In 2021 we saw corporate investments in the cloud spike, although business leaders are still struggling with cloud projects in terms of education, guidance, and talent. In 2022, our view is that cloud investment will remain strong, with more business leaders taking ownership of their cloud journey. This year, leaders across organizations have far more support for this transformation, including outsourced services, solutions, and especially access to cutting edge cloud services and SaaS – further empowering them at various levels to lead cloud transformation projects with more confidence.
2022 has started off with echoes of 2021; a raging global pandemic coupled with economic hiccups, and consumer unease. How has this translated to the cloud industry? If cloud investments to date are any indication of things to come, then the cloud is still flying high as Gartner estimates cloud spending will exceed $480 billion next year, up over 21% from $396B in 2021.
With an increase in cloud investments and more savvy business and cloud leaders, guidance and support in terms of services and software are required now more than ever. Although there are several topics that will trend this year, we see these 5 as the ones to track in 2022.
Talent Hyper Demand
Workforce shortages in IT are nothing new and it came to a boiling point in 2021. Companies found it very difficult to not just retain cloud talent, but to locate them in the first place. Organizations made big commitments to the cloud last year, and with budgets in hand coupled with this increased demand, the struggle to hire cloud talent has only intensified.
There are some notable factors which have contributed to this battle for talent. For one thing, the pandemic has caused us all to rethink our priorities and careers. For those in IT, work/life balance and choice of remote vs. office are more serious considerations than years past, and thus have forced hiring companies to offer hybrid work environments with flexible, agile hours.
The big cloud providers are certainly feeling the talent shortfall. AWS, Microsoft Azure and Google Cloud have vacancy rates between 1-2%, translating into important cloud roles being left empty across the board. AWS for example, has a quota for 6,764 software development positions, 4,243 and 2,069 solutions architects, to be filled.
Serverless Cloud Growth
Serverless architecture continues to see wider adoption and popularity amongst companies. Utilizing cloud-native services such as Function as a Service (FaaS), DataBase as a Service (DBaaS) and developing Software as a Service (SaaS) offerings, allows for more choice and flexibility for organizations to scale and pay-as-you go. The case for serverless becomes ever more compelling when considering the benefits primarily around application development and change speed, lowering application maintenance and compute costs, and increasing transaction speed. Is this the end of servers as we know them? The move to serverless architecture may take time but we feel that its magnitude will ultimately rival that of last decade’s move from physical to virtual services.
All three hyper-scale cloud providers supply technologies for running code, managing data, and integrating applications, without having to manage servers. Offering more agile features and functionality around integrations and data storage, serverless technologies provide a value-add to any IT organization’s support for their business stakeholders.
In addition, today’s leading edge developers are similar to digital natives, i.e they are serverless natives. The implications here reinforce the need for organizations to leverage this technology to attract, and more importantly, retain developer talent. As organizations embark on furthering application modernization initiatives, one can expect the serverless ecosystem to experience out-sized growth at every turn. The move to serverless architecture may take time but we feel that its magnitude will ultimately rival that of the last decade’s move from physical to virtual services.
Modernizing Applications & Databases
Application Modernization can best be described as adopting cloud native features (including serverless) in the transformation and or migration of legacy applications. Many organizations dipped their toes in the cloud by developing new or greenfield applications. While this may have given early exposure to cloud operations and development environments, it ignores the fact that the greatest value to an organization lies in their legacy applications. This is why they were developed first. This year, the trend is certainly towards modernization of these applications to extract this latent value, be able to enhance them quicker and to lower the cost and complexity of maintaining them. All of which improves the ability to secure these applications and data. No longer are companies looking at cloud as “a place to run VMs”, but rather as the source of efficient platforms and services on which to run these applications..
There are many ways to modernize your applications including refactoring (reimagining/rearchitecting), and replatforming (moving to a new O/S or a DBaaS) or simply replacing your custom application with a SaaS offering. To improve performance and scalability, organizations have been opting to modernize applications leveraging the cloud. However, the true benefits of improved agility can be realized by actioning the entire development process including testing, quality assurance and deployment to production by automating anything that can be automated.
