Every year certain technology trends stand out. Few bring about as much change across both technology and business operations as much as AI has in 2024. AI has altered the way organizations consider cloud, driving new business and cloud requirements and introducing new use cases. The hype around AI has also created a sense of agency around change.
IDC’s quarterly Cloud Pulse survey (which surveys up to 1,700 cloud buyers each quarter) and the Cloud Adoption Trends and Strategies programs at IDC have been carefully tracking the maturation of cloud. Through surveys and industry conversations, our teams have been gauging the shifts in requirements of cloud buyers. These are the ten standout cloud trends from 2024 that vendors need to be aware of as they look to meet cloud buyer needs in 2025.
Cloud Transformation
With so many organizations looking to modernize and change their cloud, services around cloud migration, integration, and assessment were in high demand. Equally high was the focus on cloud transformation initiatives (many of which come bundled under broader IT transformation projects).
Around 60% of cloud buyers told IDC’s 3Q24 Cloud Pulse Survey October 2024 that their business’ IT or digital infrastructure currently requires major transformation, and 82% said their cloud also required modernization. Hence, 2024 has been a pivotal year for identifying where cloud strategies need to mature or change. The introduction of new AI requirements has added time pressures to the job at hand.
Business Goals Are Now Technology Goals
Cloud transformation may have been an initiative desired by cloud teams in 2023, but it became a driver of the business in 2024 as organizations pivoted to become more digitally – and AI – enabled. Organizations are now thinking like digital businesses, and this is rapidly changing what they require of technology and how they measure tech success.
In 2024, for the first time ever, when asked what their business’ goals were, Cloud Pulse respondents said overwhelmingly the top goals were focused on AI: using AI to drive better analytics; to improve customer experience and to drive better sales. AI is being introduced across most businesses today, and its introduction and close tie to business success means the business is now starting to measure AI and technical projects based on business key performance indicators. Line of Business has also started to have more of a say over cloud adoption decisions. This focus on business performance means that IT teams now need to be ready to pivot themselves as the business environments and requirements change and must have easily understandable reporting tools.
Automate To Overcome Management and Skills Challenges
Cloud is complex. Cloud management is even more complex as organizations adopt hybrid and multicloud strategies. The challenge to fill much-needed roles and retain staff in a highly competitive technology market is another challenge (not unique to cloud). As organizations seek to modernize cloud architectures and adopt AI, they are requiring better cloud management and new skills. This adds load onto already squeezed teams and budgets.
The skills that are most lacking right now (FinOps, containers, and serverless) cover areas that are being addressed in cloud transformation initiatives. Other areas where skills will impact cloud transformation include network automation and cloud orchestration. Many organizations are addressing skills gaps with educational projects (often with a focus on cross training and enhancing DevOps) or turning to professional services. Teams are also being trained in automation, which can drive efficiencies by removing repetitive manual tasks from operations and other teams to free up human resources and reduce costs.
Hybrid and Multicloud Capabilities Are Now Expected
Most cloud buyers will be working with more than one provider, and many are already combining the use of different cloud platforms. In Q3, 2024, 88% of cloud buyers told IDC Cloud Pulse they are deploying a hybrid cloud or are in the process of operating one and 79% are already using multiple cloud providers (this increases to 90% for those most familiar with cloud).
The challenge for many of these organizations is not one of desire to operate across environments and providers but finding vendors that offer true hybrid and multicloud capabilities. Organizations struggle still with interoperability and connectivity. This includes not only the network and challenges such as egress fees but also open APIs, thus requiring contracts that enable the right levels of flexibility. Vendors are starting to address these needs, and the outcome in 2024 has been more dynamic movement of applications or workloads between environments with organizations considering what is the best location for performance and cost.
Advancements in real-time management and monitoring tools will enable more dynamic use across platforms and lead to an increasing focus on edge computing needs. The good news is that hybrid cloud buyers are seen to have very clear advantages over those that have not adopted hybrid cloud: better ROI and faster adoption of new technologies to name a few.
Application Migration (And Repatriation) Becomes More Dynamic
This trend could have also been labelled ‘the resurgence of on-premises environments’ if we only considered the headlines around dedicated cloud use for GenAI requirements. This is not only about GenAI. Organizations are taking more of a right-fit approach to where applications/workloads and data needs to reside, and at varying parts of the application lifecycle. This is especially the case for AI workloads. Dedicated cloud is an important part of this equation for many cloud buyers, but requirements for application migration are as dynamic and diverse as application migration trends.
