Observing Cloud Computing Trends in 2024

In this recording, Omdia chief analyst Roy Illsley outlines the major cloud computing trends to observe in 2024.

Illsley emphasizes five crucial developments that are shaping the industry:

  1. The cloud is moving into the late majority stage of technology adoption.
  2. Digital sovereignty will receive more focus.
  3. Cloud cost optimization will progress.
  4. Industry clouds are increasing.
  5. The utilization of the edge will expand.

View the recording to learn how these trends will impact businesses and technology in the upcoming year.

The subsequent transcript has been lightly modified for brevity and clarity.

Transcript:

Roy Illsley: In this video, I’m going to discuss our trends to watch for 2024. This pertains to the cloud computing sector. I’ve selected five trends that you will start to notice in 2024 becoming more pertinent and evident in the cloud space.

#1. The cloud is entering the late majority stage of technology adoption.

The first one is just an observation that the cloud is now moving into the late majority stage of technology adoption. According to Omdia’s research, about 50% of workloads are operating in some form of cloud. That figure goes even higher if you are more specific on what you include in the cloud – so, software as a service (SaaS), platform as a service (PaaS), infrastructure as a service (IaaS), and hybrid cloud. The figure can be as high as 70%.

However, we’re seeing about 50% is where it’s been. It had a substantial increase during COVID-19, then it declined a bit, but it’s still on the rise.

The conventional on-premises is quite stable at about 19% to 20%. So, the older workloads aren’t moving anywhere. The older on-premises workloads are starting to migrate, and they’re largely transitioning into SaaS, but there is still migration to IaaS and PaaS.

#2. Digital sovereignty will receive more focus.

The second trend you’re going to see is the prominence of digital sovereignty. This year, we’ve seen AWS and Oracle both announce E.U. sovereign cloud offerings, as well as a variety of other offerings.

Now, a sovereign cloud isn’t a single thing. Sovereignty is not just, ‘The data’s in my country.’ That’s Level 1, according to the Omdia model. You can have Level 2, which is, ‘The data is in my country, and it’s going to be processed in my country.’ And then you can get to Level 3, which is the jurisdictional control: ‘The data in my country, is being processed in my country, and is being processed following the jurisdictional rules and regulations of my country, by citizens of my country.’ Then, Level 4 is the resiliency: ‘I’m doing that now, but what happens if I have a disaster? Have I got the same capability to do it somewhere else within the country?’ Then you start moving into the cloud as critical infrastructure, which is more government rather than enterprises.

That’s a topic we think is going to account for 10% to 15% potentially the cloud market. And it’s not just the E.U., but it is growing all over the world with a plethora of different data privacy regulations coming out in different countries. So, keep an eye out for that one.

As an aside, keep an eye out for AI sovereignty, as well. When AI starts to be developed in earnest, you may well find that countries legislate that some of the more sensitive work is only done within the country.

#3. Cloud cost optimization will evolve.

The third trend is cost optimization. Now, the entire benefit of cloud was depicted as you’re not sinking capital expense, you’re not doing the heavy lifting, and somebody else is doing that for you. But we’ve now reached the stage where organizations are maturing and they’re contemplating using the cloud and they’re exploring ways of how they can optimize the cloud more effectively and more efficiently. Depending on your specific drivers, that is either going to be on a risk base, a cost base, or an environmental base.

#4. Industry clouds are increasing.

The fourth trend is the rise of what we call vertical clouds or industry clouds. Now, these aren’t specific, dedicated clouds, apart from the U.S. government and a couple of other governments. These are more an ecosystem of partners, where solutions and partners can deliver capabilities to a vertical. So, you can find like-minded people and deliver things within the rules and regulations and using the language of your industry. Healthcare and telecom are classic examples.

#5. The utilization of the edge will expand.

Lastly, the edge. Edge hasn’t disappeared. It’s still there. And I think with Gen AI, you’re going to see inferencing at the edge be more of a real thing. But the edge in its own use case is continuing to grow as the use cases become more prevalent and demonstrate greater value.

The challenge for the cloud is how they can incorporate the edge and how they can stretch to the edge. So, what we’re seeing now is it’s not an ‘edge to core’ type of discussion. It’s a ‘core to edge’ type of discussion.

So, those are just a sample of my 2024 cloud trends to watch. You can get more on the Omdia website. You can always find me on LinkedIn. Thank you for listening. Have a good day.

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