Peering ahead at the universe of cloud services, there are several notable trends expected to configure the topography of IT in 2025. If there is a top-line description, it would be something like: “Cloud services 2025: Vertical over horizontal.”
While the usual suspects (Amazon Web Services, 31% marketshare, an expected $104 billion in 2024 revenue; Microsoft Azure 20%; Google Cloud Platform 13%; Alibaba 4%; Oracle 3%) will continue to maintain their top five places in the $313 billion global cloud services market, there are new factors coming into the picture that will be taking some of that business away. AWS has already lost some of its lead, down 1 percentage point (roughly worth $1.5 billion) from its 32% portion of the pie in 2023.
Here is what The New Stack is seeing:
The Rise of Industry-Specific Clouds
General-purpose cloud platforms (AWS, Azure, GCP), while still providing the lion’s share of enterprise web services, are gradually giving way to next-gen systems that are carefully and intentionally connected to their enterprise use cases.
We’ll see more cloud providers tailoring their services to specific industries such as health care, finance and manufacturing. These specialized clouds will offer pre-built tools for developers and new compliance certifications and industry-specific expertise for administrators, making it easier for businesses to adopt cloud solutions.
In fact, these specific-use clouds often will be developed alongside – or in place of – what are now known as new private clouds, many of which are staged on company campuses under heavy security or operated independently from public clouds. Security issues, more difficult to cope with than ever, are mandating these changes, especially for verticals such as fintech, health care, IT, science, military and retail.
Public clouds are not always the best option for addressing the specific needs of vertical segments, leaving some organizations to look at creating a more defined path to manage their workloads and keep up with changes in their business, data workloads, compliance and regulatory requirements.
According to industry researcher Gartner, the future belongs to vertically focused industry cloud platforms (ICPs) – specialized sets of digital tools purpose-built and designed for the unique needs of an industry. Some examples of vertically focused ICPs include AWS Healthcare Accelerator, Google Cloud for Healthcare, Microsoft Dynamics 365, Salesforce Financial Services Cloud and Shopify.
Gartner further projects that more than 70 percent of organizations globally will be running ICPs by 2027. It also believes that the total market for industry-specific cloud platforms will grow to be worth $266.4 billion by 2025, compared to $82.5 billion in 2020.
Continued Growth of Serverless Computing
Serverless computing is ready to become significantly more important in cloud services by 2025, driven by a convergence of factors that address specific needs in application development and deployment. They include:
- Serverless computing eliminates the need for constant server provisioning, charging only for the resources consumed during function execution. This is significantly more cost-effective for applications with fluctuating workloads or unpredictable usage patterns.
- It automatically scales resources up or down based on demand, ensuring that you’re only paying for what you need when you need it.
- It is inherently suited to microservices, allowing developers to build applications as a collection of small, independent services, improving agility and flexibility.
Cloud Security Improves with Confidential Computing
Confidential computing will become more mainstream, allowing for data encryption even while in use. This will enhance security and privacy for sensitive workloads in the cloud, especially for industries with strict compliance requirements.
Confidential computing represents a significant advancement in cloud security by protecting data during processing, enhancing trust, reducing vulnerabilities and ensuring compliance with regulations.
The Growth of Cloud Native Data Warehouses
Cloud native data warehouses, such as those made by Snowflake, Databricks, and SAP, will continue to grow in popularity, offering scalability, performance and cost-effectiveness for businesses dealing with large volumes of data. These platforms integrate closely with other cloud services, enabling advanced analytics and real-time insights.
The trend toward using cloud native data warehouses is fueled by the increasing demand for scalable analytics, market growth, flexibility and integration with advanced technologies.
The Emergence of WebAssembly (Wasm) in the Cloud
WebAssembly is an open standard whose main objective is to offer a closely native performance on the web while maintaining compatibility with the current ecosystems and standards. Wasm will gain wider use in 2025 as a portable and secure runtime environment for cloud applications. This will enable developers to write code in multiple languages and deploy it across different cloud platforms with ease.
Advancements in AI and Machine Learning Operations (MLOps)
Cloud providers are increasingly integrating AI and machine learning (ML) capabilities into their services. This includes pre-trained and specialized large language models, AI development tools and AI-optimized infrastructure. Expect to see more AI-powered solutions for tasks such as data analytics, cybersecurity and automation.
Adding such algorithms to their products and operations allows enterprises to automate tasks, analyze data more efficiently, make better predictions and enhance the all-important user experience across various aspects of their businesses.
Cloud platforms also are making AI more accessible to businesses of all sizes, even those without dedicated data science teams. This is achieved through user-friendly tools, low-code/no-code platforms and pre-built AI solutions.
AI and ML will offer developers a focus on MLOps for streamlined model development, deployment and management.
More Sophisticated Cloud Cost Optimization Tools
As cloud adoption grows, so will the need for effective cost management. We’ll see more sophisticated tools and services that will be more user-friendly and provide granular insights into cloud spending, automation of cost optimization and to help businesses maximize their return on investment.
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