Today we’re to talk about cloud computing trends going into the New Year. We previously covered this topic here, but from a purely stock analysis point of view. We thought it was prudent to round this conversation on cloud computing trends more, so let’s get striaght to it!
What is Cloud Computing?
Cloud computing encompasses a pretty astounding paradigm in the realm of information technology, data security, with links to artificial intelligence; culminating in a multitude to service offerings.
Cloud vendors and cloud platforms offer services which are pretty diverse (if I do say so myself), including serverless computing, storage solutions, databases, networking infrastructure, software applications, and sophisticated analytics tools.
What gives cloud computing its edge, however, is the agnostic approach towards physical locations; unshackling users from the tyranny of using specific geographic locales.
Cloud Computing | Medium
Cloud technology allows us to access and utilize computing resources remotely; leveraging the power of the internet essentially anywhere. These cloud companies, key to delivering and servicing these increasingly complex services, are known as cloud providers.
A cloud service provider does the managing and maintaining the underlying infrastructure, allowing your company to focus on their core tasks without the hassle of worrying about ins and outs of their computing infrastructure.
Basically, cloud computing enhances operational efficiency but also facilitates cost optimization (cloud cost optimization to be exact) by getting rid of the need for substantial upfront hardware investments and infrastructure maintenance.
As all your favorite companies increasingly embark on the digital transformation journey, the adoption of cloud computing is a cornerstone in such; empowering businesses to thrive in the dynamic landscape of the digital era.
Let’s talk then:
This article is going to dive into some trends in the industry, and give you an inside look into the cloud computing trends. Specifically, we will cover:
- The types of cloud computing
- The benefits of cloud computing
- Challenges in cloud computing
- Emerging cloud computing trends in 2023
Before we go, if you need a brief refresher on investing in Small Cap stocks, here you go.
Types of Cloud Computing
Now typically, cloud services can be divided into 4 distinct categories (although, note that there are more niches emerging almost by the week). These are:
Platforms as a Service (PaaS)
Like it sounds, it offers a platform and the environment needed to develop, test, and deploy applications. Thus, the cloud infrastructure in this case in pre-configured which means a developer just needs to care about their core competencies…which is developing.
Infrastructure as a Service (IaaS)
This provides a space for users to have control over O/S configuration, other configuration, application, etc. all while the cloud service provider manages the physical infrastructure.
Infrastructure as a Service, IaaS | Cloudflare
Software as a service (SaaS)
SaaS companies (besides sending you annoying emails and cold calling you) specialize in delivery of software applications over the internet. This is typically done online or via some thin client.
Database as a Service (DbaaS)
This is specific to the management of data storage and database related tasks (like data online data centers). You, as the user, can access, query, import/export data in a scalable way.
Benefits of Cloud Services & Cloud Computing
Now cloud computing has a number of notable benefits to it that are pretty widely heralded:
Cloud computing is often more economic than having on premises infrastructure; due to users only paying for what they are using.
Disaster recovery cloud computing
Cloud computing can be instrumental to help companies recover pretty quickly which is essential for business continuity and succession planning. Disruptions can come from cyber attacks to natural disasters, either way, cloud computing can help on this front.
This one is the most obvious. Cloud computing allows the users to essentially work and access servers/data/services from multiple locations at essentially any time. In the age of remote work, this is pretty important.
Clearly here, users can scale up and down super quickly as opposed to legacy computing setups. This needs based approach is much more attractive to businesses as they can adapt to the market flexibly.
Cloud computing services and cloud providers are more responsive to technological advancements. They tend to be quick to implement these (such as artificial intelligence AI boom) into their products.
Challenges in Cloud Computing
Cloud providers do, however, have to contend with their fair share of challenges across the spectrum:
Due to ever evolving data privacy laws, cloud providers have to remain extremely flexible and stay up to data in making sure their data is stored and used properly.
Cloud Security and Resilience
Data security protocols and data privacy go hand-in-hand. Cloud solutions are especially vulnerable to cyber threats. This means that as these threats evolve, cloud service providers must also evolve in lockstep.
What is Cloud Security? Understand The 6 Pillars | Check Point Software
Ask any IT purchaser, this is such a pain. Having to integrate existing cloud services with new ones, combining multiple cloud providers to build multi cloud solutions means that all the systems must be able to speak to one another and “get along”. This, in of itself, is a complete service and job.
Cloud services can become pretty expensive pretty quickly. As such, companies need to monitor use, budget and plan quite robustly into the future. All usage should be optimized.
When you have chosen a cloud provider, trying to switch to a new one may have hidden costs in it, and costs that an organization may want to carefully consider.
Vendor Lock-in in Cloud Computing | GeeksforGeeks
Cloud Computing Trends
As technology moves at a breakneck pace, cloud providers are being forced to adapt to changes and adopt many technologies in a fast growing industry.
From cloud gaming to quantum computing, different cloud providers are driving many trends in cloud computing.
