5 trends that will shape the cloud in 2023
Date: January 2023
By: Inayeth Govender, General Manager – Demand Generation, Tarsus On Demand
Most small and medium-sized businesses (SMBs) employ cloud services for at least some of their workloads and apps.
Throughout 2023, we can expect South Africa’s SMBs to move deeper into the cloud as well as increase the sophistication of their cloud strategies. But the shift to the cloud has only just begun.
Here are some of the trends we expect to see more of in the market this year…
1. Multi-cloud complexity
The majority (89%) of businesses worldwide have accepted a strategy of employing several cloud providers, according to Flexera’s State of the Cloud 2022 survey. It can be an intentional tactic in some situations to avoid vendor lock-in. In others, the situation arose organically as companies moved different workloads and applications out of their data centres and into the cloud.
There are clear advantages to a multi-cloud strategy. In 2023, as the economic pressure increases, we can expect many businesses in South Africa to look for ways to reduce costs and increase efficiencies. However, many SMBs are wrestling with the complexities of ensuring compatibility, accessing skills and gaining visibility across multiple public clouds. In the coming year, we can expect them to focus on simplifying their environments in the year to come.
2. Hyperscale providers keep investing in Africa
Microsoft Azure and Amazon Web Services catalysed faster cloud adoption when they set up shop in South Africa a couple of years ago. Google and Alibaba also announced significant investment plans for Africa this year. Google is establishing its first cloud region on the African continent, too, also in South Africa.
This gives South African cloud users more options, especially for those who wish to store their data in local data centres for compliance. Companies should see better performance for latency-sensitive applications. We could also see a flurry of innovation in terms of localised apps and content. As more opportunity is identified in Africa, more start-ups are launched more tech solutions built, the cloud will continue to be the most cost-effective way to scale apps.
3. Cloud cost concerns come to the fore
Flexera’s report shows that cloud costs remain a hot-button topic for companies of all sizes. Many firms are still having trouble reducing wastage and gaining visibility into expenses, as seen by the fact that respondents selected optimising the existing use of the cloud (cost reductions) as their top objective. Cost benchmarking using FinOps technologies and procedures is becoming essential.
Locally, hyperscale cloud providers will need to change their models to drive more business into Africa and South Africa due to the rand-dollar pressure.
4. Edge solutions gain traction
The industry has talked about edge computing for years, but we are finally starting to see its potential come to fruition. According to IDC, worldwide spending on edge computing is expected to be US$176-billion in 2022, an increase of 14.8% over 2021. Edge computing moves computing resources to the physical location where data is created, dramatically reducing time to value and the instant enablement of business processes, decisions and intelligence. It has some powerful applications for analytics and internet of things-driven processes in industries such as manufacturing, mining and logistics.
This will start to become even more relevant as we see AI and ML adding greater business value. How we collect data will become more driven by IoT, and edge tech will give birth to AI-powered tech like chatbot ChatGPT.
5. Don’t sell me a service, provide me with a solution
As the cloud grows more complex, SMBs are looking to resellers, cloud aggregators, cloud providers and other members of the ecosystem to simplify things for them.
Before making a purchase, people do more research than ever before. Providing once-off products or services will lead to churn as more SMBs turn to companies offering full solutions or asking more about their pain points.
Business solutions — not applications, infrastructure or platforms — are what they are seeking. Forward-thinking resellers should consider how they can package cloud technology blocks into solutions that address business pain points such as reducing cost to serve or reaching new markets. Those who assist SMBs in reducing technical and operational complexity should anticipate rapid growth in the years to come.
2023 will be another year of strong growth
Gartner forecasts that public cloud services spending in Europe, the Middle East and Africa will grow from $111-billion in 2022 to $131-billion in 2023, an increase of 18.2% year over year.
Business models should mature in the coming year as SMBs continue to rely on the cloud to drive efficiencies, boost productivity and increase innovation.