Faced with global economic uncertainty, leaders are rethinking their budgets and operations. Investments in technology – which have been on an upward trend in recent years, driving up costs – may seem like an attractive business category for cutbacks. However, the newly released Wasabi 2023 Global Cloud Index storage shows that organizations are not afraid to spend money on cloud storage.
According to Wasabi’s latest research and report, 84% of those surveyed expect to increase their public cloud storage spending in the coming year. They also plan to invest in IT initiatives such as infrastructure migration (56%), business initiatives such as digital transformation (45%), and new data security initiatives such as backup and data recovery (44%).
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As a follow-up to this report, TechRepublic spoke with Andrew Smith, senior manager of strategy and market intelligence at Wasabi, to learn more about the rationale behind these cloud investments, ROI and benefits, and how the cloud is adapting to IoT and edge computing demands. In addition, Smith highlighted how new technologies and approaches to data storage could support businesses as data generation reaches unprecedented levels.
Why companies continue to invest in public cloud
Global cloud migration is now well established and digital acceleration efforts are well underway. Wasabi’s research shows that 89% of organizations migrated data from on-premises storage to the public cloud last year. In addition, 70% of global enterprise storage capacity is now in public and dedicated clouds.
Wasabi commissioned independent market research firm Vanson Bourne to conduct research for the 2023 Global Cloud Storage Index. The survey surveyed 1,000 IT decision makers in nine countries.
According to the report, companies are leaving their on-premises resources and improving cloud computing in search of better infrastructure resiliency and sustainability. The need to scale, the importance of access to global regions, and the desire to avoid expensive hardware purchases were also cited as key drivers for the move. Central IT, application developers and external partners have the most influence on cloud budgets.
“The value of cloud infrastructure services remains high, especially as it relates to the ability of these services to drive digital transformation and modernization initiatives, primarily for reasons such as instant scale, access to new geographies and faster time to market,” said Smith. . .
He further explained that public cloud investment is expected to increase as the amount of data companies store in the public cloud increases.
Cloud challenges and return on investment
Migrating to the cloud gives companies access to advanced and constantly updated technologies. With automation, AI/ML, business intelligence apps and IoT platforms at the forefront for many businesses, modern cloud innovation is being deployed to cut costs and improve performance. Organizations are also turning to cloud technologies to cope with contemporary challenges such as supply chain disruptions, cybersecurity, compliance and governanceand environmental pressure.
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While cloud tools give companies a competitive edge, the economic landscape and its impact on cloud storage budgets is still a concern for many companies. Wasabi’s research shows that while there is a willingness to invest in cloud storage, 52% of respondents went over last year’s budget.
“When it comes to return on investment, we expect there will be more scrutiny and risk aversion – especially for new customers considering using or purchasing a cloud infrastructure service,” said Smith. “Existing customers will be looking for efficiencies, especially those that can have an immediate impact on lowering their monthly bill. I think there will be a small reset in ROI timeframes in 2023, especially for those enterprises doing a major migration to the cloud.”
Smith also explained that companies want to reap the first benefits of the cloud in terms of cost and performance. Still, they will need to accurately predict their ROI three to five years from now as they streamline and optimize cloud usage over time.
“In many cases, understanding this long-term view is the hardest part and will become an increasing focus this year as organizations take a closer look at the long-term value of their cloud purchase,” adds Smith.
Trends shaping the public cloud sector
Multicloud investment is increasing rapidly as companies look for diverse solutions and specific features of their cloud environments. About 57% of organizations surveyed use more than one public cloud storage provider. In addition, cybersecurity, compliance and governance are decisive factors. Customer demand for secure, resilient cloud storage has a major influence on supplier selection.
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In addition, the emergence of the Internet of Things, new endpoints and hybrid work environments, which require low latency and reliable connectivity, are fueling the proliferation of edge computing. How is the cloud market working to meet the security and performance requirements of these new trends?
“Cloud storage is an important part of the edge and IoT conversation,” explains Smith. “Higher performance, lower latency and instant distributed access to data are key to these types of use cases. From a cloud storage perspective, it’s a battle against data gravity. We need to ensure that data can move securely, efficiently and cost-effectively to and from distributed edge locations and centralized regional locations.”
Data storage innovation and the future of the public cloud
The datasphere is expected to grow by 300% over the next three years, and experts warn that the world is now experiencing a data crisis. In response to this issue, Smith says he intends to continue investing in data center facilities, supported by the development of ever more efficient and dense storage media.
“Cloud service providers are in a unique position to utilize these facilities and the denser storage media as efficiently as possible,” said Smith. “From an economic point of view, we’ve seen the dollar per GB/TB of storage continue to fall, which is a good sign for those who think we’re in a storage data crisis.”
Wasabi also keeps an eye on innovative storage media solutions and believes they will play a role in the data crisis conversation.
“We have already seen significant investments in new types of storage media, such as DNA-based storage, silica-based storage and ceramic plate archival storage,” said Smith.
The role of the enterprise in managing cloud data
Not everything stands or falls with hardware innovation. According to Smith, enterprises also play a vital role in managing this data growth.
“The datasphere is huge and growing exponentially, but not all that data needs to be stored,” he said. “As enterprise storage strategies mature, they will evolve from a store-it-all position to a store-it-all position efficient.”
By using data governance and lifecycle policies, organizations can place data in the most efficient level of storage available and effectively archive data when it is no longer needed by the organization.
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Innovation in data storage, new cloud features and technologies, and companies balancing technology budgets against value and performance are expected to continue to shape the cloud storage industry. The future of public clouds, even if impacted by an economic slowdown, remains strong and resilient as leading companies prove that many of the challenges and hurdles they face can be overcome with cloud technology.
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