It is no secret that companies are shifting large infrastructures to the cloud. With more and more companies undergoing the digital transformation of their services, we have been witnessing cloud adoption as a software growth and maintenance strategy for a few years now.
The nature of this movement has changed over time, so it is important to ask yourself what cloud adoption looks like today. Only by bringing yourself up to speed with the key trends can you streamline your cloud migration strategy, so let us fill you in.
How much are companies spending on cloud costs?
In 2021, companies spent $410.9 billion on public cloud services. Gartner expects this number to rise by 20.4% in 2022 to reach $494.7 billion. Spending on Cloud Application Services (SaaS) continues to reign by a long margin, as monolithic applications are largely deemed relics of the past.
Furthermore, although IaaS continues to remain popular and will likely experience the most growth in terms of IT spending, PaaS is on the radar of companies prioritizing cloud-native applications. The latter also tends to be heavier on the pockets, contributing to increasing expenditure on cloud services. DaaS is also projected to see considerable growth, owing to the introduction and persistence of hybrid and remote workplace environments.
For companies migrating to the cloud now, the process is no longer a simple transition from one set of servers to another. The cloud ecosystem is brimming with innovation as service providers, having figured out the basics, are now shifting focus to improving existing facilities and adding new ones. With a plethora of opportunities at their disposal, companies can sometimes get ahead of themselves. Overspending, then, is commonplace in the cloud marketplace. A lack of clarity vis-à-vis their business and product needs, coupled with submission to shiny object syndrome, drive companies to spend on non-essential services, especially at the time of migration. It is easy to fall into this trap. Most companies only realize it once they have made the commitment, and try to undo the damage by reversing the process.
Is on-prem a thing of the past?
Not yet. There is no doubt about the cloud’s potential and its utility for companies. However, clients are also becoming more cognizant of their cloud-related expenditure, especially when it exceeds their budget. The costs add up, and it is difficult to ignore them. Although many public cloud providers offer pay-as-you-go pricing services, companies often purchase more services than they use. When companies are unclear about their objectives, such expenditure is more extravagant than the utility. This awareness with regards to their cloud spending has encouraged companies to take stock of their needs and expenses, and when they do not add up, to consider partly shifting back to on-prem.
Gone are the days of mindlessly unloading entire infrastructures into the cloud. It is often expensive, for instance, to pull out data from the cloud. Increasingly, companies only migrate data to the cloud for safety purposes but are well aware of the costs that will accompany any request to move it off the cloud platform. On-premises continues to prove useful in this case.
For many, concerns of security and control also motivate them to keep data on-premises. The public cloud has its benefits, but private storage has its place, too, especially for some components of your software. All in all, on-premises is here to stay, as companies continue to acknowledge and appreciate its value despite their reliance on public cloud environments.
Why are companies choosing to migrate to the cloud in 2022?
As the public cloud matures, its capabilities, too, expand. It also guarantees significant advantages in some use cases. It is worth it, then, to put your money into the cloud infrastructure for those specific reasons. Cloud technologies have the potential to deliver faster and better performing experiences to end-users. Emerging technological innovations in the cloud are giving rise to new services that public cloud vendors can capitalize on. Various use cases are surfacing as companies understand the cloud better and see its potential. They are pushing the boundaries on how they can use the cloud, and cloud service providers are keeping track of the changing nature of the demand.
For example, cloud-based gaming platforms like Amazon Luna are on track to see significant growth. The cloud is also of great value to artificial intelligence and machine learning efforts, and these are often intertwined. Going forward, cloud computing promises to be indispensable for AI algorithms.
The phenomenon termed “the Great Resignation” is also driving some companies towards the cloud. Although some knowledge is needed when moving to the cloud, cloud services offer automation and require, in the long-term, lesser supervision from employees.
The COVID-19 pandemic has been another catalyst in cloud adoption by making resiliency a priority for many businesses. They have a higher chance of staying afloat in the case of any other emergencies if their workloads are moved to the cloud. Although it comes at a cost, migrating to the cloud’s automation allows companies to outsource some time-consuming responsibilities and focus efforts elsewhere. While this was a significant driver in 2020 and 2021, this logic continues to be relevant as uncertainty remains a crucial force in business operations.
Cloud computing is also helping companies make strides in terms of improving performance and efficiency, as well as scalability. In addition to AI, the cloud is expected to be instrumental in the development of more powerful augmented and virtual reality apps.
Which approaches are defining cloud migration today?
The possibility of these approaches or facilities also serves as motivation for companies to migrate to the cloud.
Containerization is the process of compiling and storing a service, along with its dependencies, in a container. This allows for easier and cheaper shipping of the service. Owing to their small size, multiple containerized applications can run on a server. According to CNCF’s 2021 Annual Survey, containerization is now a mainstream practice. Kubernetes, for instance, is a heavyweight in this domain, with 96% of companies employing or evaluating it.
