During 2023, the main cloud providers will seek to consolidate and improve the services they offer to their customers, while exploring new ways of business in markets where their presence was not so significant before, such as the industrial business environment.
Analyzing the innovations presented by the different public cloud providers over the course of 2022, six relevant pillars can be distinguished that will represent a very interesting challenge during 2023 and that will set the course that each provider will follow in the medium term.
1. Platform (Data + Applications)
Data is the most valuable and important digital asset that companies have today. Some years ago, the main incentive for cloud providers was to get companies to migrate their data to the cloud, which meant that the greatest investment of money and resources was focused on providing tools and services to facilitate data migration operations. In this way, each provider sought to become the platform that would house the data of the different companies and generate a link that would be difficult to break between provider and company.
Throughout 2022, the need to provide companies with a complete platform that come up with all the necessary tools for working with data (ingestion, transformation, exploitation, forecasting, enrichment…) has become apparent, since, once the horizon of migrating data to the cloud has passed, it is necessary to be able to exploit the data and obtain value beyond reporting. With the current offer of services (SaaS), the great challenge for each cloud provider will be to win the loyalty of large companies and prevent them from having to go outside their platform to look for functionalities that they cannot find inside.
In this sense, it is already a fact that every cloud provider is betting on offering complete and immersive platforms, covering the entire data lifecycle and encompassing all the profiles involved in the daily work with such data, from developers, cloud architects, data engineers, data scientists and data analysts. For example, AWS has presented improvements in its main services that demonstrate efforts to build a more immersive platform, such as: Spark on Athena, Spark on Redshift, better integration of Aurora, S3 and Redshift, data preparation in Quicksight Q, Data Quality in AWS Glue. Microsoft, for its part, presented data ingestion services in Azure Data Explorer from S3 and Microsoft Intelligent Data Platform, its service for unifying databases, analytics, BI and data governance.
The main cloud providers are aware that their actions have an immediate impact on the environment, and this is why they are taking measures that promote sustainability and emissions reduction (AWS, Azure, Google).
These measures rest on two main bases following the shared responsibility model: on the one hand, the energy efficiency of the physical infrastructure and the use of cloud providers’ data center resources and, on the other hand, the use made by users and customers of the services deployed over these data centers:
- Cloud providers must ensure that their data centers are built on a foundation of energy-saving policies and increasingly intelligent and efficient infrastructures.
- Users of cloud services must plan and deploy their architectures and infrastructures using efficient models and designs that have a significant impact on short- and long-term sustainability. An example of this measure is the Sustainability Pillar that AWS introduced at the end of 2021 in its Well-Architected Framework and that during this 2022 has enhanced and put into practice as could be seen during the past re:Invent 2022.
Cloud providers must be proactive agents on this path towards the ecological transition and must accompany different customers by helping them to migrate their solutions towards a more sustainable and efficient model. An example of this scenario is Microsoft Cloud for Sustainability, which helps organizations to accelerate progress in sustainability, facilitating the storage and analysis of emissions-based data and enabling them to understand the use of their technologies to reduce their energy costs.
3. Artificial Intelligence
The clear bet for 2022 was Artificial Intelligence and, above all, Artificial Intelligence transparently integrated into the different cloud services. During 2023, cloud providers will continue to increase their commitment to Artificial Intelligence, taking the functionalities it brings a little further and making it easier for companies and users who until now did not see a place for it in their processes or workloads to adopt it.
Artificial Intelligence applied to the field of cybersecurity will be another of the clear bets for 2023. Both AWS and Microsoft have presented services that apply Artificial Intelligence processes for data protection, such as: Protect Sensitive information in AWS Cloudwatch Logs, AWS Macie Automate Data Discovery or Azure Sentinel.
AI can also be a key factor in driving sustainability. For example, computer vision and satellite imagery are being used to prevent illegal fishing activity, deforestation and areas of increased fire risk.
There has been an exponential increase in the use of Low-Code platforms, which allow the development of applications with little or no knowledge of programming languages. Many of these platforms are provided through the cloud, helping to make them much more accessible since users do not have to worry about hosting and maintaining the infrastructure necessary for their use.
These tools are even available to create AI-driven applications. For example, a recently launched service is Microsoft AI Builder that provides AI templates on the Power Platform to optimize business processes without writing code. This service uses AI and Machine Learning to create applications in a much smarter and more effective way.
Another example is Microsoft’s Project Bonsai, a low-code artificial intelligence platform that helps with platform automation tasks.
Migrating to the cloud brings many benefits in terms of scalability, process optimization and costs, but it also brings increased security risk if workloads are not well designed. Security requirements for enterprises are increasingly demanding, so each company develops its own security mechanisms and protocols to ensure the security not only of its customers, but also of its employees and processes.
