5 Things That Shaped The Cloud Industry For 2023

2022 was a game-changing year for the cloud industry. From chip supply chain troubles to new conversations about cloud ROI, the sector is headed in an interesting direction. Here’s how the key events and trends of 2022 will shape the cloud industry this year.

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1. Focus on cloud ROI

The looming recession and race to optimize infrastructure costs made many ask:

Is it worth staying in the cloud?

Basecamp decided it was not. The company’s cloud repatriation story made rounds (resulting in some good rebuttals of DHH’s core arguments) and started the conversation about cloud ROI.

The facts are as follows:

  • Cloud spending will continue to grow, recession or not, as a Morgan Stanley CIO survey showed.
  • Cloud investments are overtaking traditional IT hardware, according to IDC.
  • But 81% of IT leaders were directed to reduce or add no additional cloud spending as the downturn looms around the corner. 

Solution? Cost optimization. 

Even cloud providers are now “proactively working to help customers cost optimize,” to quote Amazon CFO Brian Olsavsky. Though this might mean extended contracts and vendor lock-in.

2. Sustainability becomes a key part of the cloud strategy

How green is the cloud?

Cloud providers are under pressure to have a climate strategy as enterprises reassess the environmental impact of their technology stack. The Big Tech in Sustainability Report showed how Amazon, Google, and Microsoft are handling emissions, with Microsoft as the most aggressive player on the scene, aiming to be carbon negative by 2030.

The need for sustainability initiatives will only increase. Gartner predicts that by 2025, 50% of CIOs will have performance metrics tied to the sustainability of the IT organization.

Optimization offers a way out since resource overprovisioning has a massive environmental impact. The State of Kubernetes Report showed that by eliminating the industry-standard 30%+ cloud waste, companies would save 124.86 TWh globally – enough to power the entire USA for 32 years!

3. Solving the cloud skills gap with automation

The Gartner analyst Lydia Leong claims the cloud skills gap is a serious blocker to enterprise cloud adoption.

As the demand for cloud-related skills continues to outpace the supply, many organizations will invest in tooling and automation to make their existing teams faster.

More and more teams are implementing automation into their processes. In 2023, automation platforms tailored to the needs of cloud-native infrastructure will free engineers from manual configuration, leading to greater productivity and cost savings.

4. Automated cloud security

Application resilience and quick recovery from failure are on the priority list of every company looking to survive the recession by keeping clients on board.

CIOs will also use automation to boost the security of their digital immune systems. Such systems use process automation, AI-powered testing, and observability to protect applications and services from anomalies.

This is particularly relevant to relatively new cloud-native solutions with  a dynamic operating paradigm like Kubernetes. Cybercriminals constantly search for security flaws in the Kubernetes ecosystem, so teams need a helping hand in securing their deployments – solutions that deliver strategic recommendations to mitigate vulnerabilities and follow configuration best practices.

5. Chips supply chain and design

Chips are a key part of competing in the cloud world. No wonder Microsoft Azure rushed to offer something similar to AWS’s custom Graviton systems – and now provides virtual machines running on Ampere Arm-based processors.

And a lot has changed in the chip manufacturing landscape this year. 

The US is busy onshoring semiconductor manufacturing, backing it with massive subsidies. TSMC is opening a chip factory in Arizona. Intel is building one worth $20 billion in Ohio. 

But thanks to the Financial Times, we know these national investments have one serious issue: they only relate to the visible end of the semiconductor supply chain. 

What about the suppliers of raw materials, chemicals, consumable parts, gasses, and metals, without which chipmaking doesn’t work? Finding the workforce with required skills is an issue as well.

We don’t need to look far for an example.

Two Ukrainian companies produce roughly half of the world’s semiconductor-grade neon, which is key for the lasers used to make chips. Russia’s invasion of Ukraine disrupted the company’s operations, putting even more pressure on manufacturers.

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Brought to you by CAST AI

CAST AI helps engineers to fully automate Kubernetes and reduce their cloud costs by 60% on average. The platform was created for DevOps teams to save time, eliminate manual tasks, and gain full visibility into their Kubernetes costs and security. 

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This series explores the most attention-grabbing cloud technology news, bringing you up to speed with the latest releases, acquisitions, research, and hidden gems in cloud computing – the stuff actually worth reading.

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