New Wasabi report indicates cloud investments are not slowing down

Big cloud in a data center.  Background for sustainable data processing.
Image: Negro Elkha/Adobe Stock

Faced with global economic uncertainty, managers are rethinking their budgets and operations. Investments in technology — which have been on the rise for the past several years, driving up expenses — may seem like an attractive business category for slash. However, the recently 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 respondents 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 backup and data recovery (44%).

SEE: Cloud Data Storage Policy (TechRepublic Premium)

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, the ROI and benefits, and how the cloud is adapting to meet IoT and edge computing requirements . In addition, Smith highlighted how new data storage technologies and approaches could support businesses as data generation reaches unprecedented levels.

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Why enterprises continue to invest in public cloud

The global cloud migration is now well established and the digital acceleration effort is 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 enterprise global storage capacity is now in public and dedicated clouds.

Wasabi commissioned independent market research agency, Vanson Bourne, to conduct research for the 2023 Global Cloud Storage Index. The study surveyed 1,000 IT decision makers in nine countries.

According to the report, companies are leaving on-premises resources and leveling off cloud computing in their quest for better infrastructure resilience and durability. The need to scale, the importance of accessing global regions and the desire to avoid expensive hardware purchases were also cited as defining factors for the switch. Central IT, application developers and external partners have the biggest influence on cloud budgets.

“The value of cloud infrastructure services remains high, particularly as it relates to the ability of these services to fuel digital transformation and modernization initiatives, primarily due to reasons such as immediate scale, access to new geographies and faster time to market ,” Smith said.

He went on to explain that public cloud investments are expected to increase 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 gain access to advanced 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 technologies to address contemporary challenges such as supply chain disruptions, cybersecurity, compliance and governance, and environmental pressures.

SEE: Top 5 Benefits of Applying ESG Standards to Your Business (TechRepublic)

Although cloud tools give companies a competitive advantage, the financial landscape and how it affects cloud storage budgets remains a concern for many companies. Wasabi’s research suggests that while 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 will be increased scrutiny and risk aversion – especially for new customers considering adopting or purchasing a cloud infrastructure service,” Smith said. “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 companies that are doing a major migration to the cloud.”

Smith also explained that companies want to reap the initial benefits of the cloud in terms of cost and performance. Still, they will need to accurately predict their three-to-five-year ROI as they streamline and optimize use of the cloud over time.

“In many cases, understanding this long-term picture is the hard part and will be an increasing focus this year as organizations look more at the long-term value of their cloud purchases,” Smith added.

Multicloud investments are increasing rapidly as companies seek different solutions and specific functions from their cloud environments. About 57% of organizations surveyed use more than one public cloud storage provider. In addition, cyber security, compliance and governance are decisive factors. Customer demand for secure, resilient cloud storage has a significant impact on vendor selection.

SEE: Hiring Kit: Cloud Engineer (TechRepublic Premium)

In addition, the rise of IoT, new endpoints and hybrid work environments – which require low latency and reliable connectivity – are driving a rise in edge computing. How is the cloud market working to meet the security and performance requirements 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 key to these types of use cases. From a cloud storage perspective, it’s a battle against data gravity. We need to ensure that data can be moved to and from distributed edge locations and centralized regional locations securely , efficient and cost-effective.”

Data storage innovation and the future of public cloud

The data sphere is expected to grow 300% in the next three years, and experts are warning that the world is now experiencing a data crisis. In response to this problem, Smith says he envisions continued investment in data center facilities, supported by the development of ever more efficient and dense storage media.

“Cloud service providers are uniquely positioned to utilize these facilities and the denser storage media as efficiently as possible,” Smith said. “From an economic perspective, we’ve seen the dollar per GB/TB of storage continue to decline, which is a good sign for those who think 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 new storage media types, such as DNA-based storage, silica-based storage and archival storage on ceramic plates,” Smith said.

The company’s role in cloud data management

Not everything falls on hardware innovation. According to Smith, companies also have a significant role in managing this data growth.

“The data sphere is massive and growing exponentially, but not all of that data needs to be stored,” he said. “As enterprise storage strategies mature, they will evolve from a position of storing everything to a position of storing everything effectively.”

By leveraging data governance and lifecycle policies, organizations can place data on the most efficient pool of available storage and efficiently 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 to shape the cloud storage sector. The future of public cloud, even when affected by an economic downturn, 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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