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The Future Is Cloudy

Everything digital—and almost every resource—is now floating in the cloud. Consumer and business apps are resident in the cloud, data is at home in the cloud, and even AI (artificial intelligence) chatbots are roaming the cloud, looking for answers. The cloud is getting crowded!

Since the cloud has become so important, it’s a good idea to know what it is. According to one of the major players, AWS (Amazon Web Services), cloud computing is the on-demand delivery of IT resources over the internet with pay-as-you-go pricing. Instead of buying, owning, and maintaining physical data centers, servers, and applications, you can access technology services, such as computing power, storage, and databases, on an as-needed basis from cloud providers—like AWS, of course.

In the earliest days of commercial computing, large mainframe systems acted as the central processor and networked terminals as the clients. Speed was—well, let’s say it was adequate if the clients were on T-1 lines and not on 128kb dial-up modems. And the mainframe owner, often IBM, charged by the time the resources were used—timeshare computing. With the arrival of minicomputers, the power was distributed locally—terminals connected directly to the computer.

Cloud computing is based on the notion that computing does not need to be on the customer’s premise, nor does it have to be in any particular location. In fact, the entire rationale for computing in the cloud is that computational capabilities may reside in the ether, so-to-speak, and accessed when needed as Mind Commerce reminds us. This has led to much greater computing asset utilization and, therefore, optimization of capital expenditures for those investing in computing assets, and scalable operational expenses for computing customers.

Cloud computing business models have led to the “as a service” delivery model, which has proven to be a highly flexible and scalable method for introducing and growing computational needs for enterprise. In other words, the cloud is ultimately scalable so long as your provider has the resources to keep adding servers—and the electricity needed to run them.

What Makes up The Cloud

Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources—networks, servers, storage, applications, and services—that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and, the NIST (National Institute of Standards and Technology) notes, is composed of five essential characteristics:

There are also three service models—cloud SaaS (software as a service), cloud PaaS (platform as a service), cloud IaaS (infrastructure as a service)—and four deployment models: private cloud, community cloud, public cloud, hybrid cloud. Key enabling technologies include fast wide-area networks, powerful, inexpensive server computers, and high-performance virtualization for commodity hardware. 

Cloud providers market it on the promise of massive cost savings combined with increased IT agility. And while they say it is critical that government and industry begin adoption of this technology in response to difficult economic constraints, cloud computing technology presents challenges to many traditional approaches to datacenter and enterprise application design and management. The cloud also has security, interoperability, and portability barriers to broader adoption.  

Breaking Barriers

Despite this, the trend is to move everything digital into the cloud. Grandview Research, for example, predicts theglobal cloud computing market to reach more than $1.554 trillion by 2030, registering a CAGR (compound annual growth rate) of 14.1% from 2023-2030. The main factors driving the market growth include the rising adoption of cloud-native applications by several business sectors, such as banking and supply chain automation.

Increased adoption of advanced technologies, such as AI (artificial intelligence), ML (machine learning), and 5G networks, and their rapid implementation within business applications, is anticipated to drive market growth. Since the COVID-19 outbreak, technological advancements have accelerated rapidly and companies found that, with remote working moving from necessary to preferred, they can now efficiently store, access, and manage vital data through cloud computing.

With the increasing use of smartphones, computers, and the internet, businesses need to store and process enormous amounts of data to provide their employees, consumers, and clients with services centered on their needs. Machine learning, edge computing, and personalization currently are significant trends across several businesses sectors.

While all segments of the market are expanding to the cloud, some functions are doing so more rapidly than others. The infrastructure as a service segment is expected to register the highest CAGR from 2023-2030 due to the increasing adoption fueled by the growing need to simplify IT complexities, find qualified workers to manage IT infrastructures, and lower the cost of deploying data centers.

By size of company, the small- and medium-sized business segment is expected to grow at the highest CAGR from 2023-2030 due to lower prices for IT software and hardware, increased processing power and storage elasticity, and increased mobility in accessing data and services. Over the forecast period, the industry growth is likely to be driven by the rising usage of cloud technology across SMEs (small and medium enterprises) in developing regions.

Clouds Down to Earth

Of course, the cloud requires computers, lots of computers. And computers at that level demand their own “homes.”The global data center construction market size, again as determined by Grandview Research, is anticipated to reach $371.87 billion by 2030, expanding at a CAGR of 7.4% from 2023-2030. The growth is fueled by the growing trend of cloud computing and virtualization, along with the rise in digital transformation and increasing demand for data storage and processing capabilities needed for increased use of big data analytics. Other significant factors driving the data center construction market growth include rising investment in infrastructure projects, increasing government spending on information technology, and greater demand from the commercial sector.

The increased construction of hyper-scale data centers throughout the world to store large amounts of data is creating a lucrative opportunity for industry participants. Hyper-scale data centers are used in a variety of industries to enhance computing power, memory, networking infrastructure, and storage resources. The physical infrastructure and distribution systems supporting the data centers for optimizing cooling efficiency, and the capacity to extensively scale computing workloads effectively, are among the different elements of hyper-scale data centers.

The increasing adoption of big data, AI, and ML, along with cloud platforms, is driving the growth of the cloud infrastructure market. As more businesses shift towards digital transformation, there is a growing need for reliable and scalable cloud infrastructure solutions to manage and store large amounts of data. Data security and privacy concerns are becoming increasingly important for businesses and the cloud infrastructure market offers advanced security features, including data encryption, multi-factor authentication, and access controls, making it an attractive option for companies looking to secure their data.

The result is that the global cloud infrastructure market is expected to climb at a CAGR of 18.1% from 2023-2030, according to Verified Market Research. Adding to that the market was valued at $241.9 billion in 2021 and is projected to hit $1.083 trillion by the end of 2030. Indeed, the cloud infrastructure market is expected to witness significant growth in the coming years, driven by the increasing adoption and importance of big data, AI, ML, cloud platforms, and data security and privacy. As businesses continue to rely on cloud infrastructure solutions to manage their data and digital assets, the market is likely to expand at a rapid pace.

But as an IT guru once noted, putting all your resources in the cloud is just another way to say you’re putting them all on someone else’s computer. Maintain caution in how much and what data you have in the cloud and backup proprietary data—just in case.

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