The biggest migration taking place in 2024 is the shift from traditional environments to cloud. The reasons for migration have shifted as well; in 2024, sustainability and GenAI were new influencers impacting migration trends, on top of efficiency, cost and performance (three reasons for migration in 2023). These migration trends are increasing the requirement for hybrid capabilities. The reasons for selecting a provider for GenAI tells a story around that application’s requirements. The number one consideration when selecting a provider for GenAI is performance and latency, the second is privacy and data protection requirements, and then data access capabilities.
Data Sovereignty Requirements Continue To Drive Dedicated Cloud Interest
The top workloads residing in dedicated cloud in 2024 are CRM, ERM and human capital which tend to deal with sensitive personal data and information. The most added workload in the next two years will be AI lifecycle platforms. It is not just workloads. Of cloud buyers’ data today, 30% is centralized in a data center, 24% is in a remote office/ branch environment and 20% is at the edge (some of this is public cloud but some is in a dedicated environment).
Dedicated cloud is also now a favored environment for workload backups – especially for business and data management applications. Across every region, between 50% and 70% of cloud buyers want the ability to control where their data resides and increasingly their digital infrastructure as well. This is driving continued interest in dedicated cloud environments and again, placing hybrid high on the agenda with organizations realizing that dedicated cloud comes with a financial, skills, and management burden and does not deliver as fast a path to innovation and scale as public cloud options.
Risk Reduction Becomes Most Important With Disaster Recovery, Resiliency and Security
Security has always been a major concern for organizations doing cloud but with cloud underpinning so much business transformation, resiliency is becoming a more-encompassing area of concern (resiliency includes risk mitigation efforts, security and disaster recovery). When asked what is most important for their cloud investments in 2024, the ability to recover from an event – disaster recovery and backup – was the most important consideration followed by risk management and comprehensive security. This is not all about increasing business reliance upon cloud; uptime of critical environments is increasingly becoming a requirement of industry bodies, regulators, and customers. And outages and security events are now much more public.
Partners and Ecosystems Equal Innovation
The ability to provide ecosystems and partnerships is now a requirement for many organizations deploying or transforming a cloud. Ecosystems cover hyperscale ecosystems, managed service providers, and even industry ecosystems (more organizations now want their providers or their provider’s partners to offer industry and business-specific expertise). It is not only about the breadth of technologies and services offered. It is also about the ability to provide in-country solutions (think of the rise in sovereignty requirements). Cloud is also becoming more complex, and cloud buyers want to offload some of their services burden by working with primary cloud vendors that can ensure their partners across a wide variety of services are highly qualified, experienced and certified. Increasingly they want them to also vet the AI capabilities of those partners. Organizations want assurance that a provider’s partners are not biased to a single platform or provider.
Sales Support and Customer Success Engagements Matter
Through 2024, cloud buyers started to hold more value in customer services and support and they started to demand more from cloud vendor sales teams. The number of engagements with both teams have been up. Around three quarters of cloud buyers engaged their sales and account management representatives at primary providers in 2024 (not surprising given the focus on cloud transformation and the introduction of AI into the business).
Sixty-six percent of cloud buyers also engaged their customer services teams (a figure that was at 53% in 2023) and 84% now have customer services and support bundled into their contracts. Cloud buyers want these teams to be accessible and easy to reach, and they must display technical knowledge and expertise and a strong understanding of the customer’s business. Sales teams will do well if they can also be proactive and offer quick solutions to cloud challenges.
AI Will Happen in and Across Clouds
AI underpins many of the trends seen in cloud throughout 2024. We know vendors are focused on delivering AI solutions, but we still often get asked where buyers are with adoption. By the end of last year, 49% of cloud buyers had deployed predictive AI, 46% interpretive AI and 51% GenAI. Around a quarter planned across each category to deploy in 2025. When asked then who was best positioned to help them to deploy AI, 36% said their primary cloud provider followed by 21% their primary technology and infrastructure vendor (which also offers on-ramps to cloud or their own cloud services).
For training requirements, 23% preferred a dedicated hosted cloud, 23% SaaS platform and 17% public cloud and the same said a dedicated on-premises cloud and edge. The focus remained on dedicated hosted cloud for tuning followed by SaaS and public cloud and a similar trend was seen for inferencing. While hosted dedicated cloud options are favored, public cloud is still being used by about a fifth of respondents across all areas. Most vendors offer flavors of public cloud or access to public cloud and dedicated cloud today – those that do (think of the leading cloud providers) are also ahead with GenAI adoption rates.
