Cloud computing has been driving massive transformations in the tech and business landscape. The “as-a-service” revolution freed companies from investing in expensive infrastructure, as they turned toward cloud service providers for everything from on-demand storage to security and networking resources.

Going further, we can expect organizations to continue using cloud services to access an even wider range of technologies and use cases. If the main focus until now has been on cutting down costs, new “as-a-service” offers and emerging cloud models make it clear that cloud adoption is much more than a cost-saving opportunity. It’s one of the main ways businesses can become more innovative, agile, and future-ready.

As 2023 is coming to a close, digital transformation tools and efforts are still a main concern, and, if 2024 cloud computing trends are an indication, these efforts won’t slow down any time soon.

The cloud continues to grow with exciting use cases

According to industry statistics, business spending on cloud services and infrastructure is expected to surpass $1 trillion for the first time in 2024. What’s more, 90% of companies surveyed by Deloitte consider the cloud essential for growth, digital transformation, and maintaining a strong position in the marketplace, especially in combination with other technologies like AI, IoT, and analytics.

The cloud has become the centerpiece of IT strategies. More and more organizations are using cloud technologies not just to improve specific operations but to create holistic strategies centered on enterprise-wide cloud migration.

Cloud technology essentially makes any other technology faster and more accessible, opening up a whole new spectrum of possibilities and use cases, from industry-specific cloud to gaming powered by ultra-fast networks like 5G and Wi-Fi 6E.

Let’s now explore some of these upcoming cloud market trends in depth.

1. Cloud and AI, a powerful duo

AI and the cloud emerge as one of the most powerful combos that are likely to dominate in 2024. On the one hand, the cloud makes AI technology accessible to companies of any size, and, on the other hand, AI helps cloud providers improve their services and infrastructure provisioning.

AI-as-a-service

Gathering data and training algorithms require huge amounts of computing power and storage very few companies can afford. Rather than building their own AI infrastructure, organizations now have the option to access AI capabilities through the cloud at the price of a subscription.

Through platforms such as Google Cloud AI or Microsoft Azure AI, companies can build and deploy AI-powered applications or incorporate speech, vision, and language understanding into existing systems without having to code and train their own models.

AI and the future of cloud services

Not just businesses, but cloud service providers themselves are relying on AI to create more efficient and cost-effective cloud services for their customers and automate tasks. This includes managing the vast networks required for distributed computing, automatically adjusting cooling systems in data centers, or using AI to predict traffic spikes and kick off autoscaling.

Going further, AI is likely to play an increasingly important role in delivering cloud services to users as well as building the infrastructure needed to deliver them.

2. Pay as you go through serverless computing

Sometimes referred to as “function-as-a-service”, serverless is another recent development in cloud computing that has been gaining traction. Together with AI-as-a-service, this goes to show the growing popularity of the XaaS model, where virtually any kind of IT resource or service can be delivered via the cloud.

Through serverless computing, companies are no longer tied to leasing a certain number of servers or paying for fixed amounts of bandwidth. Instead, cloud providers allocate resources based on demand and companies pay for the actual storage space or CPU time they use.

Despite the name, servers are still being run to provide backend services. However, “serverless” means that companies can deploy applications without worrying about managing and configuring the underlying infrastructure or scaling it accordingly.

3. The rise of the industry-specific cloud

Cloud services aimed at specific industry needs and requirements are becoming increasingly popular, with AWS Healthcare and IBM Cloud for Financial Services being just two examples. Early adopters included heavily regulated sectors like finance and healthcare, with industry clouds now being used by the energy, manufacturing, and public sectors.

According to Gartner, nearly 40% of companies are researching cloud platforms focused on their vertical, with 15% of them considering deployment in the next two to three years. As a result, Gartner predicts that by 2027, companies will use industry cloud platforms to accelerate more than 50% of their critical business initiatives.

Industry cloud platforms offer a variety of services and tools tailored to strategic use cases, from regulatory compliance and custom-made cloud disaster recovery solutions to integrations with industry-specific applications like supply chain management.

4. Going multi-cloud is an increasingly popular strategy

Companies are not just looking for tailor-made cloud solutions, they are also selecting cloud vendors based on a multitude of criteria. This is why more and more businesses are reluctant to rely on a single cloud provider to meet all these criteria, with as many as 84% of mid-to-large companies already adopting a multi-cloud strategy in 2023.

Becoming too tied to a particular cloud ecosystem can also become problematic if that provider chooses to discontinue support for an application or a service. By going with a multi-cloud strategy instead, companies can spread workloads across several cloud providers and take advantage of each vendor’s strengths.

What’s more, this creates a higher level of redundancy where system errors can be quickly compensated before they cause a critical failure of business operations. Combined with a containerized approach, multi-cloud infrastructures provide businesses with the flexibility and resilience they need for the future.

5. Containerized cloud applications increase interoperability

Multi-cloud infrastructures go hand in hand with the growing popularity of containerized applications. Applications with all their dependencies are encapsulated in containers that can be easily migrated and run across cloud providers. Containers allow applications to behave consistently regardless of the host and can be easily managed through container orchestration tools like Kubernetes.

Just like a serverless approach decouples applications from their underlying infrastructure, containers decouple applications from their host. By providing a consistent environment, containers can be used to run applications anywhere, enabling the kind of flexibility needed in a mixed-vendor environment.

6. Hybrid and edge computing are blurring traditional distinctions

Following hybrid and edge computing trends, traditional distinctions between cloud and on-premise are gradually disappearing. Rather than signaling a particular location, the cloud has become a general operating model that combines different environments -  public clouds and private clouds, on-premises data centers, and “edge” locations.

