While 2023 brought remarkable advancements in the tech world, generative AIÂ stole the show. Throughout the year, CIOs explored what potentially transformative AI could do for businesses. By the end of the year, those theoretical use cases started to materialize into real, useful tools that appeared inside various platforms.
As generative AI dominated the world, it became clearer that its development and deployment would be in the cloud. Sure, there’s a lot of talk about running AI tools in a home data center, but the reality is that the cloud has the tools, infrastructure, and services needed. That’s nothing new, but it’s confirmation that the cloud is where things will happen for AI. So, the question becomes what else IT architects are looking at to ensure they take advantage of all the other potential cloud-based initiatives.
That move to the cloud was reflected in the projected spending. Forrester expects cloud spending to double, from $446.4 billion in 2022 to more than $1 trillion in 2026. Similarly, Gartner says worldwide end-user spending on public cloud services will grow by 20.4%, reaching $675.4 billion in 2024, up from $561 billion in 2023. Generative AI and application modernization are driving the growth. With that in mind, here are five cloud trends for CIOs that will make the cloud even more integral to your business strategy in 2024.
Also Read:Â Top 20 AI Cloud Companies to Know in 2024
#1 AI services designed for cloud environments, Fostering Innovative Applications
New technology usually evolves to change our lives. It was not immediately clear that the smartphone would be revolutionary when the first iPhone was launched in 2007. Neither is it easy to know how generative AI will be used as many people speculate about it.
Today, many powerful AI services can be accessed in the cloud. In 2024, the ability to customize generative AI using your company’s data and integrate those customizations with other technologies is becoming more feasible. Many vendors are doing similar things to help businesses directly.
Generative AI can vastly improve operations. It will summarize long reports, improve the user experience with higher-end AI chatbots, and detect real-time customer sentiment shifts. All of these have origins in AI services in the cloud.
IDC report says US$151.1 billion: Projected spending on generative AI solutions through 2027. The annual growth rate in generative AI solutions from 2023 to 2027 will be 86.1%.
#2 Hybrid Cloud Solutions are becoming Conventional
Large organizations spend a fortune on business applications that run both in the cloud and on-premises. In 2024, unlocking data from these hybrid systems will become much easier. Software vendors now know that migrating to a cloud-centric technology stack is going to take years.
Key Advances:
- Modular Software Architectures, Enabling rapid customization;
- Faster APIs, Improving integration and performance; Higher-bandwidth networks, Enabling smoother data transfer;
- Distributed Cloud Infrastructures, Flexibility in deployment;
- Low-Code/No-Code Tools: Quick to combine on-premises and cloud applications;
- Such innovation will deploy complex applications that squeeze the most resources in any location.
The following are the advantages organizations have:
- Interchangeable Building Blocks: Applications can be easily built and rebuilt.
- Precision Deployment: Cloud infrastructure can be placed in exactly the right location.
- Enhanced Efficiency: Development times are reduced, and performance improves.
- Cost-Effective Platforms: Use the most economical resources. Industry Outlook
Projected Growth:
The global hybrid cloud market is projected to grow from $125.1 billion in 2023 to $558.6 billion in 2032. According to IMARC Group, the annual growth rate is projected to be a strong 17.5%.
Also Read: Hybrid Cloud Services: Enhancing Data Security and Business Agility for CIOs
#3 Multicloud strategies are driving increased collaboration
The evolution of your technology stack probably wasn’t free of side effects and trade-offs. Most enterprises didn’t reduce their vendor list when selecting a cloud provider. Now, you have on-premises software from one set of suppliers and cloud-based systems from others, pitting you against integration challenges.
In 2023, major cloud providers took action to support connections between their platforms actively. They provided tools, standards, and protocols that make it possible to run workloads where you want and to interconnect them for new applications, with the full support of the vendors. Some providers went so far as to deploy their cloud infrastructures in the same physical data centers to offer more choices for customers. For example, in September, Oracle’s Larry Ellison and Microsoft’s Satya Nadella jointly discussed their multicloud vision.
Key Developments for 2024
- More cooperation from cloud providers will benefit CIOs.
- Focus on interoperability: Consider vendors who still try to lock in your business by not allowing interoperability.
