Where is cloud adoption heading in 2023?

2022 was a mammoth year for the UK technology sector, with the UK tech industry now worth around a staggering $1trn, so it’s little surprise that the UK’s appetite for tech also makes it one of the top global adopters of cloud technologies. 

Most organisations are now well on their journey to the cloud, which has driven cost efficiencies, allowed them to be more agile, improve sustainability targets and have more assured business continuity. But will 2023 continue to bring more change or more of the same? We break down the key drivers for cloud growth, multi-cloud management and the competition between the major hyperscalers. 

The key drivers for adoption 

Saving money will be a key driver for cloud adoption in 2023, especially as turbulent economic times continue. Smarter spending via flexible platforms and services that can advise on cost savings will be highly lucrative along with reductions in total costs of ownership. Even though it’s more expensive, pay as you go consumption with an option to commit later is becoming the standard for winning procurement decisions, as it gives more cost flexibility in uncertain times. 

Software as a Service, Analytics and DevOps will benefit from increased investment as a result of changing financial priorities, so delivery in these areas will be critical. Tightening public sector budgets will trigger operating expenditure when capital expenditure needs to be avoided. Inflation will also impact skilled resource wage inflation, meaning risks can be mitigated by contracting a cloud service provider, instead of using internal resources. 

However, financial reasons don’t paint the full picture of cloud adoption as agility continues to be one of the biggest selling points, particularly for the public cloud. There is still a market for private cloud and colocation, but this will dwindle within certain sectors, in the next couple of decades. The internet of things will further drive some dispersed infrastructure out of the cloud as resources are increasingly deployed at the edge using decentralised computing assets such as sensors and network connectors. 

Another strong driver for adoption is business continuity via security or disaster recovery/backup. Customers know that the public cloud reduces the need for DR as it is designed to be self healing and with backup as standard. Legacy hardware in addition to being a financial burden also poses a security risk, so cloud adoption can help to improve security and avoid unnecessary CapEx, both are beneficial at times of uncertainty. Criminals are boosting their efforts so security solutions must go beyond ticking a box to actually provide comprehensive protection for key digital assets, such as by utilising the likes of a managed security operations centre.

Will multi-cloud management stay a primary focus for providers?

According to a recent Forrester survey of 313 global IT decision-makers, more than half of respondents revealed that they planned to adopt or expand their use of hybrid cloud and multi-cloud within the next two years, so it’s important to discuss these two cloud models.

Multi-Cloud is rare and only utilised by large and enterprise businesses due to the sheer complexity and difficulty to hire staff, which are rarely outweighed by any benefits of multi-cloud, but are taken due to using the perceived ‘best-of-breed’ from multi suppliers.  The big three providers constantly work to offer a comparable feature set, and to reduce the frequency and impact of unplanned incidents. Most public cloud consumers will be satisfied with multiple zones / regions on a single cloud provider – some technology leaders and organisations with niche requirements will not, it all depends and one size truly does not fit all.  

Hybrid-Cloud currently remains the strongest trend, though most customers typically adopt private cloud as a stop gap to public cloud or until they go straight to SaaS / business process as a service. Cloud Service Providers (CSPs) can help customers by making their whole journey to the cloud easier and provide value added services such as platform management, security, business continuity and DevOps. Additionally, procurement headaches can be reduced by CSPs joining a procurement marketplace or by building their own. Often CSPs deliver above and beyond and become an invaluable partner to their clients.

Who will rule the hyperscaler roost in 2023?

In reality, this doesn’t matter as the three main platforms are all chosen by customers for different reasons and meet 90% of market needs. AWS is typically chosen by more technical focused customers looking for the most optimised outcome, more developer driven activities and adoption of SaaS solutions. 

Azure is typically chosen because the customer prefers its ecosystem as it’s easy to consume, friendly and ticks every box. Larger organisations prefer Microsoft for its heritage and with legacy estates using Microsoft products. Licensing options are also more user friendly for most organisations, who may well have other existing licences.

Google has focused on more future looking services such as AI and big data, and are the only public cloud provider set to increase their prices in the current climate. It’s clear that customers choose hyperscalers for a myriad of reasons and CSPs need to help their customers to get there, rather than worry about the competition between the cloud giants of today, it’s about complimenting and not competing. 

What’s next for cloud adoption?

2023 looks to continue to be turbulent for businesses but it will no doubt be another significant year for cloud adoption, with organisations continuing to adopt it for greater agility and to aid digital transformation efforts. While 2023 isn’t expected to bring with it any major shocks, digital transformation will separate the wheat from the chaff when it comes to success both commercially and financially, so knowing the drivers for adoption will be the key to success. 

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