We have entered another year in which current economic conditions are putting pressure on companies to do more with less while simultaneously tackling the imperatives of digital transformation to keep the business thriving and competitive. To understand how organizations might approach their cloud strategies and technology investments in 2023, members of VMware’s Tanzu Vanguard community shared their insights into what trends are about to take shape.
Tanzu Vanguards, which includes executives, engineers and developers from DATEV, Dell, GAIG and TeraSky, presented their perspectives on analyst forecasts and industry data that indicate larger trends impacting cloud computing, application development and technology decisions.
Trend #1: More organizations will adopt a cloud-native first strategy, accelerating the move to containers and Kubernetes as the backbone for current and emerging applications.
According to Forrester, 40 percent of companies will adopt a cloud-native-first strategy. Forrester’s 2022 Infrastructure Cloud Survey shows that cloud decision makers have deployed containerized applications that account for half of the total workloads in their organizations. Kubernetes will drive application modernization with DevOps automation, low-code capabilities, and site reliability engineering (SRE), and enterprises should accelerate investments in this area as their distributed compute backbone.
“I agree with the cloud-native-first strategy [prediction] because Kubernetes is the basis for modern infrastructure. But you have to keep in mind that cloud native first doesn’t mean public cloud first. Especially in regulated environments, public clouds or the large hyperscalers will not always be an option,” says Jürgen Süssner, Cloud Platform Engineer and developer at DATEV. “If you look at the startup world, they start out in public clouds, but when they grow to a certain scale, cloud costs become a big issue and the need for more control to bring things back into their own can come up infrastructures or sovereignty to bring clouds. So cloud-native first, yes, but maybe not public cloud first to the same extent.”
While Scott Rosenberg, TeraSky’s practice lead for cloud technologies and automation, agrees with Forrester’s prediction, he notes that there are nuances in the details. “The growth of Kubernetes and the benefits it brings to businesses will not go away. Kubernetes and containerized environments are here to stay, and their footprint will continue to grow. As Kubernetes matures and the ecosystem around it stabilizes, I believe the challenges we face in terms of knowledge gaps and technical difficulties will diminish over the next few years. Given the maturity of Kubernetes, I believe that over the next year the industry will understand what types of workloads are appropriate for Kubernetes and what types of workloads really shouldn’t be run in a containerized environment. I believe VM-based and container-based workloads will live together and in harmony for many years to come, but I see the management planes of the two converging in the near future, as evidenced by the rise of ecosystem tools like Crossplane and VMware, according to Tanzu VM Operator, KubeVirt and more.”
Even if companies decide to take a containerized approach to their applications, says Jim Kohl, applications and developer consultant at GAIG, “It’s still a tough task to transition the company’s project portfolio to the new system. Even then, organizations will have a mix of VM-centric workloads alongside containerized workloads.”
Thomas Rudrof, Cloud Platform Engineer at DATEV eG, also agrees that we will not necessarily see the end of VM-based workloads. “Our organization, as well as the majority of the industry, already has a cloud-native-first or Kubernetes-native-first strategy and will increase its investments in technologies such as Kubernetes and containers in the years to come. Especially with new apps or when modernizing existing apps. However, it’s also important to note that there are still many apps that run in virtual machines that don’t work natively in containers, especially with third-party software. So I think there will be a need for VM workloads for years to come,” says Rudrof.
“This year, companies will focus on optimizing costs and making better use of existing hardware resources. Containerization gives you better control over application environments along with their lifecycle. It will also enable more effective and faster delivery of the application to the customer. IT departments should reorganize some IT processes that use a VM-based approach instead of containers,” says Lukasz Zasko, Principal Engineer at Dell.
Trend #2: Optimizing costs and operational efficiencies will be a focus for companies looking to improve their financial position amid an economic downturn and skills shortages. IT leaders and leaders need to embrace AI and cloud platforms and undertake platform engineering to improve costs, operations and software delivery.
Gartner’s Top Strategic Technology Trends for 2023 indicates that this year is an opportunity for organizations to optimize IT systems and costs through a “digital immune system” that incorporates software engineering strategies such as observability, AI/automation, and design and testing combined to provide resilient systems that mitigate operational and safety risks. Additionally, in the face of ongoing supply chain issues and skills shortages, companies can scale productivity by using industry cloud platforms and platform engineering to empower agile teams with self-service capabilities to increase the speed of product delivery. Finally, as organizations seek to control cloud costs, Gartner states that investments in sustainable technologies will have the potential to create greater operational resilience and financial performance, while improving environmental and social ecosystems.
“Removing the cognitive load on your developers by using platform engineering techniques makes them more productive and therefore more efficient. There’s always a debate about what can be centralized and what should and shouldn’t be centralized, as it can add too much process overhead if you don’t give your development teams that specific control,” says Sussner. “The rise of AI is unmissable in this case, as is GitHub Copilot and many smart tools for security management and many other aspects of supply chains.”
However, cost savings are not necessarily a new forecast or trend for companies in 2023, according to Martin Zimmer – Technology Lead Modern Application Platforms at Bechtle GmbH. “I’ve been hearing that for 10 years or more. AI won’t help either [cost savings] because the acquisition costs are far too high at the moment.”
On the other hand, Rudrof says, “AI has the potential to significantly improve the efficiency, productivity, and effectiveness of IT professionals and organizations, and is likely to play an increasingly important role in the industry in the years to come.” He’s also optimistic about it on platform engineering as a trend that will impact corporate strategies. “I believe that platform teams are essential to help DevOps teams focus on creating business value and providing golden paths to improve the overall developer experience,” says Rudrof.
Trend #3: Infrastructure and operations leaders need to rethink their skill-building methods to keep up with rapid changes in technology and ways of working.
Gartner predicts that by 2025, 80% of operational tasks will require skills that less than half of the workforce is skilled in today. Gartner recommends leaders implement a set of prioritized methods to transform the infrastructure and operations organization’s skills portfolio by creating a skills roadmap that emphasizes connected learning, digital dexterity, collaboration and problem solving.
“The main problem in 2023 will be how to quickly learn new skills and stay up to date with all the new tools and technologies in all fields. If you implement a toolchain today, it will be old tomorrow,” says Zimmer. He adds that implementing a competency portfolio is nothing new. “Networked learning, digital dexterity, collaboration and problem solving should be the ‘normal’ skills of anyone working within the IT organization. Long gone are the days of an IT “guru” sitting in his dark room and running away when you try to talk to him.”
While developing digital and human skills will always be important for the current and future workforce as hybrid work and digital transformation initiatives take hold, organizations must also look inward to evolve corporate culture. Sussner believes that the ability to respond to and adapt to change is a skill in itself that an organization must develop. “Not only DevOps teams have to adapt to changing requirements, but also corporate structures. Taking Conway’s Law seriously, being able to develop software in an agile way would also increase the need to be able to change organizational structures accordingly.” Conway’s Law states that organizations design systems that reflect their own communication structure.
“This major step in corporate culture requires bold managers who adopt agile principles. So, in my opinion, it’s not just about the technological transformation, but also about the corporate culture, which needs to evolve. If neither technology nor culture play this game, everything will fail,” adds Sussner.
At a time when budgets and margins are tightening, leaders should take this time to reassess investments and prioritize the technologies and capabilities that build a resilient business. As business success increasingly depends on the organization’s ability to deliver software and services quickly and securely, building a culture that prioritizes the developer experience and removes infrastructure complexity to increase productivity and efficiency will be key for 2023 and beyond be of crucial importance.
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