Three cloud trends to watch in 2022
Many developers and startups think of cloud services as just “compute”, “storage” and “networking”. The cloud has matured to the point where customers often don’t think about the underlying infrastructure, service levels, or debate the merits of on-premises versus cloud. Instead, they increasingly favor the cloud. In fact, December 2021 marked Amazon Web Services (AWS) for its tenth AWS re: Invent conference, the company’s annual conference for customers and partners.
While many startups are quick to focus their IT strategy on cloud and SaaS offerings, the company has been slower to embrace cloud computing at scale. The conversation for these companies revolves around security, compliance, SLAs, and loss of control over their technology stack. In many ways, the questions businesses ask about the cloud have not changed much.
Earlier this year, I reflected on various conversations I had with various IT and sales managers, digital CxOs, and vendors. Here are three trends that I will be following this year.
Alternative suppliers are gaining momentum
The “big three” hyperscalers continue to dominate the market and gain the attention of customers and partners. However, we are seeing growing interest in the alternative cloud market. The alternative market includes suppliers outside of the big names (AWS, Microsoft Azure, Google Cloud, Oracle, IBM and Salesforce). Developers and businesses are increasingly turning to alternative providers and their offerings because they are easier to use than hyperscalers, cheaper, and offer more predictable pricing models. Also, with the tight job market, hiring developers who are, for example, AWS certified can be extremely expensive. On the other hand, since alternative clouds are less complex, developers do not need to have the same certifications.
You might be wondering: what about global scalability, quantum computing, and / or the thousands of APIs offered by hyperscalers? The truth is, most small and medium-sized businesses don’t really need any of these capabilities and don’t want to help subsidize the R&D that these technologies require. Companies to watch in the alternative cloud market include Linode, Digital Ocean, OVHcloud, UpCloud, Hetzner, and Equinix Metal. In 2021, Techstrong Research published a report, DevOps and the alternative cloud, which explores these alternatives.
Industry-specific cloud ecosystems
Banks, insurance companies and companies in other highly regulated industries have been slow to embrace cloud computing. However, the market is changing rapidly and companies are rethinking their approach to the cloud. One of the reasons these regulated companies are starting to invest more in the cloud is because customers have heightened expectations of how they engage with companies. If customers aren’t happy, finding alternatives is easier than ever. These highly regulated businesses and industries are increasingly challenged by fintech, insurtech, healthcare tech, and other industry-focused startups.
Equally important, suppliers realize that one size does not fit all. Regulated industries need specific clouds that meet their regulatory and compliance needs. These industry-driven clouds are not designed as a complete ecosystem where a variety of technology partners can offer their software to regulated industries. Instead, vEndorsers have taken two different approaches to delivering industry specific offers. Some providers offer predefined but customizable applications. Here are some notable announcements in the area of banking clouds:
- Goldman Sachs and AWS work together to create data management and analytics solutions for financial services organizations (announced at re: Invent 2021). The result of this collaboration is the Goldman Sachs Financial Cloud for Data. It is not clear whether AWS will offer a more general financial services ecosystem in the future.
- IBM continues to develop its Cloud for Financial Services in terms of customers and signing partners. IBM built its cloud for financial services in collaboration with Bank of America, then hired the bank’s technical director, Howard Boville, to lead IBM’s hybrid cloud business.
- Microsoft announced the general availability of Microsoft Cloud for Financial Services in November 2021 (interestingly, it’s not called Azure for Financial Services). The company already has a strong presence in the financial services industry, and we will be monitoring the adoption of Microsoft Cloud for financial services closely. In September 2021, Wells Fargo unveiled its digital infrastructure strategy which relies heavily on its partnership with Microsoft, but there is no mention of Wells Fargo using the Microsoft cloud for financial services.
I expect other industry-specific clouds to follow a similar pattern, with major vendors partnering with key industry players to create cloud ecosystems that meet performance, security requirements. and industry compliance. For example, you can certainly imagine that Oracle creates a Cloud for Health Care after the acquisition of Cerner closes.
The software supply chain is a key to security
“Supply chain” was a key phrase across all industries and professional functions in 2021. I am particularly tracking the software supply chain which, as you can imagine, is huge and complex. Essentially, your software supply chain includes anything that could impact your software. This includes APIs, cloud services, containers, your DevOps pipeline, and any open source components you use. Software has many dependencies, and understanding the supply chain is essential to knowing your security and exposure to risk. Take, for example, the recent Apache Log4j vulnerability. Log4j usage is ubiquitous, but how many companies have been able to quickly identify risky software? Check out Alan Shimel’s blog post in December, Log4j: It’s all about the supply chain, baby! to learn more about software supply chain security. Additionally, API security will be a hot topic in 2022.
However, people remain the number one threat in cybersecurity. While complex cyber attacks by ransomware gangs and state-sponsored actors are gaining attention, poor cloud configurations and unpatched software are probably your biggest threats. Understanding your software supply chain will help uncover potential weak spots and allow you to add automation, observability, and / or other security tools to help you spot potential issues.
The evolution of the cloud
While the cloud is nothing new, the cloud market is continually evolving. While the developer community has quickly embraced cloud computing, large corporations have fallen behind and regulated industries have been even slower. The alternative cloud market offers different options for developers and businesses who don’t want the complexities of hyperscalers and don’t need their endless options and global footprint. At the same time, regulated industries are changing their cloud strategies with cloud offerings focused solely on the challenges of their industry. Finally, you need to keep your software and data secure, no matter where they are. By focusing on your software supply chain, you will be sure that you can react to security vulnerabilities and update items as needed.