gartner, encouraging IT professionals to take on new roles as site reliability engineers or subject matter expert consultants for developer teams and business units. Gartner also predicts 60% of data centers will have relevant automation and cloud skills by 2027, up from 30% in 2022.