The research firm also predicts that the cloud market will become more lucrative amid a global economic downturn.
Cloud computing has continued to shape the development of key IT business operations around the world. With Gartner suggesting that end-user spending on public clouds will grow to $600 billion globally in 2023, many organizations will look forward to more projections that will guide their future cloud engagements. To that end, Forrester has released its predictions for the future of cloud computing in 2023.
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According to the research firm, economic uncertainty, cloud-native technology, and demands for data sovereignty will reshape the cloud environment in 2023. A major public cloud player will buy a software-as-a-service provider, companies trying to reduce cloud spending will turn to third-party providers for vendor-agnostic cloud services, and “national” clouds will gain momentum , with the big German banks accepting such solutions.
Explanation of the report
The global economy has not fully recovered from the pandemic that hit it in 2020, and this has left many businesses wallowing in economic uncertainty. With the global inflation outlook for 2022 showing no signs of slowing, more companies are looking for reliable means to reduce the cost of running their businesses while maintaining their capacity to scale and innovate as required.
According to Forrester, to deliver these benefits concurrently and achieve greater efficiencies through cloud-native technologies such as Kubernetes, organizations must reduce investments in legacy systems or develop plans to phase them out.
The report indicates that due to inflation, companies will pay more attention to cloud spending. This move would benefit third-party cloud cost management and optimization providers that offer a clear-headed, vendor-neutral approach. Although this development would unsettle the big players or hyperscalers in the cloud market, they will adapt by luring customers with services that are more efficient, easier to adopt, and offer sovereign capabilities while at the same time being more secure.
The predictions and their implications for the future of cloud computing
According to Forrester’s Infrastructure Cloud Survey, 2022, cloud decision makers have implemented containerized applications accounting for half of the total in their organizations, which has accelerated their scalability. This indicates that more companies will invest in Kubernetes as their core computing infrastructure.
This Forrester forecast confirms IDC Worldwide Cloud 2022 Predictions, which states that by 2024, the majority of legacy applications will be modernized to improve efficiency. As a result, the use of virtual machines to speed up data processing will be drastically reduced in the coming year.
Forrester also predicts that in 2023 Amazon Web Services will be under pressure to meet the security safeguards of its main competitors in the cloud market — Google and Microsoft. This stems from the fact that Google recently beefed up its security portfolio by acquiring Mandiant, while Microsoft has built up its Defender offerings, including a managed detection and response service.
AWS could complement its silicon-centric approach to security by acquiring an MDR provider, but any move to adopt such a provider wouldn’t go unnoticed. Consequently, Forrester predicts that this competition to keep up with cloud security trends will push Microsoft to attract other security vendors to prevent competitors from buying them.
Forrester says Google may need to acquire a key SaaS provider or two to compete with AWS and Azure. Forrester claims that buying a major SaaS provider would increase Google’s chances of further penetrating the company and narrowing the gap between these key cloud players.
According to Forrester, more companies will rely on third-party CCMO tools to track and contain uncontrolled costs, monitor cloud spending, and keep their businesses afloat despite the devastating effects of inflation.
The report pointed out that while many cloud users still use cloud-native tools for free access and lightweight optimization features, a majority choose third-party CCMO tools for their ease of use and rich features. As more organizations push for better multi-cloud visibility and optimization, Forrester predicts that Apptio’s cloudability and Flexera One will benefit greatly from this demand.
The report suggests that we may see a large customer switch from CloudHealth to Apptio’s Cloudability and Flexera One as Broadcom’s acquisition of VMware slows CloudHealth’s momentum. It is also pointed out that there will be a big step for sovereign cloud services from leading German financial service providers and other European countries. Key cloud players such as AWS, Microsoft and Google Cloud have increased the pace to provide services for the German sovereign cloud. Additionally, as Italy announces its commitment to cloud sovereignty, the report predicts that other European countries will follow this trend in 2023.
From this report, it can be deduced that the cloud market is expected to remain highly lucrative in 2023 regardless of the economic downturn. Consider that a recent Snowflake report revealed that only 25% of workloads are currently hosted in the public cloud. This suggests that the big players in cloud infrastructure still have plenty of room to grow in the coming years.
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