Cloud providers must not only implement their protection and security mechanisms, but they must also ensure that they are compatible with the security requirements and solutions implemented in the different companies. This is a key point in the adoption of the cloud by enterprises and is a point of focus for any cloud provider that wants enterprises (especially large enterprises) to migrate their systems and workloads to a 100% cloud environment.
The main cloud providers are already showing that during 2023 they will devote resources and efforts to expand their security services and their compatibility with the companies’ own services. An example of this is the new “External Key Store feature that AWS has introduced for one of its star services in the field of security, KMS.
Using security findings to generate remediation and prevention policies will be a key factor to exploit throughout 2023 and will allow companies to extract a greater return on the investment they make in cloud security. Cloud providers will be challenged to facilitate the collection, storage and exploitation of this sensitive information. AWS, for example, is preparing what it calls Security Lake, a data lake in which to centralize and structure all the security information collected by the different services so that it can be exploited centrally.
Industry has always been a sector that cloud providers have resisted, as they require very specific processes and services depending on the sector in which they operate. Until 2022, there has been no visible interest on the part of cloud providers to approach the industrial model and provide services that can help different businesses and attract a new market sector to the cloud world, which until now had not been exploited.
For example, AWS has introduced by the end of 2022 its Supply Chain service that provides services and tools for production models based on supply chains, such as ML applied to the production process, risk mitigation, cost reduction…
It seems that during 2023, the Industry sector will be a new business focus for cloud providers and it is likely that new services will be introduced or features will be added to existing services, which seek to enhance the offering towards the industrial world.
Making efficient use of cloud services not only implies obtaining maximum performance in architectures or being sustainable, it also implies being cost efficient. Cost efficiency involves carefully choosing the services and features to use in order to carry out a set of best practices that allow us to reduce the bill at the end of each month without prejudice to the performance and functionality of the solution being deployed. Providers such as AWS offer their own tools to track costs and data-driven predictions to try to infer future costs, so that deviations can be seen and alarms can be set.
To save costs is a fundamental pillar to strengthen the relationship between customers/companies and cloud providers. In this area, once a company has migrated all its workloads to the cloud and its business is primarily done in the cloud, the next step is to find a way to reduce costs. This way of reducing costs not only comes from applying good cost-saving practices by companies, but also from cloud providers offering more cost-efficient services and alternatives with a performance similar to the current one. This is the example presented by AWS for its Lambda service: Lambda SnapStart, offering higher performance at the same cost, which allows companies to increase the performance of their Lambda workloads without incurring higher costs.
Thanks to the global embrace of cloud technologies, many companies have embraced the subscription and pay-per-use model, changing the balance between CAPEX and OPEX. It has also evidenced the trend of consuming everything as a service, without having to worry about the best way to build, maintain and evolve an IT service. This is the origin of the term XaaS, which brings the following benefits:
- Cost-effectiveness: Cloud service models reduce costs and simplify IT implementations.
- Reduced infrastructure management: Using external services instead of deploying technology in IaaS greatly accelerates time-to-market and reduces system complexity.
- Technical support: the external provider’s staff provides, maintains, updates and troubleshoots the service. As a result, customers can reduce their own on-site support staff.
- Scalability: Services can be scaled up or down as business needs change.
But, as with all other consumption models, there are also some challenges:
- Internet resiliency and reliability: Dependence on the XaaS provider’s infrastructure; therefore, it is necessary to pay special attention to the SLAs of each provider to guarantee the service.
- Visibility: Little visibility and limited control over the service provider’s environment and infrastructure.
- Vendor lock-in: Customers depend on the service provider to provide consistent service. However, vendors can go out of business, be acquired, discontinue a service or change its features at any time.
- Security: If a vendor suffers a security breach, data from different users/customers can be compromised.
Points for improvement for the coming years
Within data architectures there are two points that we consider very important and should be given special attention: metadata and data lineage. During 2022 the main public cloud providers have made considerable progress in metadata management and governance, such as AWS with AWS DataZone, but there is still a notable lack when it comes to managing data lineage that does not require a third-party solution, such as Collibra.
Another point of improvement, which will be a major challenge for 2023, is to facilitate the governance and management of data lakes (Lake Houses), along with data sharing and integration of lakes with third-party sources (internal or external). Facilitating the creation of data products internally within an enterprise and sharing datasets among members of the organization is a feature that can be a point of differentiation. Providers such as AWS are starting to implement this type of solution with dedicated services such as AWS Data Exchange for Lake Formation.
- Azure Ignite: https://news.microsoft.com/ignite-2022-book-of-news/
- AWS Reinvent: https://aws.amazon.com/es/blogs/aws/top-announcements-of-aws-reinvent-2022/
- Wegner Wogels: https://www.allthingsdistributed.com/2022/12/tech-predictions-for-2023-and-beyond.html
- AWS Documentation: https://docs.aws.amazon.com
- Azure Documentation: https://learn.microsoft.com/en-us/azure