This hybrid approach enables companies to create more versatile setups that address their specific business needs without having to rely on a single public cloud. Many organizations choose to go hybrid to reduce costs, minimize risk, and extend their capabilities, a hybrid cloud approach being one of the fastest-growing infrastructure setups today.

According to Cisco’s 2022 Global Hybrid Cloud Trends Report, an overwhelming 82% of IT leaders say that they have adopted the hybrid cloud with this number only likely to grow in the future.

Similarly, edge computing has been significantly boosted by the rapid expansion of IoT. By reducing dependency on a centralized cloud server, edge computing allows processing to occur as close as possible to where data is collected, providing much-needed speed for wearables and other IoT devices.

7. Cloud drives innovation in blockchain, IoT, and quantum computing

One of the biggest benefits of cloud computing is the fact that it makes other technologies accessible at scale, encouraging innovation. Next-generation cloud computing acts as a gateway to many other transformative technologies like IoT, blockchain, and quantum computing.

Because companies no longer have to invest in expensive infrastructure, they have the freedom to evaluate emerging technologies, experiment more, and iterate faster, which will be the trend in 2024.

One example is deploying blockchain via cloud-native Kubernetes clusters. This might soon become a standard of adoption as teams look to solve blockchain complexity and integration concerns.

Similarly, cloud providers are stepping into the quantum realm, promising breakthroughs in complex problem-solving. While quantum computing might not become mainstream any time soon, cloud providers are investing in R&D, so we can expect to see developments in this direction in 2024.

8. The growing requirement for real-time cloud computing

The demands placed on next-generation cloud technologies are evolving. Part of this reason has to do with the growing need for real-time data and analytics. Businesses rely on up-to-the-minute insights not only to make important decisions but also to monitor complex systems like factory assembly lines or air traffic.

Furthermore, a big part of our daily entertainment is currently streamed, from movies and music on Netflix and Spotify to new forms of delivery like cloud gaming. Cloud gaming enables players to run video games on remote servers and stream them directly to their devices, rather than installing the games locally.

All these developments require an unprecedented computing speed which cloud vendors are battling to provide through technologies like 5G networks and future 6G networks. In 2024, the integration of 5G and cloud computing will enable faster data transfer, lower latency, and improved device connectivity.

9. Adopting FinOps to manage cloud cost and technical debt

The pandemic accelerated cloud investment, with many companies turning to the cloud for the tools, storage, and data access they needed to empower remote workers as fast as possible. However, as the crisis settled down, a lot of these companies had to account for the initial overspending. As a result, businesses are now adopting FinOps as a way to manage their cloud costs more efficiently.

Inspired by the DevOps movement, FinOps blends finance and operations into a set of practices and tools for optimizing cloud spending. The goal is to get the maximum business value by encouraging engineering, finance, and business teams to collaborate and make better, data-driven spending decisions.

FinOps enables companies to look at how cloud resources are being utilized, fix past mistakes, and address outstanding technical debt to lower costs. As we’re moving into the next year, we’re likely to see more cloud providers offering FinOps services, as well as an addition to cloud cost management tools.

10. Increased competition between key cloud players

As cloud providers are approaching saturation in terms of the services they offer, they need to find new ways to differentiate themselves. The race to enhance existing cloud services through AI is one such example. The increasing prominence of generative AI has sparked intense competition among the leading cloud providers - AWS, Google, and Microsoft.

The biggest cloud players are also in competition to accommodate the growing demands that come with the sovereign cloud, a rising customer priority. The sovereign cloud is an umbrella term for a range of solutions that enable organizations to take control of their cloud data by making sure it remains in one jurisdiction and cannot be transferred across borders.

Top German financial services providers and other European countries already announced their commitment to the sovereign cloud, with hyperscalers being expected to announce 30 new cloud regions globally in 2024.

Cloud security - one of the biggest challenges for 2024 and beyond

Cyber budgets are expected to increase in 2024 at a higher rate compared to this year and for a good reason. PwC’s 2024 Global Digital Trust Insights found that the proportion of businesses that have experienced cloud attacks has increased significantly year over year, from 27% to 36%.

Emerging technologies and new cloud architectures come with specific vulnerabilities that businesses are only beginning to fully understand and tackle. Because of the added complexity of multi-cloud environments, tools and security approaches previously used on-premise are no longer effective. Containerized applications, hybrid cloud, and multi-cloud require a new approach in terms of data and infrastructure security, where observability is prioritized.

By combining observability and security, organizations can monitor complex systems, detect and correlate issues, and respond to incidents faster.

Observability tools allow teams to leverage AI and root cause analysis to understand the nature of an incident and even predict threats. Observability emerges as a new paradigm in cloud security focused on having a complete picture of the system’s security status at all times and fast action.

Conclusion

The cloud computing landscape is incredibly dynamic and 2024 promises to bring new changes and challenges. Staying ahead requires not only a good understanding of these trends but also a winning cloud strategy that enables your organization to take full advantage of these opportunities, while also keeping risks at bay.

As a certified AWS Consulting Partner, we’ve helped dozens of businesses navigate the ins and outs of cloud technology and build a cloud adoption strategy that works for them. We empower businesses to take full control of their cloud environments through proper configuration, observability best practices, and solutions that cut down costs and improve performance.

Check out how we helped a leading fintech SaaS company reduce cloud costs by up to 50%.