Artificial Intelligence and Machine Learning
AI and Machine Learning will revolutionize cloud computing in a few distinct ways. Specifically, self-automation building, customized learning and training data sets, personalized clouds that learn and adapt, and smarter cloud usage to name a few.
Cloud Intelligence/AIOps – Infusing AI into Cloud Computing Systems | Microsoft Research
Already, the Google Cloud Platform is investing in AI and Machine Learning quite heavily. Not far behind them are the heavyweights such as Amazon and IBM.
Multi and Hybrid Cloud Deployments
Multi cloud and hybrid cloud use is on the rise as the solution proliferate across the market. Companies are now combining public clouds and private clouds to store data.
What is Hybrid Cloud? Benefits and Advantages | CloudNow Technologies
The idea seems that hybrid cloud solutions and hybrid cloud architecture allow a company to leverage each services advantages. It reduces potential risks and failures while being pretty cost effective.
Now, edge computing involves the storage of data, data analytics, and data processing doe near the actual data source.
This means a few things:
- Reduced latency
- Increased privacy
- High data transmission rates
- Enhanced efficiency
Edge computing works in real time and is not time bound, per se, which is important as 5G begins to take off in use. Real time data use and analytics is only going to rise, meaning edge computing will inevitably become more valuable.
Another emerging trend is the proliferation of competition in the space. The Google Cloud Platform, AWS, Microsoft Azure, etc. are all competing in a space in which barriers to entry are becoming so much lower.
AWS, Google and Microsoft dominate cloud | The Register
Competition is poised to innovate in three specific ways:
- Pricing & Financial Incentives
- Other vendors, new entrants that are innovate and adopting new tools
Open Source Cloud Computing
Another fun little cloud computing trend is the increasing popularity of open-source solutions, these solutions give more flexibility and control over an organization’s infrastructure.
You can also customize for a much lower cost than traditional solutions.
An Overview of Open Source Cloud Platforms for Enterprises | Open Source For U
The Cloud Gaming Industry
The cloud gaming space is going through some interesting times, as far as the latest cloud computing trends goes.
Cloud gaming is a growing market and as such, cloud service providers are beginning to invest heavily here and build out cloud infrastructure here.
U.S. Cloud Gaming market size and growth rate, 2023 – 2030 | Grandview Research
There is also a degree of consolidation happening as smaller and innovative players are. being acquired by the behemoths of the industry that hope to offer a diverse cloud computing service that includes the cloud gaming offering.
Cloud Security & Data
As stated previously, cloud security is a going concern and challenge in the industry. As cloud usage grows, the sophistication and vigour of nefarious actors also grows in lockstep (and that is not even accounting for user error and carelessness).
As such, cloud providers are investing at a breakneck pace in features to bolster security and resilience. Investing in these aspects should improve disaster recovery, encryption, and access control methods.
Internet of Things (IoT)
IoT is essentially the use of multiple sensors for mass data generation to be stored on a cloud infrastructure.The idea is that using the sensors and data, you can support robust business data decision making.
IoT essentially acts as a the go between for remote systems and smart device management.
Among the top cloud computing trends in 2023, none will sound as salacious as blockchain. Every tech bro’s favorite buzz word.
What Is Blockchain Technology? | The Motley Fool
This distributed ledger technology is being combined with cloud infrastructure to build new products and services.
Blockchain as a Service (BaaS) are coming and will enable a company to build and deploy blockchain application inside of the cloud.
A company we covered is pretty far ahead in the space, Verses Technologies.
Cloud Cost Optimization
As new entrants drive down prices while usage grows, managing costs is a growing concern (from an already heightened position). Cloud providers are developing tools and services aimed to keep costs down and better monitor said costs.
Cost management tools allow users to optimize spending with monitoring and budgeting tools.
The Citizen Developer
What is this? Well, the idea here is that companies are building tools to allow non-coders to develop tools themselves with friendly UIs, that allow connection of popular APIs.
The Google Cloud is an example of this of a company introducing tools to allow developers to easily make complicated application that are hyper customized in a drag and drop UI.
Yes, I know, it sounds like a Call of Duty mission or something, but I promise this is a trend in the cloud space.
DevSecOps refers to an approach to development that also integrates security into the development processes.
Providers are offering tools to help companies implement such practices.
Whether we are talking about private clouds, public clouds, a multi cloud infrastructure, or a hybrid cloud; the cloud computing industry is an ever changing landscape that is also experiencing explosive growth.
Keep an eye out for new developments in the space, especially where things like AI, ML, Blockchain, and other innovative tech is concerned. Cloud strategy may prove to be a differentiator for many organizations, especially in crowded industries. Cloud strategy will help drive bottom line health among other things and will be indicative of organizational growth for some time to come.
As an investor, do your own research and keep and eye out for changes here. Just know, cloud computing is an essential part of the commercial landscape and will continue to be that. This pertains to both private and public clouds, by the way. The growth is here to stay.
With that being said, happy investing and happy researching!
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