Where is the Cloud flying to in 2022?

In the last couple of years, cloud computing has seen explosive growth and it has become a key enabler for many organizations for a majority of their digital transformation scenarios. Cloud computing has its own set of opportunities, problems, and challenges. In this post, I review where Cloud computing stands in 2022 and some of the major trends for it.

Accelerated Cloud adoption

The last two years of the pandemic saw an increase in Cloud adoption as organizations went into lockdown and had to enable remote-work scenarios for their employees.

Without cloud computing in place and accessible to companies of all sizes, this massive remote work paradigm would not have been possible.?Key cloud services such as Zoom Video conferencing, Microsoft Teams, and Google Meet?et al.?have saved us all from the huge layoffs that may otherwise have happened in multiple industries. While some of the industries including leisure & hospitality, wholesale & retail, transportation, manufacturing, construction, and education & health were really hit hard, other industries and specifically the IT sector was saved the wrath of massive lay-offs and furloughs. We saw huge growth in Software as a Service (SaaS) services. Cloud software services that have contributed to SaaS spend growth include email and video conferencing along with CRM (Customer Relationship Management) and ERP (Enterprise Resource Planning) applications required by the organizations to run their operations during the pandemic remote work and lockdown scenarios.

Cloud adoption is also being driven by SMB and Startup organizations who are now using the Cloud as the primary option to set up their infrastructure and for their compute needs. Large enterprises, on the other hand, have gained confidence in the basic use of Cloud computing scenarios and are exploring advanced Cloud scenarios along with moving their business-critical workloads to the public cloud.

Cloud Spend waste continues

Cloud spending continues to be a key challenge this year too when it comes to the financial management of Cloud usage. Misconfiguration, forgetting to de-provision services, and lack of organization-wide governance framework around cloud utilization for both experimentation and production has resulted in cloud spend waste. Flexera State of the Cloud 2022 report estimated?mid 32% of the cloud spend as cloud waste. We will continue to see cloud waste metric in double digits in 2022 and beyond until the organizations get to the point where they have a solid governance framework in place across all the units of the organization. According to Flexera’s 2022 report, cloud costs optimization is a key priority now for enterprise IT and cloud Center of Excellence (CoE) teams. Cloud costs optimization and governance are staying as the top two challenges for all companies regardless of what cloud maturity phase of adoption they are in (beginning, intermediate or advanced). A mix of a solid governance framework, best practices, and several available tools will help control and optimize cloud adoption and utilization costs. Various tools and systems are available from top cloud providers and other vendors to help you along the way in managing cloud costs effectively.

32% of cloud costs are wasted as part of the total cloud spend according to the Flexera 2020 State of the Cloud report

Cloud expertise shortage woes worsen and security still stays a big concern

With the current tech unemployment rate of 2%, it is almost impossible for companies to find good talent to fill all the Cloud and other emerging technologies jobs. This extremely low unemployment rate in the US is making it very hard to get good cloud talent. Organizations expanding their private cloud to multi-cloud and increased hybrid cloud configuration have led to the challenges of cloud expertise shortage. In the long run, reskilling and retraining the?current IT resources will solve this issue. In the short run, organizations may have to bring in outside cloud consultants, for their particular industry vertical. Lack of expertise in cloud computing is a challenge for all companies who may be in any stage of cloud usage and adoption. Multicloud and hybrid cloud configurations create complex environments where external deeper cloud expertise will be required while the current IT staff are retrained. As organizations mature in cloud usage and set up multi-cloud deployment models, staff training and certification in multiple public cloud environments will be required. IDC’s?Worldwide CIO Agenda 2019 Predictions?report predicted that 30% of high-demand roles for emerging technologies will remain unfilled through 2022.?

?Cloud Security

Security has and will stay one of the top concerns for the cloud. When considering moving to the cloud, organizations should understand the fundamental differences between their on-premises data center and private cloud security vs. how the security looks like when they end up choosing one of the public cloud providers. Moving into the cloud means that the organizations are now dependent on the cloud provider for making sure that their data centers are secure and have proper identity management, physical security, personnel security, and privacy measures in place.

Organizations still own the responsibility of making sure that their cloud resources including applications, data, databases, etc. are properly configured for security. The onus of protecting your cloud assets is not only on the cloud provider but also on the organization, thus making it a shared responsibility between you and the provider.

As organizations initially adopt the cloud, the security scenarios may be simple. But as they move into the future and large enterprises start implementing complex hybrid scenarios for splitting up their resources between their on-premises infrastructure and the cloud, security scenarios are also going to get complex. It is critical?that the current security best practices and policies which may already be in place for on-premises data centers and private cloud are tweaked?and made suitable to be applied to the assets in the public, hybrid, or the multi-cloud.

“Some organization with high cloud adoption and with efficient security deployment has reported very high reduction in the number of incidents due to autonomous remediation in near real-time. The autonomous user behavior analytics can also help in the prevention or detection of malicious insider attacks as well as outside attacks.?With these innovations whether self-securing clouds could replace security professionals? I do not think so, but this will certainly transform the security professional in a huge way, and they will have to change.”

Ratan Jyoti, CISO - Ujjivan Small Finance Bank

Multi-Cloud and Hybrid Computing becoming a norm for the large enterprises

Many mid-sized businesses and large enterprises are going to continue to adopt the public cloud thus leading them to build a hybrid cloud that incorporates their on-premises data centers, private cloud, and now the public cloud. According to Flexera’s report around 80% of the organizations surveyed are in this scenario. Large Enterprises have already gone through the initial phases of Cloud adoption of experimentation, basic usage, and migration of non-critical workloads and now are in the advanced phase of moving and maintaining business-critical workloads. Many organizations are also exploring multiple public clouds, driven by their redundancy, costs, and availability of services globally requirements. This has led to a whopping 89% of multi-cloud deployments according to the Flexera report. ??????

