Faced with global economic uncertainty, leaders are rethinking their budgets and operations. Investments in technology – which have been increasing for several years, increasing costs – could be an attractive business category for slashers. However, the newly released Wasabi 2023 Global Cloud Storage Index reveals that organizations are not afraid to spend money on cloud storage.
According to Wasabi’s latest survey and report, 84% of those surveyed expect to increase their public cloud storage spending in the next year. They also plan to invest in IT initiatives such as infrastructure migration (56%), business initiatives such as digital transformation (45%), and new data security initiatives such as data backup and recovery (44%).
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As a follow-up to this report, TechRepublic spoke with Andrew Smith, senior manager of strategy and market intelligence at Wasabi, to learn more about the rationale behind these cloud investments, ROI and benefits, and how the cloud is adapting to meet IoT and edge computing demands. Additionally, Smith highlighted how new data storage technologies and approaches could support businesses as data generation reaches unprecedented levels.
Why companies continue to invest in public cloud
The global cloud migration is now well established, and digital acceleration efforts are well underway. Wasabi research shows that 89% of organizations moved data from on-premises storage to the public cloud last year. In addition, 70% of global enterprise storage capacity is now in public and dedicated clouds.
Wasabi commissioned the independent market research agency, Vanson Bourne, to conduct research for the Global Cloud Storage Index 2023. The study surveyed 1,000 IT decision makers across nine countries.
According to the report, businesses are leaving on-premise resources behind and scaling up to cloud computing in pursuit of greater infrastructure resilience and durability. The need for scale, the importance of accessing global regions and the desire to avoid buying expensive hardware were also listed as defining factors for the change. Core IT, application developers and external partners have the most significant impact on cloud budgets.
“The value of cloud infrastructure services remains high, especially as it relates to the ability of these services to drive digital transformation and modernization initiatives, mainly due to reasons such as immediate scale, access to new geographic regions and time faster to market,” said Smith. .
He explained that investment in public cloud is expected to increase as the amount of data that companies are storing in the public cloud increases.
Cloud challenges and return on investment
By moving to the cloud, companies can gain access to cutting-edge and constantly updated technologies. With automation, AI/ML, business intelligence apps and IoT platforms at the forefront of many businesses, modern cloud innovation is being leveraged to reduce costs and increase performance. Organizations are also turning to cloud computing technologies to deal with contemporary challenges such as supply chain disruptions, cyber security, compliance and governance, and environmental pressures.
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While cloud tools give companies a competitive advantage, the economic landscape and its impact on cloud storage budgets remains a concern for many companies. Wasabi research shows that while there is a willingness to invest in cloud storage, 52% of respondents exceeded the previous year’s budget.
“When it comes to return on investment, we expect increased scrutiny and risk aversion – especially for new customers considering adopting or purchasing a cloud infrastructure service,” said Smith. “Existing customers will be looking for efficiency improvements, especially those that can have an immediate impact on reducing their monthly bill. I think in 2023, there will be a slight reset of ROI timetables – especially for those enterprises that make a big migration to the cloud.”
Smith also explained that companies will want to take advantage of the initial advantages of the cloud in terms of cost and performance. However, they will need to accurately predict their three- to five-year ROI while streamlining and optimizing cloud use over time.
“In many cases, this long-term picture is difficult to understand and will be a point of increased emphasis this year as organizations take a harder look at the long-term value of their cloud purchases,” added Smith.
Trends shaping the public cloud sector
Multicloud investment is increasing rapidly as companies seek different solutions and specific features from their cloud environments. About 57% of the organizations surveyed use more than one public cloud storage provider. In addition, cyber security, compliance and governance are determining factors. Customer demand for secure, resilient cloud storage is having a significant impact on vendor selection.
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In addition, the rise of IoT, new endpoints and hybrid work environments – which require low connectivity and recently reliable connectivity – is driving the rise of edge computing. How is the cloud market working to meet the security and performance demands of these new trends?
“Cloud storage is an important part of the edge and IoT conversation,” explained Smith. “Higher performance, lower latency and instant distributed access to data are critical for these types of use cases. From a cloud storage perspective, it’s a fight against data gravity. We need to ensure that data can be moved to and from distributed edge locations and centralized regional locations securely, efficiently and cost-effectively.”
Data storage innovation and the future of the public cloud
The field of data is expected to grow by 300% in the next three years, and experts warn that there is now a global data crisis. In answering this question, Smith says that he plans to continue investing in data center facilities, supported by the development of increasingly efficient and compact storage media.
“Cloud service providers are in a unique position to leverage these facilities and denser storage media as effectively as possible,” said Smith. “Economically, the dollar per GB/TB of storage media has continued to decline, which is a good sign for those who think we’re facing a storage data crisis.”
Wasabi is also keeping an eye on innovative storage media solutions and believes they will play a role in the data crisis conversation.
“We’ve already seen significant investment in new types of storage media, such as DNA-based storage, silica-based storage and archival storage on ceramic plates,” Smith said.
The role of the enterprise in cloud data management
Not everything comes down to hardware innovation. According to Smith, enterprises also play an essential role in managing this data growth.
“The data sphere is huge and growing exponentially, but there’s no need to store all that data,” he said. “As enterprise storage strategies mature, they will evolve from a warehouse to a storage of everything effectively.”
By leveraging data management and lifecycle policies, organizations can place data on the most efficient storage layer available and effectively archive data when it is no longer needed by the organization.
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Innovation in data storage, new cloud features and technologies, and companies balancing technology budgets against value and performance are expected to continue to shape the cloud storage sector. The future of public clouds, even when hit by an economic slowdown, remains strong and resilient, as leading companies prove that many of the challenges and obstacles they face can be mitigated with cloud technology.
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