Also Read: Top 10 Multi-cloud Security Solutions to Know in 2024
#4 CIOs Focus on Reduced Cloud Expenses
Cloud-based applications are increasingly containerized, promising huge cost advantages and even larger innovation opportunities. Containers bundle all the dependencies and configurations into light, self-contained, portable bundles that can be quickly spun up or down as needed.
Key Benefits of Containerization
- Cost Savings: Containers enable easy deployment and right-sizing of applications, thereby making cost management easy. For example, extra containers can be brought to bear during periods of increased demand, such as end-of-month financials or holiday sales, and turned off when demand decreases.
- Scalability: Containers scale granularly and often automatically based on metrics like CPU utilization and memory use. This ensures that applications remain available and continue to meet users’ needs.
- Consistency and Security: Containers promote consistency and security by ensuring that applications perform the same way no matter the underlying infrastructure, whether they move among cloud providers or run partially on-premises.
Adoption and Trends
- Kubernetes Impact: According to a recent survey, 549% of respondents indicated that Kubernetes has driven them to increase their cloud spending, with 28% stating that Kubernetes represents half of their cloud budgets.
- Industry Standards: CIOs should favor containers based on industry-standard, open-source technologies like Kubernetes and Kafka. Kubernetes manages containers in cloud-based clusters, while Kafka enables those containers to handle real-time data streams at scale.
Strategic Outlook for 2024
Adopting containerization using Kubernetes and Kafka is a future-proof architecture that ensures flexibility, efficiency, and innovation in cloud-native computing. The Cloud Native Computing Foundation endorses this, benefiting enterprise businesses seeking advanced cloud solutions.
#5Â RAG and vector search will Enhance generative AI results
If you haven’t heard about retrieval-augmented generation, let us introduce you. It turns out that feeding generative AI your data will not guarantee that it will give you well-informed and up-to-date answers to specific organizational queries. The process would be resource-intensive and could give away information you don’t want to give away, and vectors can help.
Here’s how it works:
RAG provides a mechanism to improve responses’ relevance and trustworthiness. It does this by drawing in your organization’s most timely and applicable data and enabling the model to cite source documents. To make it easy to determine what data is relevant, indexes, called vectors, are added to your data to make it highly searchable. Vectors are formed to easily determine what data RAG should feed to the AI for the best outcome. And, you can keep certain sensitive information off-limits. Now, the system uses only the data you pick when producing its responses, making the output highly relevant to queries within your domain of expertise. Working as a team, RAG and vector search will simplify the way organizations deploy generative AI while dramatically\nenhancing performance, accuracy
Also Read: RAG Strategies for CIO Success: Harnessing Data Retrieval Potential
Wrap-up
Organizations increasingly view the cloud as the place to develop and deploy applications. Application vendors provide their customers with a desire for cloud-based applications complete with browser-based user interfaces, which minimize codebases and eliminate the dilemma associated with compatibility problems across software generations.
Developers get a simpler task and can tap a broad set of cloud-delivered services — everything from AI to databases and user identification systems. The universal interface is the browser, which removes multiple devices headaches.
Perception about clouds has seen a sea change. Organizations moved from “Let us try out the cloud solutions” to “Let us embrace the cloud”. And today, “The cloud is the assumed destination for new applications, storage, and analysis, and there needs to be a pretty substantial reason not to use it”.
FAQs
1. Why is the cloud the preferred environment for AI development and deployment?
The cloud provides the necessary infrastructure and resources for thriving AI applications, allowing organizations to quickly deploy, manage, and scale their machine-learning models.
2. What are hybrid cloud solutions, and why are they becoming more popular?
Hybrid cloud encompasses a blend of on-premises infrastructure, private cloud services, and public cloud platforms like Amazon Web Services (AWS) or Microsoft Azure, all orchestrated to work seamlessly together. This model aims to establish a secure, automated environment that fosters productivity and scalability for evolving businesses. Here are several reasons why hybrid clouds are increasingly preferred by businesses.
3. What is retrieval-augmented generation (RAG), and how does it improve AI results?
RAG enhances AI results by integrating timely and relevant organizational data, making responses more accurate and trustworthy. It uses vectors to index data, ensuring the AI retrieves and utilizes the most pertinent information while securing sensitive data.
4. What role does Kubernetes play in cloud computing?
5. Why does application modernization hold a significant focus in the cloud?