?One of the primary reasons for hybrid cloud adoption for large enterprises is cost optimization. These organizations have huge investments in their on-premises data centers but still want to use the flexible operational expenditure (OpEx)-based, pay as you use, public clouds to transform their business without any further capital expenditure (CapEx) investment in their on-premises data centers. This has led to many of these organizations starting to utilize one or more public clouds along with their current on-premises data centers and private clouds. Setting up a multi-cloud with on-premises infrastructure, private cloud, and multiple public clouds has contributed to the increased complexity. Such complex multi-cloud infrastructure is hard to monitor, manage, and maintain. Shortage of Cloud expertise and talent has further exasperated the situation for these organizations, finding it harder to manage the multi-cloud and the hybrid cloud environments.

Native cloud development on the rise

Containers and serverless are two key DevOps technologies that have seen a huge growth in the last couple of years. Cloud developers are swarming around these two technology offerings from the cloud providers for building and deploying native cloud apps. Serverless computing provides compute on-demand and removes the burden of server configuration and management away from the developers. It offers scalable architecture, and quick deployments, and removes latency by running the code closer to the user. Containers on the other hand are an abstraction at the application layer with a logical container that has the application code, needed dependencies, files, and libraries. Benefits of containers include lower overhead because of minimal required data in the logical container to run the app, portability across multiple public clouds and agility to build and deploy. Kubernetes, an open-source system, is used to manage and maintain multiple containers across multiple hosts.

Containers have now become mainstream for developers and DevOps professionals. Docker adoption increased to 65% whereas Kubernetes saw 58% adoption in 2020. All the top-tier cloud providers including Amazon, Microsoft, and Google provide their own versions of the container and serverless offerings. With the acquisition of Red Hat by IBM, IBM is aggressively trying to penetrate the hybrid and multi-cloud market with its hybrid offerings and solutions.

Low-code and no-code development becoming the new paradigm for Cloud development

For organizations to build and deliver cloud-based digital services, with agility and utilizing the in-house talent, for their customers will lead to organizations looking to adopt and use low-code/no-code application platforms. Key advantages of these application platforms include shortened go-to-market timelines and the ability to use existing power users within their organization to build applications on these platforms. These platforms are inadvertently trying to solve the talent shortage problem that exists in the IT industry almost all the time by avoiding hiring hard-core developers to work on the traditional and legacy application development platforms. These platforms will also help organizations with building applications that can be used internally to improve and automate business processes and experiences.

75% of large enterprises will be using multiple low-code development tools by 2024 according to Gartner magic quadrant report.??

"As the ecosystems within cloud environments continue to expand and no-code/low-code become more common, organizations will be able to further optimize processes without the need for developers and the need to educate technicians in the business objectives. This also creates a new challenge: who owns the cyber security responsibility for no-code/lo-code solutions?”

Johannes Drooghaag, CEO Spearhead Management

Some of the key players offering such platforms include Microsoft, Salesforce, OutSystems, and Mendix.?Amazon has also jumped into this domain with its Amazon Honeycode offering. According to a?Gartner report, these low-code platforms are the next wave of digital transformation assets to help organizations gain a competitive edge by reducing the time it takes to get your products and services to the customers.

65% of overall application development will be using low-code/no-code in the organizations by 2024 according to Gartner report.

?Industry Cloud offerings from all top Cloud providers

Cloud providers have moved from offering general use services from their public cloud to catering more specifically to organizations in different industry verticals. There is a huge demand from industry-specific organizations to have cloud services, tools, and applications created for them to utilize in the Cloud. All top cloud providers including Amazon, Microsoft, Google, and others are now offering industry-specific cloud offerings to their customers. Some of the key industries targeted by these providers include Retail, Manufacturing, Financial Services, Government, Healthcare, and Nonprofit. The pandemic also accelerated the need for these industry-focused cloud offerings as many organizations turned to the cloud to accommodate their remote work scenarios.

Emerging technologies offerings from the cloud providers continue

Cloud computing has become an enabler for many digital transformation initiatives and is key in helping organizations evolve their business models to compete in today’s fierce tech environment. Some of the key emerging technologies available via the public cloud providers such as Machine learning, AI, IoT, blockchain, and Quantum Computing will continue to be enhanced by the cloud providers to help organizations realize their digital transformation scenarios.

Cloud computing has put these key emerging technologies within the reach of small to mid-sized organizations whereas previously these were only in reach by the large enterprises with deep pockets and many available resources.

Costs and resources required for acquiring and setting up the infrastructure or getting the needed compute power were a significant hindrance for small to mid-sized organizations to move forward on enabling many of their business transformation scenarios utilizing these key emerging technologies. Cloud computing has solved this problem now with the public cloud providers offering services, tools, infrastructure scale, and almost unlimited compute power to organizations of all sizes and shapes with the affordable pay-as-you-use model.

Certain key technologies which have gained prominence and momentum in this cloud era include ML, AI, IoT, and blockchain. For example, as an organization, you may be interested in offering customer service via using a chatbot, you may be interested in measuring the sentiment of customers across various social media channels, or you want to effectively monitor and manage an IoT network of geographically distributed devices. All such key scenarios and many others are now possible with the cloud’s emerging technologies offerings.???

All major cloud providers are offering AI, Machine Learning, IoT, and blockchain services to help companies move forward with their digital transformation initiatives. Public cloud providers have “commoditized” these technologies and have made them possible to be in reach for companies of all sizes.?According to the?IDC FutureScape 2020 report prediction report cloud, AI and IoT/Edge computing are in the top ten areas of investment for many organizations.