Industry executives and experts share their predictions for 2024. Read them in this 16th annual VMblog.com series exclusive.
Cloud, channel, the future of the Internet
By Joe Morgan, VP Cloud, Virtuozzo
One prediction that isn’t hard to make right now is that every 2024 prediction will be about AI. While there is a lot of focus on generative AI, one area that will probably grow is AIops – that is, using machine learning and AI models to optimize the performance and efficiency of cloud infrastructure.
The current economic, energy and hardware availability situation is going to make it essential for companies to find new ways to improve the efficiency of their infrastructure, and AI is likely to become invaluable for optimizing complex, unpredictable traffic and usage patterns. Some cloud providers/infrastructure providers have taken baby steps to exploring this use case, but I think this will become much more mainstream in 2024.
Future of the Internet
Aside from AI – which seems to be THE biggest thing right now – there’s one thing that not enough people are paying attention to. Just a little thing. It’s the future of the Internet, and 2024 is going to be a critical year for that future.
Gartner estimates that about 83% of the cloud infrastructure market is owned by three companies. The so-called “hyperscale” clouds: AWS, Microsoft Azure, Google Cloud. This is not healthy. In fact it’s actively bad for the industry, the end user and business overall. It’s bad for choice. It’s bad for innovation. This consolidation is killing the industry. Will this change in 2024?
Increasing oversight
Well, in the US, the FTC has been increasing its focus on Amazon’s cloud as well as retail activities. The UK has started looking closely at possible AWS monopolistic practices in the local cloud market. India too has been looking at the impact of the “big three” in the same monopolistic terms. This year, Google even raised anti-competitive complaints against Microsoft. It’s a little ironic when big tech complains about other big tech, when the real problem is not about which enormous corporate will dominate the cloud market, but the fact that any one, two or three companies will dominate the cloud market.
There are many reasons why the world needs independent infrastructure providers, and independent cloud providers. Compliance and the need for data sovereignty are only going to get more stringent in 2024, and from that standpoint, organizations will need to keep building local infrastructure and local providers into their IT strategy.
From a commercial and end user perspective, competition is healthy for innovation and for optimizing the delivery of services and support at a fair price point. Going back to the hot topic of the moment, emergent technologies like AI will require distributed, highly localized infrastructure. And of course, at the most fundamental level, distributed infrastructure is what the Internet is supposed to be all about. Choice, not monopolies.
Channel enabling choice
However, is that really happening? Will we see any real change in 2024? I think there is change, and there will continue to be change, but it’s incremental and actually being driven at a grassroots level, and by the channel – which is kind of hard to detect. There is still huge growth in cloud adoption among smaller businesses, who are still often moving into cloud IT for the first time. This is primarily being enabled by the channel, the local MSP, and so flies under the radar of any but the most ardently channel-focused media and analysts. However, this is where change will happen.
Why? Because, while there isn’t exactly a global backlash against the large providers – yet – there is a growing realization and need in all businesses to take a very close look at expenditure in an economy that still encourages no wasted spend. At the same time, there is a growing awareness of the need for localized, low latency, sovereign cloud solutions; and for small businesses, a general requirement to turn to hands-on, relationship-based MSPs who can take care of it on their behalf – not the somewhat faceless global providers and their enterprise-focused clouds – and to optimize IT spend in today’s high-inflation, high energy cost economy.
I think it’s going to be another tricky year, but with eyes open to better solutions – and at Virtuozzo this is what we’re trying to build – smaller service providers are going see growth by enabling smaller businesses with cloud that actually gives them choice.
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ABOUT THE AUTHOR
Joe Morgan, VP of Cloud at Virtuozzo
Joe has more than 20 years’ experience running hosting, cloud and MSP businesses. As VP of Cloud he’s creating the next generation of Virtuozzo solutions that will enable MSPs and CSPs to offer more flexible, cost-effective and profitable clouds of their own.
