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Gartner’s 7 predictions for cloud computing in Australia and around the world

With Gartner predicting that cloud computing will account for 70 per cent of global enterprise workloads by 2028, up from around 25 per cent today, issues such as sustainability, AI computing and data sovereignty will play a bigger role in how Australian businesses use and procure cloud providers.

Leading cloud computing analyst Dennis Smith told Australian cloud computing executives at the Gartner IT Infrastructure, Operations and Cloud Strategy Conference in Sydney that cloud computing has moved from being a technology disruptor to a business disruptor and is becoming a business necessity.

“If you don’t have a solid cloud strategy and you’re not executing on it, there are a lot of risks to your business,” he said. “We’ve moved beyond just being something you dabble in to really need to be part of your larger IT strategy.”

Gartner’s seven predictions for cloud computing trends in Australia and around the world through 2028 are:

  • By 2028, more than half of current multi-cloud initiatives will fail to deliver value.
  • Cloud-native platforms will become the de facto way to implement new applications.
  • By 2028, cloud modernization will result in 70% of workloads being completed in cloud environments.
  • More than half of cloud-based organizations will use industry clouds.
  • Multinational companies need to develop a digital sovereignty strategy by 2028.
  • Sustainability will become one of the top five purchasing criteria for cloud vendors.
  • By 2028, AI and machine learning will account for 50% of cloud computing.

In other research released in conjunction with the Australian Cloud Conference, Gartner predicts that Australian companies will spend A$23.3 billion ($15.4 billion) on public cloud by 2024, up 19.7% from 2023. Software-as-a-service spending will continue to be the largest category, growing 18.3% to A$11 billion ($7.2 billion) by 2023.

1. By 2028, more than half of current multi-cloud initiatives will fail to deliver value

Smith said multi-cloud strategies are top of the agenda for customers in 2024. However, while multi-cloud is not inherently a bad strategy, by 2028, 50% or more of organizations will not get the value they seek, often because “they’re not always implementing multi-cloud for the right reasons.”

Multi-cloud doesn’t always provide portability or elasticity if the applications themselves aren’t architected and coded for those benefits, Smith said. Multi-cloud may not be cheaper if customers have less of a price advantage with a cloud vendor or need to spend money on talent and tools to manage the environment.

2. Cloud-native platforms will become the de facto way to implement new applications

Gartner believes that by 2028, cloud-native platforms will become the default platforms for building new applications, whether in the public cloud, on-premises or in hybrid environments. Smith describes cloud-native as these platforms “enabling developers to get started quickly and develop code faster.”

“Imagine the ability to build applications that are scalable, instrumented, have a nice tight CI/CD (continuous integration and deployment) pipeline that do some serverless functionality. Maybe a managed Kubernetes product or something else would make it easier for me as a developer to write that application,” he said.

3. Cloud modernization will see 70% of Australian and global workloads migrate to cloud environments by 2028

Gartner says the focus on modernization by enterprises and cloud providers, along with emerging AI tools for modernization (such as tools for discovering legacy systems or refactoring annotations), will lead to a dramatic shift in the percentage of workloads in the cloud, from 25% to 70%.

Check out: Top five benefits of cloud computing.

Australian research firm ADAPT found that highly modernized Australian organizations have moved 67% of their workloads to the public cloud, and predicts that by 2025, 55% of workloads overall will be in the public cloud, with large organizations in particular more committed to cloud strategies. Hyperscalers such as Microsoft have been investing in new cloud capacity.

The chart shows that by 2025, Australian organisations are expected to move 55% of their workloads to the public cloud.
Australian businesses are expected to move 55% of their workloads to the public cloud by 2025. Image credit: ADAPT Research

“The rest will be in your existing data centers and so on. A key takeaway is that the future for most of you is going to be hybrid, so ultimately plan for that.” Smith added that the blanket notion of organizations moving everything to the cloud without vetting applications is not the right path.

4. More than half of organizations will use industry cloud platforms to accelerate development

Gartner says that by 2028, enterprises will have a 50% or higher probability of using industry cloud platforms. Smith describes industry cloud as a combination of infrastructure platforms and SaaS products that enable companies to launch initiatives in industries such as manufacturing or retail.

“There are many vendors in this space, including hyperscalers. So ultimately you have to expect this, especially if you’re looking to gain a competitive advantage in your respective industry,” he told delegates at the Gartner conference.

5. By 2028, digital sovereignty issues will require multinational companies to develop strategies

Gartner believes that by 2028, multinational companies where Australian cloud professionals work will need to have strategies around digital sovereignty. These strategies will aim to have more control over a country’s technology, data or operations, or even cut off the technology in some way.

“This is an area of ​​great concern for a lot of my customers in certain parts of the world, who may be in various countries and frankly are a little hesitant to use a cloud provider across the ocean or may be concerned that there may be some national issues that cause connectivity to be disrupted,” Smith elaborated.

Australia’s own reliance on US and Chinese technology has come under scrutiny, with the government admitting its reliance on three US hyperscale cloud companies and finding itself in a bind when Microsoft pulled out of a project that would have provided Australia with sovereign “top secret” cloud services.

6. Sustainability will become one of the top five purchasing criteria for cloud vendors

Gartner estimates that one in four organizations already require sustainability information as part of the cloud vendor procurement process, particularly in the past three years. Smith says that number will at least double in the next four years to become one of the top five criteria.

In 2024, Australia released draft legislation that will introduce mandatory climate-related reporting. These will require large companies with more than 500 employees, revenues of more than AUD500 million (USD331 million) or assets of more than AUD5 billion (USD3.3 billion) to submit reports from the 2024/25 financial year, with medium and small companies to submit reports in the following two financial years.

Smith noted that some cloud providers already have to build data centers in neighboring countries if a jurisdiction has energy consumption restrictions. In the near future, he said, enterprises will demand more transparency from providers and will need to pay attention to the energy consumption of their own data centers.

7. Artificial intelligence and machine learning will account for 50% of cloud computing resource usage

Currently, about 10% of cloud computing resources are used for AI and machine learning, but that share will grow fivefold, even though other activities will not decrease. Smith said the industry will go from a “medium pizza to a large pizza,” with 50% dedicated to AI and machine learning.

Michael Warrilow, VP analyst at Gartner, said generative AI is becoming a key driver and differentiator for future cloud demand. “Australian CIOs must determine the adoption model that best suits their needs, whether that’s building a model from scratch or focusing on integrating AI capabilities into the applications they purchase.”

Notes to Editors: TechRepublic remotely covered the Gartner IT Infrastructure, Operations and Cloud Strategy Conference.

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