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From rapidly transforming consumer behaviors to heavily affecting economies around the globe, the Covid-19 pandemic has created a plethora of challenges and continues to have a multi-sector impact on nations and citizens alike.
With the arrival of vaccinations, 2021 seems to bring a new ray of hope for economies worldwide but the fact remains: This year is going to witness the ‘survival of the fittest,’ implying that businesses that turn digital and adapt to the ‘new normal’ are likely to emerge out of the Covid-19 crisis in better position to succeed.
To begin with, cloud computing is arguably going to remain the staple of leading companies. To give a quick run-through, cloud spending grew by 37% in the first quarter of 2020 itself – ushering in a new era of digitization wherein companies look at cloud computing as the most robust way to tide themselves over during the Covid-19 challenge – at this time last year the world had just woken up to the viral effect of the novel Corona virus beyond China. Capitalizing upon the urgency to drive processes remotely and securely, cloud service providers had an unlikely successful year.
Even as total IT spending dropped by 8%, the cloud market grew substantially. Having worked on a number of cloud implementations, I pick the following three key trends in the post-Covid era.
Increasing preference for OpEx over CapEx cost models
Cost optimization was always a priority before the pandemic. However, disruptions afterward have further elevated its stature in the priority stack. Today, start-ups and enterprises are seeking intelligence to deploy flexible cost models, particularly those in pay-as-you-go services. As expected, the OpEx versus CapEx solutions debate has once again intensified.
In the pursuit of normalization, controlled costing is the first step. With OpEx, businesses can get the total of their costing parameters while achieving scalability with products & services. PwC, in its latest survey, found that 75% of finance decision-makers use OpEx cost modeling and are deferring CapEx for at least another year.
Cloud ecosystems assure total flexibility and scalability in developing and managing key enterprise processes. Using OpEx as a cost model and cloud as a deployment model, enterprises can:
- Achieve faster installations, upgrades, and on-demand flexibility. Given the lesser time of approval in OpEx, businesses can leverage frequent product upgrades.
- Cloud systems mean negligible maintenance hassles and site visiting. The OpEx model allows for seeking cloud hosting services that cover uninterrupted networking infrastructure and enterprise-grade security.
Entities, both government and private, are likely to upscale their infrastructure capacity in 2021. At the same time, they want to keep costs in control. Therefore, hybrid cloud systems backed by OpEx cost models will set the narrative for data storage and monitoring.
Rise of native clouds – containerization and serverless computing
In order to recover from the pandemic hangover, MSPs – Managed Service Providers, would want to enhance their Customer Experience (CX) quotient while keeping costs in check; exactly what native cloud computing delivers. Native cloud technologies through containerization empower digital transformation strategies for enterprises across the spectrum. Since Azure, AWS and Google Cloud have raised the green flags, at least 60% of service providers will offer containerization on public cloud platforms.
At their core, container management repositories perform workload transportation between multiple verticals such as on-premise, edge, and the cloud. Subsequently, platforms like Kubernetes, that lessen the complexity in container management, should gain explosive acceptance in 2021-22. In addition, serverless computing that was among the top five Platform-as-a-Service (PaaS) cloud services in 2020, is still likely to be a preferred paradigm for multi-cloud developments.
Edge computing gaining the edge
To put it simply, edge computing brings storage and processing closer to the geographic location of data consumption. Besides ensuring faster response times, it saves bandwidth (and infrastructure) while empowering the service providers to serve their customers locally.
There’s no doubt that Edge computing will grow stronger in 2021. Cloud service providers will experiment with new business models beyond humongous data centers and central control of public clouds. Nonetheless, it still seeks the innovation of computing in traditional clouds while enhancing business agility. Edge computing allows enterprises to improvise upon their real-time analytics and make smarter business decisions. Since predictive analysis in CRM and other ERP verticals is growing, edge computing will have a greater role in the process.
Per IDC research, by 2024 25% of organizations will look forward to using cases that integrate edge data with apps already hosted in the cloud. 2021 will also see a series of partnerships between traditional cloud and edge computing service providers. Also, telecom service providers will have a key role in driving these hybrid ecosystems.
Going forward, devices and applications closer to the consumer’s location will play an important role in the larger fabric of the Internet of Things (IoT) and hybrid cloud models.
Opportunity is in the eyes of the beholder
The cloud was already a dominating force. The pandemic only proved that most enterprise processes can be managed remotely if the right cloud implementation is backing them. Therefore, it is not incorrect to believe that cloud service providers are sitting on a gold mine of opportunity.