1: Tightening belts will alter spending
“There’s been a perception amongst some companies, particularly fast-growing start-ups, that cloud cost optimisation measures should always come second to growth and innovation. But with cloud costs increasing by 35% year-on-year, finance leaders will ramp up their efforts to wrestle control of cloud spending from engineering teams.
“Over half of finance leaders surveyed in Vertice’s 2023 State of Cloud Spending Report blamed their inability to control cloud spend on a lack of transparency from tech leaders, with 44% saying they can’t get visibility of cloud costs. Next year CFOs will demand access to accurate forecasting, with shared visibility and automation tools to help them act on cost-saving initiatives.”
Eldar Tuvey, CEO and founder of Vertice
“In the current economic environment, cost is a key consideration driving cloud adoption strategies, however, other factors include availability, performance, data sovereignty, regulatory requirements, and labour costs. These factors will continue to play an important role in cloud strategy, while companies will also look to increase agility and avoid, or at the very least minimise, vendor lock-in and will look to implement a multi-cloud strategy.”
Johnny Carpenter, EMEA general manager, 11:11 Systems.
“According to Flexera’s state of the cloud report 2023, cost is the number one concern with cloud, knocking security off the top spot for the first time in 10 years. Organisations are spending significantly on cloud platforms and supportive security, yet the economic gains that they anticipated are struggling to materialise in many cases.
“Of course, the cloud won’t be scrapped. Yet it’s possible that we’ll see several organisations planning to move a proportion of their key assets back on prem in 2024 as they seek to ease concerns surrounding both cost and security.”
Carl Shallow, director of Compliance, Integrity360
“Digital modernisation companies will see their revenue streams undergo change in 2024 thanks to the Competition and Markets Authority’s (CMA) investigation into cloud providers and other SAS companies.
“The investigation is calling in to question the practices of larger spends, vendor lock-in, and the general monopoly that hyperscalers have over the cloud market. This will impact companies who offer services that help businesses migrate from one cloud to another — a practice that is often timely, expensive, and complex — but this isn’t a negative. If anything, a more open cloud market will be an opportunity for modernisation companies.
“With less cost on the customer side being taken up by cloud providers and costly migrations, more budget can go towards other innovations. Digital modernisation companies are also free to explore working with more cloud providers, resulting in a free-er market for all.”
Rajasekar Sukumar, Senior Vice President – Europe, Persistent
“With cloud now being seen as the digital backbone of many organizations, cloud solutions will continue to evolve. However, with this change will come increasing complexities – both in terms of the services available as well as the variety of operating models. It is therefore essential that businesses have the right tools to continually monitor and analyze cloud spend, in real-time, and with accuracy. Those who do will effectively pave the way towards growth.”
Dirk Martin, CEO, Serviceware
Dirk Martin, CEO, Serviceware
2: Security to ramp up
“Ransomware attacks, data breaches, and cybersecurity issues are a growing concern for organisations, and as such cloud computing security will continue to be a significant criterion for IT departments in 2024. To keep a step ahead of cybercriminals, companies will need to pay attention to the latest cyber threats and implement multiple layers of defence. In the event of a possible attack or breach, companies will also need to have data protection, disaster recovery, and cyber recovery plans in place to help them respond quickly and minimise downtime.”
Johnny Carpenter, EMEA general manager, 11:11 Systems.
“Where it was thought that there would be a logical and continuous shift away from on-prem to the cloud, this transition is now not as certain as it once was, with concerns having been growing among organisations for several reasons in recent times.
“First, there have been several high-profile cloud breaches. For example, in June of 2023, automaker Toyota revealed that roughly 260,000 customers’ data was exposed due to a misconfigured cloud environment. Further, the 2023 Thales Cloud Security Study revealed that 39% of businesses experienced a data breach in their cloud environment in the last year.”
Carl Shallow, director of Compliance, Integrity360
3: Expanding AI means increased cloud coverage
“Cloud services have become a mature market. The majority of businesses are now cloud-integrated. However, with the rise of AI, those not in the cloud will need to migrate to leverage AI capabilities. The mass market cloud offerings are now quite solid, but there’s opportunity for niche cloud providers to emerge, to meet specific industry needs like data sensitivity and intensive graphical processing demands.”
Tom Henson, MD, Emerge Digital
“AI advancements will lead to a 70% increase in cloudification in the CX industry in 2024, with companies realising the necessity of bringing their operations to the cloud to be able to fully utilise AI and succeed in the digital era. Organisations will also no longer be able to manage their complicated tech stack of patchwork solutions. In the age of AI, organisations can’t afford to operate like this any longer. They need their data to be easily accessible and sharable. Organisations will move to adopt a single, open cloud interaction platform allowing organisations to seamlessly connect third party resources with native capabilities on the platform.”
Barry Cooper, president, CX Division, NICE
Barry Cooper, president, CX Division, NICE
“The increasing dependence on AI has compelled cloud providers to increase their infrastructure offerings, meeting the computational and data-heavy requisites of AI-driven applications/services. Furthermore, as cloud platforms amplify their suite of AI-focused services, they’re in a way democratising the playing field, granting even those without AI backgrounds the ability to exploit these sophisticated tools. This expansion has intensified the synergies between AI adoption and the progression of the cloud computing domain.”
Kiran Minnasandram, VP and CTO, Wipro FullStride Cloud
4: Cloud to adapt to emerging sectors
“As we look to 2024 on the horizon, certain sectors within cloud computing are positioned to gain significant momentum:
Retail: This sector is expected to witness a surge in cloud adoption, with a specific emphasis on cloud-native computing. As consumer behaviours and preferences evolve, retailers will increasingly leverage cloud capabilities to deliver personalised, scalable, and efficient solutions.
Healthcare: The healthcare sector stands on the cusp of a technological boom. With an ever-growing emphasis on data-driven patient care and telehealth, cloud computing will be critical in facilitating seamless healthcare experiences.
Financial Services: While already a significant player in the cloud ecosystem, the financial services sector will further expand its footprint. Digital transactions, fintech solutions, hyper-personalisation beyond consumer banking, and data-centric financial planning will drive this transformation.
Entertainment and Media: With the boom in streaming services and digital content throughout the world, cloud computing will continue to play a central role in content delivery and storage.
However, these sectoral trends represent just a facet of the larger cloud transformation story. Regulatory requirements are expected to introduce heightened resiliency standards, particularly for regulated industries. This regulatory landscape will prompt enterprises to revisit and potentially recalibrate their existing cloud strategies.”
Kiran Minnasandram, VP and CTO, Wipro FullStride Cloud
“When working well, cloud environments become invisible, leaving applications on stage, front, and centre. This has largely been achieved with office apps, project management tools, CRM solutions and the like, but not quite yet mastered for specific industries. That will change next year.
“In 2024, we’ll see vertical specific clouds package software, PaaS, and IaaS layers to deliver industry-centric use cases focused on business outcomes, rather than the technology itself. Analysts have been expecting this for some time, and we are now seeing a great deal of interest in these projects.
“For instance, a transformation services provider for the transportation and defence industries, has already transitioned to a managed cloud infrastructure to optimize spending and reduce costs.”
Charlie Li, SEVP and global head of Cloud & Security Services, NTT DATA
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