Environmental, Social, and Governance (ESG) criteria has set the standards and stage for organizations to improve their sustainability practices. There is an upward trajectory in environmental consciousness from the public putting further pressure on companies to focus on energy sustainability. While frequently overlooked, moving IT workloads to the cloud is one of the quickest ways to achieve a material reduction in an organization’s carbon footprint. Organizations typically look to the cloud for improving agility, scalability, and reducing costs.
As elaborated in our previous blog, the cloud’s outsized impact on sustainability and energy efficiency adds yet another incentive for organizations to accelerate application modernization and migration to the cloud. Benefits can be seen through data center efficiency, fewer underutilized CPUs and adjusting for resource usage.
Microsoft, Amazon, and Google all have each made public sustainability commitments. Amazon and Microsoft have committed to sourcing 100% of their power from renewable energy sources by 2025. Google is already carbon neutral and will operate solely on carbon-free energy by 2030. Companies such as Ledger8760 are working to make it easier to understand, measure and report your carbon footprint, but it remains a formidable task for most entities without the scale and resources dedicated to such initiatives.
“Most of our customers have active carbon footprint reduction targets. They often, however, do not realize that their ongoing cloud migration efforts are one of the most effective methods to reduce carbon emissions.” Derek Niece, Director of Partner Services - Tidal Migrations
Cloud Software Ecosystem
Few doubt that software will continue to support company leaders through their digital transformation journeys. As customers and the business units within companies increase their demands for faster and faster change with error-free, superior user experiences, software providers and partners who offer more customizable and integratable solutions will thrive. This availability of a multitude of software options will further empower business leaders to achieve their business transformation goals and leverage advanced technologies such as AI, machine learning and the Internet of Things (IoT)..
In order to leverage these solutions, companies will need to transform their legacy applications to cloud and develop new cloud-native applications with an eye to seamless integration with this ever expanding software ecosystem.
As Marc Andreesen cleverly identified over 10 years ago: “Software is eating the world” (Why Software Is Eating The World. QuickHoney. By Marc Andreessen. August 20, 2011.)
There are several free tools helping companies make better decisions, even before embarking upon a cloud journey. Companies such as Tidal Migrations provide free software for leaders to make a business case for validating their cloud initiative with cloudcalculator.com. Using saveonclouds.com, companies can schedule existing cloud workloads to manage resources wisely, stopping energy waste and reducing costs by choosing the right times to activate and shut down servers.
With so many technology options at their fingertips, business leaders are now able to make better IT investment decisions in support of their business goals. Executives however, need to take more ownership of their cloud migration journey. With executive sponsorship, they will see faster business benefits with less cost overruns, time delays, or other impediments to leveraging the cloud successfully.
“By understanding how modern software development techniques that leverage cloud services, adopting agile methodologies and applying these to the transformation of their legacy applications, executives will see a multiplicative effect on their businesses.” Jason Hurlbut, Chief Value Officer - Tidal Migration
Taking ownership of cloud projects encompasses several factors - executive sponsorship, getting the right resources with the right skills in place, learn-by-doing with strategic partners, leveraging bespoke software and automation, and a business-first approach to cloud adoption. It’s not just people, processes, and software, it’s all of these combined with an important mind shift which many leaders are now making.
In years past, we have seen many business leaders take a cloud-first approach without first fully understanding their business requirements. It becomes less about leading with strategy, but rather why, and then how a company should make its move to the cloud. As we see more leaders asking the right business questions upfront – making a data-driven business case that leverages these non-technical answers becomes even more paramount.
Although further education to create more and more skilled personnel is still required, 2022 will be the year of cloud confidence. For many business leaders, transforming to the cloud is becoming less of a mystery and they are realizing that empowering their organizational culture is every bit as, or more important than the technological solutions. Will your organization make the leap this year?
Written by: Zoltan Lorantffy, Marketing Lead and the Tidal Migrations Team.