Cloud Computing

AI to fuel the next wave of cloud growth

After a brief slowdown last year, companies are once again dialing up cloud deployment, driven by demands for more rigorous security and the need for a scalable foundation to support the expected groundswell of AI innovation

The pandemic-era march to the cloud— accelerated to cater to an increasingly remote and dispersed workforce— retreated slightly last year as companies absorbed existing investments and grappled with lingering cost management and security issues.

Now with AI, and more recently Generative AI (GenAI), pilot projects poised for enterprise scale, companies are back in expansion mode, migrating existing applications and creating new cloud-native solutions built around data and advanced analytics. Those are the topline takeaways from the 2024 Cloud Computing Survey from Foundry, which canvassed 821 IT decision-makers involved in the purchasing process for cloud computing and whose organizations have, or plan to have, at least one application or a portion of their infrastructure in the cloud.

The 2024 Cloud Computing Survey by Foundry was conducted to measure cloud computing trends among technology decision-makers including: usage and plans across various cloud service and deployment models, investments, business drivers and impact on business strategy and plans.

According to the survey, 63% of respondents have accelerated cloud migration over the last 12 months, up 6% from last year and back to the pace of migration in 2022. Nearly three quarters (70%) of respondents confirm their organizations are defaulting to cloud-based services when upgrading or purchasing new technology capabilities, more so than last year (65%) and significantly higher than the 57% in the 2022 survey.

FSI Leading the shift

Companies in the financial services and healthcare sectors are embracing the shift more readily, both at 72%, as are firms with over 1,000 employees (70%). APAC companies joined the camp of those fast-tracking cloud migration (66%) compared to only 60% of North American respondents. Companies are ratcheting up cloud investments to serve a variety of business objectives.

With momentum building around AI, moving to the cloud is viewed to improve security and governance (34%), bolster scalability (33%), and accelerate adoption of those critical technologies, especially AI and machine learning (29%). Government and nonprofit entities were more likely to see cloud migration as a conduit to better security and governance (53%) while companies in the healthcare space associate the cloud with a scalability advantage (46%)

Business continuity/disaster recovery and replacement of on-premises legacy technology—both cited as the primary drivers of cloud investments last year for 40% of respondents—fell much further down the priority list. Twenty-nine percent of respondents to this year’s survey tied cloud migration to legacy updates while enabling disaster recovery and business continuity was a leading factor for only 26% of respondents. The one exception was government and non-profit entities where 46% cited legacy updates as a lever for cloud migration and 33% for reasons related to resiliency and business continuity.

The Future Outlook

Over the next 12 months, 64% of respondents plan to channel resources to fund AI and machine learning (PaaS) with SaaS-based business applications at 63% and analytics and BI (PaaS) at 46%. Companies in the high-tech space were more likely to earmark dollars for AI and machine learning PaaS investments (71%) while healthcare companies stood apart from other industries with their heightened investment in SaaS business applications, at 80%, and analytics and BI PaaS (59%).

Respondents in EMEA and APAC were more apt to tie cloud investments to AI/ML, at 70% and 69% respectively. North American players funnelled more investment dollars to SaaS-based business applications (68%)

With the potential and promise of AI looming large, enterprises are expanding their cloud budgets and footprints in earnest, looking to tap into the model’s wealth of scalability, security, and rich tool ecosystem advantages. While challenges remain, especially on the cost management and skills front, cloud computing is shaping up to play a central role in the next chapter of AI-enabled digital innovation.

Highlights: 2024 Cloud Computing Survey from Foundry

What’s driving cloud computing initiatives?

• Improving security and/or governance

• Improving scalability

• Accelerating adoption of new technology (AI/ML, etc.)

• Replacing on-premises legacy technology

• Improving employee productivity

 How are organizations using AI in the cloud?

• Data and analytics (53%)

• Generative AI (52%)

• Machine learning (44%)

• Predictive analytics (41%)

• Natural language processing (28%)

 Obstacles for Cloud Adoption

- 90% of ITDMs have experienced some obstacles with their cloud adoption over the past 12 months, such as:

• Budget/cost

• Security and/or compliance concerns

• Integration/migration challenges

• Skills gaps

• Performance and reliability

• Internal resistance

 Acceleration to Cloud : Key Facts

- 63% have accelerated cloud migration in the last 12 months from 57% in 2023 survey

- 70% say their org is defaulting to cloud-based services when upgrading or purchasing new technical capabilities, from 65% in 2023 and 57% in 2022

- 60% agree that they understand their cloud provider’s roadmap for integrating AI tools in their platforms

- The cloud-based services that organizations are investing in over the next year and AI/machine learning (PaaS) 64% and Business applications (SaaS) 63%

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