Hackers are showing no signs of stopping the relentless cyberattacks. In Q1 of 2022 alone, 90% of data breaches had their origins in cyberattacks. Add to the mix the increased complexity of IT infrastructures and disaster recovery. Security, then, is being acknowledged as a matter of great importance. Companies are mindful of such concerns in their cloud adoption strategies, including their choice of cloud service providers. We are also witnessing a shift in businesses’ approach to security: incorporating it as a continuous practice from the beginning as opposed to relegating it to the back-burner until the last moment. Finally, frameworks like secure access service edge (SASE) and customized cloud disaster recovery strategies are important elements of cloud adoption.
In today’s climate, sustainability is built into most business models. They are eager to adopt practices and models that consume less, reducing their carbon footprint. This impetus is also emerging from business partners and investors who are beginning to employ sustainability as a key factor when deciding which companies to work with. When the migration is planned carefully, chances are that you will retire certain services in your infrastructure and make wise decisions about what to migrate and what to retain. By optimizing your migration strategy, you are likely to only run and pay for the services you need, ensuring that your energy expenditure is under control.
The centralization of cloud computing is a growing concern, giving rise to alternatives such as edge computing. Edge computing, a $176 billion market in 2022, emphasizes the importance of building data centers locally, i.e., closer to where they will be needed for storage and computational purposes. It solves for any issues to do with bandwidth and latency. Improved security is another added benefit of this practice. Edge computing has a bright future as it attempts to make up for some of the pitfalls of using centralized servers in the cloud.
Cloud-native applications are built on the cloud itself, not those that have been rearchitected to ensure compatibility with cloud services. They are easier to work with on the cloud, as they are designed for the cloud. When compatibility is not a concern, they can also go one step further and leverage various benefits offered by cloud services. As a result, scalability, flexibility, and resilience are built into these cloud applications. With the increased adoption of the cloud, companies are increasingly in favor of cloud-native applications. This subsequently informs their migration strategy as they decide which services to retire, rearchitect or build anew once the actual migration is complete.
How does the hybrid cloud fare in 2022?
With the knowledge that the public cloud both has significant advantages and is imperfect, hybrid computing is on the rise. It leverages both the public and the private cloud to deliver maximum benefit to the companies with little to no compromise. The public cloud offers scalability, flexibility, and speed, while the private cloud takes charge of cost-effectiveness, security, and compliance with regulations. While more sensitive data can rest on the private cloud, data that will be more frequently accessed can be stored in public servers like AWS and Google Cloud. Companies’ key decision-makers do not need to relinquish control to cloud vendors. Investing in a hybrid cloud strategy from the point of migration itself can go a long way in giving companies access to the best of both worlds.
Multi-cloud environments are also increasingly sought after. By working across cloud services, companies can pick and choose which services are most compatible with which of their application’s components. These can include services offered by different cloud providers. Similar to a hybrid cloud environment, a multi-cloud strategy where companies distribute workloads across clouds puts some control into the company’s hands, as well as ensures additional flexibility.
Which cloud providers are seeing growth, and what are they doing differently?
Serverless Cloud Environments
Cloud vendors like Amazon, Microsoft, and IBM are pushing serverless cloud services. Although these continue to rely on servers, companies are not expected to rent servers or pay fixed charges. Instead, the storage and bandwidth infrastructure scales with the software, as and when it requires it. Companies do not need to concern themselves with technicalities and can focus on innovation and improving their existing applications. Serverless cloud solutions are also beneficial for smaller companies that need not invest large amounts of capital to witness growth. An added advantage is the provision of safe testing environments that encourage developers to tinker with cloud services and develop solutions for potential failures or outages.
To meet the soaring demand for cloud services, partnerships among cloud providers are also on the rise. Significant workloads put pressure on the vendors’ resources, which has led to them seeking solutions to increase their capabilities and capacities. By partnering with other service providers, major providers can offer more services and boost their reputation. By leveraging the resources and reputations of one another, these service providers can strengthen their competitive edge in the cloud market.
Cloud adoption is not a practice limited to software companies. Businesses across industries like healthcare and finance are migrating their infrastructures to the cloud. This variety in demand has encouraged providers to customize their services such that they may meet specific requirements of these companies. Often, these include compliance with regulatory needs in these sectors.
Moving your Workload to the Cloud
The cloud is only getting bigger and better. Equipped with the knowledge of cloud trends informing cloud migration in 2022, you are positioned to develop a well-curated transition strategy. At Cortex, we develop tools to help your teams stay up-to-date with the internal workings of your company. Our service catalog gives you and your teams a bird’s-eye view of your existing services. This information is invaluable when you are deciding the fate of each of these services as you prepare to migrate to the cloud. Some may be better suited to a private cloud or an on-premises environment, for instance, while others may need to be retired so that improved cloud-native services can take their place. Identifying your requirements at this stage will go a long way in leveraging the cloud to your advantage.