Chaos, cost control and core compliance
With so many moving parts it’s difficult to predict how the cloud industry will evolve in 2023. Everyone agrees there will still be increased demand for cloud as the foundation for transformation and associated demand for experienced cloud engineers. Bt will the rest of the cloud landscape remain intact or are there clouds gathering on the horizon? With a wealth of cloud knowledge and experience, the Cloudscaler team share their top ten predictions for cloud as well as advice for consumers on how to ensure 2023 is the year cloud delivers for their business.
- Cloud chaos
Few companies have implemented cloud well and this is unlikely to change in 2023. Most have created multiple (often competing) cloud platforms without enforcing cross-platform technology choices and standards. This has exposed significant risk and resulted in higher spend than is necessary. The result is cloud chaos, an unclear operating model, technology sprawl and duplication of effort as cloud teams battle to solve the same problems with different solutions.
- Cost scrutiny
The cost-of-living crisis and recession mean organisations are looking closely at budgets and spend, and many consider their cloud costs to be out of control. There will be an increased use of cloud cost optimisation techniques, which can see year-on-year spend decrease by more than 40%. There will also be more scrutiny of requests for additional cloud spend. Transformation pace is likely to be impacted as budget won’t be released without a strong business case and demonstrable ROI.
- Tech debt payback
Those who started their cloud journey 5-10 years ago but have not invested in ongoing maintenance and modernisation will feel the pain of an outdated cloud platform and high levels of technical debt. They will be exposed to increased risk, see slower delivery speeds and higher run costs. Those organisations will need to divert resources to upgrade and perform basic maintenance on their cloud infrastructure, as opposed to focusing on delivery of new features.
- Spotlight on sustainability
Sustainability and ESG will remain a key focus in 2023. Many cloud consumers will need to adopt best practices such as switching off environments overnight and at weekends to make tangible progress toward their sustainability commitments. They will expect their cloud service providers to not only progress changes to further improve sustainability, but to also provide information on how cloud is helping reduce their carbon footprint.
- A tougher market for hyperscalers
Market conditions will drive cloud hyperscalers to review internal costs and focus on customer growth, whilst at the same time protecting their market share. They will need to work hard to help their clients embed cloud as the de facto infrastructure to ensure adoption rates don’t drop.
- Cloud culture is a priority
There have been widely publicised headcount reductions by large organisations, particularly in the tech and financial sectors. This has created an increase in cloud specialists looking for roles and a stabilisation of salaries. Many engineers changed jobs as Covid restrictions eased and those who aren’t content will start looking to move. Employers will need to work to both retain and recruit – culture will be as important as salary. Most cloud engineers want to be part of a dynamic organisation that is serious about cloud transformation. Hyperscalers who have reduced headcount and introduced a recruitment freeze will need to leverage partners to meet demand.
- Hands-on experience a pre-requisite for progress
Internal cloud training programmes might help engineers reach a basic level of cloud competence, but there is no substitute for hands-on learning. Training courses tend to be focused on technical commands rather than cloud best practice. Engineers gain technical skills but continue applying what are now regarded as old school practices that do not enable organisations to realise the true benefits of cloud. Only those with hands-on experience will be able to drive the improvements in governance and process required to see cloud deliver real value.
- C-suite frustration
There is growing frustration amongst the C-suite, who are faced with a barrage of cloud related spend requests but no clear strategy and little demonstrable progress – if anything, delivery pace is slower. There will be a change in approach for many organisations in terms of cloud adoption, as they take time to step back and reflect on progress to date. Cloud teams will need to change how they work to ensure they deliver tangible business benefits.
- Increased regulation
Moving applications to the cloud in an uncontrolled manner has introduced significant risks for organisations, effectively opening the door to bad actors. Reducing the risk of cyber-attacks and loss of data will see an increased pressure for additional regulation. This alone won’t solve the problem. Companies need a robust cloud control framework that mitigates risks and forces common controls and standards on delivery teams.
- Fewer tech advances
As cloud evolution slows, we are less likely to see major new advances in cloud technology. Organisations will therefore be less distracted with the need to adopt new cloud vendor services, providing an opportunity to focus on ensuring cloud delivers ROI as well as removing technical debt.
A year of collaboration and opportunity
Where does this leave the cloud industry in 2023? With an increased focus on cost control and fewer technology changes, this year will feel very different for both suppliers and cloud consumers. They will have to work together to ensure cloud delivers real benefit. But it’s not all bad news. Businesses will be presented with the perfect opportunity to look at their cloud strategy and operating model with a critical eye to ensure it delivers greater pace and progress. This year will see a coming of age for cloud, a level of maturity not previously seen, a significant year for all those within the industry.