Faced with global economic uncertainty, leaders are rethinking their budgets and operations. Investments in technology — which have been on the rise for the past several years, inflating expenses — may seem an attractive business category for slashes. However, the newly released Wasabi 2023 Global Cloud Index Storage 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 like infrastructure migration (56%), business initiatives like digital transformation (45%), and new data security initiatives like backup and data recovery (44%).
SEE: Cloud data storage policy (TechRepublic Premium)
As a follow-up to this report, TechRepublic spoke to Andrew Smith, senior manager of strategy and market intelligence at Wasabi, to learn more about the reasoning 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 unseen levels.
Why companies continue to invest in public cloud
The global cloud migration is now well established, and digital acceleration efforts are in full swing. Wasabi’s research reveals that 89% of organizations migrated data from on-premises storage to the public cloud last year. Additionally, 70% of enterprises’ global storage capacity is now in public and dedicated clouds.
Wasabi commissioned the independent market research agency, Vanson Bourne, to conduct research for the 2023 Global Cloud Storage Index. The study surveyed 1,000 IT decision-makers across nine countries.
According to the report, businesses are leaving behind on-premises resources and leveling up cloud computing in search of better infrastructure resilience and durability. The need to scale, the importance of accessing global regions and the desire to avoid costly hardware purchases were also listed as defining factors for the switch. Central IT, application developers and external partners have the most significant influence on cloud budgets.
“The value of cloud infrastructure services remains high, especially as it relates to the ability of these services to fuel digital transformation and modernization initiatives, primarily because of reasons like instant scale, access to new geographic regions and quicker time to market,” Smith said.
He went on to explain that investment in public cloud is expected to rise as the amount of data companies store in the public cloud increases.
Cloud challenges and return on investment
By migrating to the cloud, companies can access cutting-edge and constantly updated technologies. With automation, AI/ML, business intelligence apps and IoT platforms at the forefront for many businesses, modern cloud innovation is being leveraged to cut costs and increase performance. Organizations are also turning to cloud technologies to deal with contemporary challenges like supply chain disruptions, cybersecurity, compliance and governance, and environmental pressures.
SEE: Top 5 benefits of applying ESG standards to your business (TechRepublic)
While cloud tools give companies a competitive edge, the economic landscape and how it impacts cloud storage budgets is still a concern for many companies. Wasabi’s research indicates that although there is a willingness to invest in cloud storage, 52% of respondents exceeded their previous year’s budget.
“When it comes to return on investment, we expect there to be heightened scrutiny and risk aversion — especially for new customers considering adoption or purchase of a cloud infrastructure service,” Smith said. “Existing customers will seek efficiency improvements, particularly ones that can have an immediate impact on reducing their monthly bill. I think in 2023, there will be a slight reset on ROI timetables — especially for those enterprises executing a large migration to the cloud.”
Smith also explained that companies will want to reap the initial benefits of the cloud in terms of cost and performance. Still, they will need to accurately forecast their three-to-five-year ROI as they streamline and optimize cloud usage over time.
“In many cases, understanding this long-term picture is the hard part and will be an increasing point of emphasis this year as organizations take a harder look at the long-term value of their cloud purchase,” Smith added.
Trends shaping the public cloud sector
Multicloud investment is quickly going up as companies seek diverse solutions and specific features from their cloud environments. Some 57% of organizations surveyed use more than one public cloud storage provider. Additionally, cybersecurity, compliance and governance are decisive factors. Customers’ demand for secure, resilient cloud storage is having a significant impact on vendor selection.
SEE: Hiring Kit: Cloud Engineer (TechRepublic Premium)
Additionally, the rise of IoT, new endpoints and hybrid work environments — which require low latency and reliable connectivity — are driving an increase in 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,” Smith explained. “Higher performance, lower latency and instant distributed access to data are key to these types of use cases. From a cloud storage perspective, it’s a fight against data gravity. We need to ensure 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 public cloud
The datasphere is expected to grow 300% in the next three years, and experts warn that the world is now experiencing a data crisis. Responding to this issue, Smith says he envisions continued investment in data center facilities, supported by the development of increasingly efficient and dense storage media.
“Cloud service providers are uniquely positioned to leverage these facilities and the more dense storage media as efficiently as possible,” Smith said. “From an economics perspective, we’ve continuously seen the dollar per GB/TB of storage media decline, which is a good sign for those thinking we’re in 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 novel storage media types, such as DNA-based storage, silica-based storage and archival storage on ceramic plates,” Smith said.
The enterprise’s role in cloud data management
Not everything falls on hardware innovation. According to Smith, enterprises also have an essential role in managing this data growth.
“The datasphere is massive and growing exponentially, but not all that data needs to be stored,” he said. “As enterprise storage strategies mature, they are going to evolve from a position of store everything to a position of store everything efficiently.”
By leveraging data management and lifecycle policies, organizations can place data on the most efficient tier of storage available and effectively archive data when it is no longer needed by the organization.
SEE: Cloud data warehouse guide and checklist (TechRepublic Premium)
Innovation in data storage, new cloud features and technologies, and companies balancing technology budgets against value and performance are expected to continue shaping the cloud storage sector. The future of public clouds, even when affected by an economic slowdown, remains strong and resilient, as leading companies prove that many of the challenges and roadblocks they face can be mitigated with cloud technology.
Read next: Top cloud and application migration tools (TechRepublic)
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