Are your teams equipped to identify new IT strategies and growth opportunities amid transformative changes in cloud technologies?
The explosive growth in data volumes accompanying the intelligence revolution is catalyzing a transformation in the global cloud landscape. Disruptive technologies like artificial intelligence (AI), generative AI (GenAI), and machine learning (ML) are being integrated into cloud platforms, enabling predictive analytics, automation, and intelligent decision-making. Further, monolithic cloud architectures are giving way to sophisticated, multi-cloud and hybrid cloud strategies, offering greater flexibility and resilience. Additionally, edge computing models are rapidly gaining traction as businesses aim to reduce operational overheads, enable real-time processing, and bolster cybersecurity. These forces are not only optimizing performance and efficiency but also driving a new era of digital transformation, allowing businesses to remain agile in an increasingly data-driven world.
This is unlocking prospects such as, AI services in the public cloud, managed cloud services, low code application development platforms, data storage clouds, and app modernization. Let’s delve into the top 10 strategic imperatives that ecosystem players must brace for, to thrive amid this transformation:
- Disruptive Technologies
Making the Most of AI Operations (AIOps): The rise of automation and the integration of AI, GenAI, and ML is changing how IT teams manage their resources and design their workloads. Since this demands substantial processing power, providers are being pushed to harness AI-based automation to predict cloud resource needs, optimize costs, and improve service availability.
- Innovative Business Models
Implementing Edge-to-Cloud Solutions: The growing adoption of edge workloads necessitates efficient data movement and processing between edge sites, on-premises data centers, and public cloud environments. In response, service providers feel the need to collaborate with software, security, and networking vendors to create specialized edge business models and managed services tailored to specific industries and workloads.
- Customer Value Chain Compression
Focusing on the Right Partner Programs: Disruptive technologies are driving a change in customer value chains, shifting focus from product-centric solutions to customer-centric solutions. Cloud providers can capitalize on this shift by enhancing customer experience (CX) for their enterprise clients through AI-powered personalization, and cloud-based marketplaces.
- Transformative Megatrends
Maintaining Data Sovereignty: Traditional security frameworks are proving insufficient for safeguarding multi-cloud infrastructures. Further, evolving regulatory landscapes governing data privacy, backup, recovery, security, and storage across different regions complicate the task of mitigating cyber risks. Consequently, providers feel the urgency to expand their security service offerings and accelerate innovation in cloud workload protection platforms (CWPPs), cloud-native application protection platforms (CNAPPs), and cloud security posture management (CSPM).
- Competitive Intensity
Driving New Developments in Custom Silicon: As the need for infrastructure grows with the proliferation of AI and ML, hyperscalers can no longer rely on standard CPU-based computing and off-the-shelf hardware, lest they fall behind their competitors. Consequently, providers feel the pressure to develop custom chip designs and systems-on-chip (SoC) to reduce costs, secure critical components, expand service offerings, and mitigate supply chain risks.
What strategies will your teams employ to identify best practices and mitigate the negative impact of these imperatives on your organization’s growth goals?
- Disruptive Technologies
Embracing Hyperdigitization: The convergence of edge computing, serverless architecture, quantum computing, advanced chip design, and 5G networks is accelerating the adoption of cutting-edge cloud technologies. This is casting the limelight on low-code application platforms (LCAPs) as essential tools for faster application development, service delivery, and seamless automation of employee tasks.
- Geopolitical Chaos
Securing Supply Chains for Integrated Circuits (ICs): A dwindling pool of chip and microprocessor manufacturers is intensifying supply chain risks for technology companies. But the demand for sophisticated ICs and SoCs continues to rise. This is pushing ICT providers to invest in chip design, thereby securing critical components. However, developing and producing chips is a capital-intensive endeavor with substantial entry barriers.
- Industry Convergence
Developing Holistic Cloud Services: As businesses aim to manage their cloud expenditures more strategically, they need comprehensive visibility into their entire IT environment. This demand is driving a convergence in the cloud ecosystem, with vendors from various segments such as infrastructure, storage, and application management expanding their functionalities into areas like network, platform, and infrastructure management.
- Transformative Megatrends
Harnessing the Benefits of AI: Artificial intelligence is rapidly redefining industries, societies, and businesses globally. Now, hyperscalers find themselves at the forefront of this revolution, tasked with providing the infrastructure that undergirds AI and composable enterprises.
- Internal Challenges
Bridging Legacy Infrastructure Challenges: Migrating legacy systems to modern cloud environments presents significant challenges, and cloud service providers are under immense pressure to streamline this process for their enterprise clients. Adding to this pressure is fierce competition within the infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) landscape, the need for strategic regional expansions, and geopolitical uncertainties.
In conclusion, the trajectory of cloud services is inextricably linked to these strategic imperatives. To thrive, ecosystem players must embrace disruption, leverage AI and edge computing, build innovative business models, and adapt to changing competitive dynamics. By doing so, they will not only meet evolving customer demands but also unlock new avenues for growth and value creation.
Is your organization equipped to leverage these strategic imperatives to future-proof your IT infrastructure onboard the intelligence revolution?
If not, Frost & Sullivan’s team of growth experts is here to coach you in addressing and mitigating the negative impact of the strategic imperatives listed above, while identifying new growth opportunities for your organization.
