How AI is changing the cloud landscape

We explore the dramatic rise in AI adoption, highlight how it has reshaped the cloud computing market and detail some of the trends to watch next year

If 2022 was the year generative AI broke through, 2023 was the year the technology truly took off.

And with the surging popularity of AI, the cloud computing world continues to evolve. As the year draws to a close, Technology Magazine hears from experts in the field about their thoughts on the cloud technology landscape today, and how they see the rising use of AI evolving over the next 12 months.

Reflecting on the last year, how has the surge in AI adoption reshaped the cloud computing market?

Sascha Giese, Global Tech Evangelist at SolarWinds, highlights the remarkable leap initiated by OpenAI's ChatGPT.

“The most significant impact on cloud computing came from OpenAI's "triumphal procession”, after launching ChatGPT just over a year ago,” he says. “With Microsoft's involvement, this technology swiftly found its way onto Azure. Now, others are following suit, with Google leading the way by introducing Bard, and more interesting for enterprise, PaLM and Vertex. 

“We’re currently in a ‘hype’ phase and are yet to see what the future holds for these competing technologies. However, one thing is clear – the world of AI is finally revealing remarkable use cases for cloud computing, and accessibility and affordability have considerably improved.”

As Maynard Williams, Managing Director, UK at Accenture, describes, these consumer-grade tools have AI accessible to a broader audience. “We’ve seen a flood of interest in generative AI in the last 12 months – with consumer-grade tools like ChatGPT putting AI into the hands of everyone in a way that simply wasn’t possible before. With generative AI front of mind for business leaders, many CIOs have been tasked with incorporating it into their business at record speed – and this has implications on cloud usage and dependency.  

“Our advice remains the same: focus on addressing the business problems you need to solve – and then identify the right technology and processes to do that. On many occasions, the question businesses have been trying to answer is ‘how do we use AI as quickly as possible?’, not ‘how do we fix this business problem?’. Addressing the latter will drive the change they’re looking for – and in some cases the answer will be AI.”

As pointed out by Agustin Huerta, Senior VP of Digital Innovation at Globant, the last year has seen competition among cloud service providers aiming to furnish superior AI models.

“The most significant impacts were related to the competition among cloud service providers to offer the most important AI models. Some of them, such as Google and AWS, developed their own strategies but also made third-party models available, like Azure with OpenAI or AWS with the entire HuggingFace ecosystem. This marked a noticeable shift compared to the past when they primarily focused on offering their own models and services.”

Dominic Schmitt, Director of Ecosystem Central Europe at Red Hat, underscores the relationship between AI and cloud computing.

“In 2023, companies across the board have adopted AI to accelerate their processes, improve quality and reduce employee workloads. As a result of the extensive integration of AI, the cloud computing market has undergone substantial changes. AI and cloud computing have a symbiotic relationship, and there has been an increased demand for cloud services specifically tailored to AI.

“As a result of these complex changes to the market, companies are increasingly looking to open hybrid cloud platform providers to adjust their offerings. The scalability offered by cloud providers is crucial in handling the significant computational requirements of AI models and algorithms.”

This AI adoption has pushed cloud providers to bolster their infrastructure offerings, according to Kiran Minnasandram, VP and CTO of Wipro FullStride Cloud.

The increasing dependence on AI has compelled cloud providers to increase their infrastructure offerings, meeting the computational and data-heavy requisites of AI-driven applications/services. Furthermore, as cloud platforms amplify their suite of AI-focused services, they're in a way democratising the playing field, granting even those without AI backgrounds the ability to exploit these sophisticated tools. This expansion has intensified the synergies between AI adoption and the progression of the cloud computing domain.”

What are the key trends you anticipate for the cloud computing industry in 2024?

Looking ahead to 2024, Ben Scowen, Vice President of UK & Ireland Cloud & Core Leader at Kyndryl, advocates for a conscious multi-cloud strategy.

“For the past decade, multi-cloud adoption has grown due to healthy competition among leaders like AWS, Microsoft, and Google. Fierce competition pushed cloud providers beyond basic infrastructure services (IaaS) to offer more advanced platform services (PaaS) and increasingly software services (SaaS).

“The problem is that most businesses have unconsciously taken a multi-cloud approach, organically building services on two or more cloud providers leading to more technical debt and cost, coupled with increased operational and cyber risk. Sure, companies quickly deliver services to the market, which justifies the approach, but there is a price. Put another way, we have effectively spent the last 40 years building technical debt on-premise and the last 15 years building it in the cloud, unconscious multi-cloud is a major reason for this! 

“Looking ahead to 2024, a conscious multi-cloud approach will be key for enterprises that want to have access to a wider range of tech innovations, better commercial leverage over the cloud providers and an overall reduction in cloud technical debt.”

Accenture's Williams anticipates a continuous surge in demand for cloud as businesses seek technological transformation, driven by data and AI.

“We’ve seen significant growth in demand for the cloud as businesses continue to evaluate every part of their business, considering opportunities for transformation by technology, data and AI – pursuing new ways of working and engaging with customers, and new opportunities for growth.

“Indeed, recent Accenture research of UK C-suite business leaders found nearly all (92%) plan to increase technology spending in 2024, up 12% on this time last year, with a further four in five (82%) planning to boost investment on data and AI specifically.

“This anticipated rise in demand will continue to place greater emphasis on cloud providers to deliver the infrastructure and compute power to enable the likes of large language models (LLMs) to process vast quantities of data at superfast speed. Consumption is only set to increase again, as organisations continue to require more of their cloud providers.”

Are there any emerging sectors within cloud computing that you foresee becoming particularly significant in 2024?

Minnasandram predicts that regulatory requirements and macroeconomic conditions will significantly influence cloud strategies.

“Regulatory requirements are expected to introduce heightened resiliency standards, particularly for regulated industries. This regulatory landscape will prompt enterprises to revisit and potentially recalibrate their existing cloud strategies.

“Moreover, the macroeconomic conditions predicted for 2024 will considerably shape the trajectory of cloud transformations. As enterprises navigate these conditions, the central themes will drift toward Operational Excellence, Cost Optimisation (ROI), and an even higher emphasis on high-calibre engineering solutions.”

Generative AI incorporation into cloud applications and services at scale is another trend to watch, according to Williams.

“We will see generative AI being incorporated into cloud application and service production at scale – whereas now it’s mostly still typically sat with innovation teams or being experimented with internally. This will have implications across nearly all sectors, but we expect it to impact FinOps models as well as hardware optimisation, needing to be incorporated. 

“Outside of generative AI, we will see further silicon specialisation in the cloud, with more choice of specific chip types for specific types of computing, from data-intensive workloads to machine learning and training.”

Finally, Scowen highlights the emergence of distributed cloud as a result of the combination of multi-cloud and hybrid cloud strategies, terming it as a conscious distributed cloud developed from a well-mapped technology stack over time.

“The advent of cloud provider appliances like Dell HCI Azure Stack or AWS Outposts that allow businesses to create a public cloud experience on premise – i.e. hybrid cloud – have been key to its growth over the past few years. This will continue in 2024, given it allows companies to unify the IT experience, simplify the technology landscape, reduce technical debt and the skills demand, while allowing portability of workloads between public and private cloud. 

“Multi-cloud combined with hybrid cloud leads to the term distributed cloud, which is in fact, what most organisations will end up with. Those that have long-term plans, and a dedicated team of conscious multi-cloud strategists will be the first to capitalise from its benefits. And 2024 sounds like a great year to begin this journey.”

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