Experimentation gives way to specialization as more companies learn about cloud-based workloads. Still, there is room for growth and expansion.
Analysts estimate that only 15% of IT spending is in the cloud, but 90% of companies have cloud systems in place. The mismatch highlights the room for growth, especially around the modernization of basic applications.
Many trends for 2022 echo those of past years, but this year will lead to more specialized adoption as companies evolve and formalize their strategies.
Here are three trends that will shape cloud usage in 2022:
Natural growth tray
IaaS providers have relied comfortably on double-digit market growth, driven by the initial adoption of services. While an outreach and expansion strategy can drive tool adoption by customers and vendor buy-in, the consolidation of infrastructure and platform-based services is reshaping the Marlet.
Lack of segregation of services could slow revenue if vendors don’t think about innovation for the benefit of consolidation and what they need to deliver to customers to maintain growth, says senior vice analyst Milind Govekar -President at Gartner.
The industry has already seen an example of stalled growth – the enterprise resource planning market has seen popularity and widespread adoption, but then innovation is dead, Govekar said.
Monolithic ERP systems are bulky, making modernization difficult. As technology has become more composable, upgrades and modernizing the schedule are an art.
Computing is archaeological, with application civilizations buried under layers, contributing to technical debt, Govekar said.
With smart adoption, businesses can reduce technical debt by embracing cloud native and utilizing services, which will leave room for innovation, he said. Any cloud provider that can support this will continue on its growth path, at least for the next five years.
Maturity gives way to optimization of cloud costs
The uncertainty surrounding the pandemic has led to more investment in technology, a trend that is expected to continue this year. IT budgets are expected to jump 3.6%, the largest increase in a decade.
Concerns about managing technology spend coincide with investments, and as cloud bills rise, companies are looking carefully at spending.
As cloud adoption moves from a trial to a concerted investment, companies look to optimize their cloud spend, said Brian Adler, senior director of cloud market strategy at Flexera. More and more businesses are considering savings plans, Reserved Instances, and discounts for engaged users.
The hesitations around a long-term contractual engagement with the cloud are fading. In turn, business leaders are looking for programmatic discounts, he said.
Multicloud strategies take the lead
Private, public or hybrid cloud has dominated the industry at one time or another, with preferences changing due to technological needs or security concerns. Multicloud strategies use multiple vendors, aligning vendors with workloads.
It’s a shift from the gradual accumulation of cloud services to highly controlled and strictly planned adoption.
In Wells Fargo’s case, Microsoft Azure is its primary public cloud provider, but it will also use Google Cloud for advanced workloads, including AI and data solutions.
In many cases, organizations look to single vendors, but they also fear becoming beholden to an individual market, said Dhaval Moogimane, partner, high tech and software at West Monroe.
Businesses navigate the boundaries of the cloud, from service geography to supporting edge analytics. If performance fails with a primary vendor, businesses will look to other organizations to meet their IT needs.
Organizations will consolidate conditional transactions and workloads around a pillar of large vendors, but workload considerations could drive adoption of multiple vendors, according to Moogimane.