Industry Insights

6 Cloud Computing Challenges Your Team Needs to Solve in 2023

Written By Ryan Loftus | October 12, 2022

By 2026, the cloud computing market will have grown by 112.7% in just five years. That staggering growth rate will offer unprecedented opportunities for cloud engineers, cloud service providers, and companies operating in the cloud.

However, the growth of cloud computing isn’t without its challenges. Economic uncertainty. Talent shortages. Data governance. Regulatory compliance. The range of complex problems cloud-based companies will have to solve are far reaching.

What is Cloud Computing?

Cloud computing is the on-demand availability of computing services and resources from the internet (or the “cloud”). This ranges from servers, storage, and databases, to software, networking, and other IT resources. Since these resources live online, cloud computing offers a number of benefits, aside from speed and reliability. Notably, you can enjoy the convenience of accessing, retrieving, and sharing information, wherever you are. And you only pay for the resources and services you need, and can easily scale them when you need to. While there are many benefits to mention, ultimately cloud computing saves time and money from infrastructure woes and maintenance costs.

The State of Cloud Computing

With all of these benefits, it’s easy to see why the popularity and adoption of cloud computing is surging. In 2021, the size of the global cloud computing market was valued at $445.3 billion. And it’s expected to grow to $947.3 billion by 2026. 

One exciting impact of the cloud revolution has been an acceleration of innovation in non-cloud technologies. Cloud computing has enabled organizations in every industry to outsource the purchasing and maintenance of infrastructure hardware and IT software. With more resources they’re now able to focus on innovating their own processes, products, and services. Cloud computing helps businesses to go to market faster, have performant applications and services, and scale exponentially.

At the same time, the adoption of cloud computing doesn’t only provide financial and service availability benefits, but also sustainability. Continuous technological advancement has contributed to climate change by increasing the world’s energy consumption. While it still has a significant energy cost, a study by Accenture, Microsoft, and WSP Global found that cloud computing does reduce energy consumption and carbon emissions.

How 2020 Changed Cloud Computing

While cloud computing services have been around since the 1990s, 2020 dramatically increased the need for cloud-based services and providers. Due to the pandemic, businesses closed their offices. Those who weren’t already in the cloud had to migrate there in order to survive. With a sudden spike in demand, cloud providers – like Microsoft Azure – became strained. With more options and several years of innovation in cloud technology, working with cloud-based organizations is smoother, but not without its challenges and opportunities.

Top Cloud Computing Challenges

It’s not a new trend, but cloud computing is still in its early stages of wide-spread adoption. Implementing a cloud-first business model poses several complex challenges for businesses, regardless of industry. Any team looking to build out a cloud-based tech stack in 2023 will need to solve these problems.

The Cloud Engineering Talent Gap

By 2026, the cloud computing market will have grown by 112.7% in just five years. With this unprecedented growth will come an equally large spike in the demand for cloud engineers to build this growing industry. Cloud job postings increased by 94% between 2017 and 2020. And that was before the pandemic. Now, cloud engineering is the most in-demand job in the world. 

However, the number of engineers is unlikely to keep pace with this exponential growth, widening the already huge deficit in the number of skilled cloud engineers available to build this growing industry. In late 2020, 80% of IT leaders say that inadequate employee skills are holding them back from expanding their cloud environments. Without more cloud engineering talent, this hiring gap could hinder the growth and innovation of the entire cloud computing industry.

While the huge opportunity will lead more people to become cloud engineers, hiring for these skills will be competitive for the foreseeable future. To succeed, cloud service providers and in-house cloud engineering teams will have to build effective processes for attracting, hiring, and retaining cloud engineers. Similarly, companies such as Deloitte have found that upskilling existing employees and training new hires to be an effective strategy for addressing the cloud talent gap.

Migration Beyond Data

While deciding to go cloud-based is the first step in migrating to the cloud, it’s often easier said than done. Transitioning to the cloud entails more than just moving data. It requires balancing core business priorities – like technical debt management and product innovation – while completing a complex cloud migration. But a cloud migration doesn’t end after solving the technical challenges. To become a cloud-based organization, you’ll have to rebuild business processes, obtain stakeholder buy-in, and retrain employees to work in the cloud. 

Vendor Security, Privacy, and Compliance

As the adoption of cloud-based services becomes the norm, choosing vendors that align with business policies is crucial. Mishandling data, especially personal information, could result in cyber attacks, legal liability, and data governance concerns. While the pressure of keeping up with infrastructure maintenance is no longer a concern, business practices now have the task of introducing new processes to thoroughly vet their cloud providers.

Cloud Backup and Redundancy Strategies

You’ve migrated your operations to the cloud. What happens if – or, realistically, when – the cloud service is unavailable? Similar to local servers and infrastructure, Any cloud-based organization should create a cloud backup strategy to prepare for outages, natural disasters, and cyberattacks. 

An effective cloud backup strategy includes:

  • Data redundancy
  • Infrastructure redundancy
  • Account replication
  • Testing protocols
  • Cyberattack protections
  • Sophisticated firewalls
  • Real-time asset tracking
  • Event logging

While there are factors beyond a business’s control, knowing how your services are impacted, the next steps, and alternatives can help prevent any financial damages as a result of cloud service unavailability.

Cloud Computing Expenses

As they gain more popularity, cloud-based services continue to increase in pricing. A business migrating to the cloud will have to experiment to identify what they should manage in-house and what they should outsource. The specific costs of cloud infrastructure vary depending on a company’s size, industry, and business processes. Underestimating cloud migration and computing expenses up front can cause budgeting and profitability problems later on.

Cloud Computing During a Recession

One market condition that could impact the adoption of cloud computing in 2023 is the potential of an economic recession. However, two things remain unclear. 

First, no one can agree if there will be a recession. The International Monetary Fund offers a grim prediction for 2023. JP Morgan and Bank of America also predict an imminent recession. However, the White House maintains that a recession is unlikely

Similarly, the impact of a recession on the cloud computing industry is uncertain. InfoWorld and TechRepublic consider the cloud to be recession proof. Some outlets even believe a recession would increase cloud adoption and spending. But the Wall Street Journal counters that cloud computing isn’t immune to a slowing economy. 

Overall, the relationship between economic conditions and the cloud is unclear. But one thing that’s certain is that the cloud will give companies the tools they need to adapt their infrastructure to the economy. For some companies, cloud computing will be an effective cost saving strategy to reduce overhead.

What’s clear is that the future of cloud computing remains unchanged. Even in the worst-case scenario, a recession will temporarily slow down the cloud. In the long term, the cloud is inevitable.

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