Navigating the Cloud in 2024: AI Disruptions, Emerging Players, and Standardization Challenges

As the cloud computing landscape evolves, 2024 is poised to bring challenges and opportunities for both cloud providers and their customers, driven by the transformative forces of artificial intelligence (AI). While cloud giants wield immense power, disruptive factors such as AI adoption, chip supply shortages, and the demand for financial operations (FinOps) are reshaping the industry. What can we expect in the year to come? This overview delves into Forrester’s 2024 predictions, shedding light on the transformative forces that will define the coming year.

The AI Impact on Cloud Providers

AI’s influence on the cloud market is unmistakable, with hyperscale cloud providers boasting the capacity to host graphics processing units (GPUs) crucial for AI workloads. However, the vulnerability lies in potential chip supply shortages. The three major cloud providers are not immune to this, opening the door for emerging players with GPUs and resurgent tech companies to cater to the growing demand for AI capabilities.

Oracle’s Rise in the Cloud Arena

Traditionally known for its database solutions, Oracle is quietly positioning itself to disrupt the cloud space. With Oracle Cloud Infrastructure (OCI), the company aims to become a general-purpose cloud provider capable of luring major accounts away from larger rivals. The surge in generative AI and large language models aligns perfectly with OCI’s capabilities, potentially leading to over ten major accounts redirecting substantial spending, totaling at least $100 million in annual cloud expenditure.

Sovereignty Concerns Driving Hyperscaler Expansion

In response to rising concerns about data sovereignty, climate change challenges, and geopolitical risks, hyperscale cloud providers are expected to announce 30 new regions in 2024. European customers, in particular, seek cloud providers offering both data sovereignty and resilience in the face of incidents like fires, outages, and ransomware attacks. The expansion into geographically separated regions aims to address these concerns and stay ahead of evolving regulatory requirements.

See also: Big Three Launch Sovereign Cloud Efforts

FinOps Standardization with FOCUS

Financial operations (FinOps) are becoming a focal point for cloud customers, leading to the rise of the FinOps Open Cost and Usage Specification (FOCUS). Developed by the FinOps Foundation, FOCUS aims to simplify cloud billing and provide a vendor-neutral, multi cloud view of resources. FOCUS is gaining momentum, supported by major players like Microsoft and Google and with AWS expected to join soon. This standardization will empower non-IT stakeholders, including the CFO’s office and vendor management, to better engage with cloud operations teams.

See also: Is Hybrid Cloud the Way to Deal with Public Cloud Costs?

Complexity and possibilities in 2024

For cloud leaders, 2024 presents a paradox of increased complexity and new possibilities. Decisions on adopting new clouds for AI model training will add to the challenges they face. Simultaneously, the adoption of FinOps practices promises more efficient management of cloud workloads. Navigating this intricate landscape requires strategic planning and a keen understanding of emerging trends.

There’s still a laundry list of considerations for companies as they move cloud operations into the new year–prioritize data security and compliance, evaluate edge computing integration for low-latency processing, mitigate vendor lock-in risks through interoperability strategies, and invest in talent development for navigating evolving technologies.

Addressing upcoming changes

It’s a significant investment in time and resources. However, addressing these considerations will contribute to a more resilient and well-rounded approach to cloud computing, aligning with broader business objectives and preparing for a dynamic and evolving technological landscape. Leveraging the insights provided, here are key actionable steps and considerations to inform decision-making and operational planning:

1. Evaluate AI Integration Strategies:

• Action: Assess your organization’s AI needs and readiness.
• Consideration: Explore the potential impact of AI disruptions on your current infrastructure and make necessary adjustments to meet evolving demands.

2. Assess Cloud Provider Landscape:

• Action: Reevaluate your cloud provider choices and potential shifts.
• Consideration: Understand the implications of Oracle’s emergence as a disruptive player and assess whether Oracle Cloud Infrastructure (OCI) aligns with your organization’s requirements for AI capabilities and overall cloud services.

3. Address Sovereignty and Resilience:

• Action: Evaluate your current cloud providers’ resilience and data sovereignty features.
• Consideration: Look closely at any announced expansion of regions by hyperscale providers and assess how it aligns with your organization’s risk mitigation and regulatory compliance strategies.

4. Embrace FinOps Practices:

• Action: Explore FinOps adoption within your organization.
• Consideration: Investigate how FinOps, particularly the FinOps Open Cost and Usage Specification (FOCUS) standard, can enhance transparency in cloud billing, streamline financial operations, and foster collaboration between IT and non-IT stakeholders.

5. Strategic Cloud Workload Planning:

• Action: Develop a strategic plan for cloud workload management.
• Consideration: Acknowledge the increased complexity in cloud decision-making, especially regarding AI model training. Consider adopting FinOps practices to optimize cloud expenditures and improve operational efficiency.

6. Stay Informed and Engage:

• Action: Stay updated on industry developments.
• Consideration: Regularly monitor industry reports, engage with relevant webinars, and consider scheduling guidance sessions with analysts to gain deeper insights into emerging trends and their implications for your organization.

7. Diversify Cloud Strategy:

• Action: Consider diversifying your cloud strategy.
• Consideration: Explore the potential benefits of a multi-cloud or hybrid-cloud strategy, considering the evolving landscape and possible shifts in the market.

8. Educate Stakeholders:

• Action: Educate key stakeholders within your organization.
• Consideration: Share relevant insights with decision-makers, IT teams, and financial stakeholders to align strategies and ensure a comprehensive understanding of the challenges and opportunities outlined in the predictions.

9. Adaptability and Agility:

• Action: Foster adaptability and agility in your cloud strategy.
• Consideration: Cultivate an organizational culture that embraces change, innovation, and the ability to pivot strategies based on evolving industry trends and technology advancements.

By integrating these actionable steps and considerations, organizations can proactively position themselves to thrive in the rapidly evolving landscape of cloud computing in 2024 and beyond.