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Industry analysts warned of a potentially concerning “<a href="https://www.itpro.com/cloud/369926/cloud-growth-experiencing-slowdown-amid-rising-economic-disruption">cloud slowdown</a>” last year. This came as a result of enterprises cutting spending on cloud services due to tightening budgets and increased economic uncertainty. However, that’s projected to change in 2024.
While budgets remain tight, global cloud spending is expected to increase by 20 percent this year, according to new Canalys research. In addition, TechTarget and ESG Technology Spending Intentions research revealed the increasing importance of managed cloud service providers, particularly for industries driving cloud growth.
Let’s look at some of the reasons why, despite last year&#8217;s pessimistic prognoses and the volatile global economy, cloud spending is expected to hit new records this year.
<h2 data-block-key="24hc1">The rise of hybrid, multi and private cloud solutions</h2>
Companies are discovering that the evolving business landscape demands a more agile approach to cloud hosting. Despite the initial allure of public cloud services from hyperscalers, research from an <a href="https://www.datacenterdynamics.com/en/analysis/cloud-repatriation-and-the-death-of-cloud-only/">IDC survey </a>indicates their popularity is fading. While public cloud solutions served as a good starting point for digital transformations, the limitations and risks associated with these platforms have prompted the rise of alternatives.
With the rise of complex technologies such as AI and Edge computing, growing cybersecurity concerns, and the ever-present need for cost-effective IT solutions (both in good times and bad), businesses are increasingly turning to diversified and tailored cloud strategies. As the public cloud cannot support all these functions alone, so companies are diversifying their cloud presence by adopting private, hybrid, and multi-cloud architectures.
As more companies become aware of bespoke hybrid or private cloud platforms and how they can help to meet business needs, increased and proactive cloud investment is becoming the way to prepare businesses for growth and protect against challenging economic conditions.
<div class="block-pullquote">
<aside class=" sf-pullquote--right">As the public cloud cannot support all functions alone, companies are diversifying their presence</aside>
</div>
<div class="block-text">
In other words, companies are embracing the long-term benefits of the cloud.
However, the flip side is that it can be difficult to manage the increased complexity of a bespoke cloud environment, especially if there&#8217;s a shortage of cloud talent.
<h2 data-block-key="fa3ic">Growing demand for MSPs</h2>
Due to the talent shortage and increasing complexities in the management of emerging cloud platforms, managed service providers (MSPs) are becoming increasingly essential. Many organizations are expanding beyond their in-house IT teams with MSPs or simply foregoing their in-house team altogether, letting the business focus on its goals. At the same time, the MSP handles the cloud environment.
Security is also a significant element. According to a Checkpoint survey, <a href="https://www.checkpoint.com/press-releases/cloud-security-threats-remain-rampant-check-point-survey-reveals-heightened-concerns-for-76-of-organizations-amid-48-increase-in-cloud-based-network-attacks/">24 percent</a> of respondents reported experiencing public cloud-related security incidents, with misconfigurations, account compromises, and exploited vulnerabilities being the most common incident types. Therefore, companies also need assistance navigating the increasing complexity of cybersecurity. They seek partners who can bolster their ability to detect and respond effectively to threats.
The need for MSPs&#8217; knowledge and skills is particularly acute in some vertical industries that require time and expertise to reach technological maturity. Many companies in those sectors use MSPs to lead their cloud integration and manage cybersecurity.
<h2 data-block-key="fu86t">Cloud growth in vertical industries</h2>
Research from <a href="https://www.computerweekly.com/microscope/news/366572012/MSPs-seen-as-answer-by-skill-strapped-customers#:~:text=The%20latest%20TechTarget%20and%20ESG,support%20that%20MSPs%20could%20deliver.As">Tech Target</a> has identified some of the vertical markets set to be growing IT budgets the most this year, with finance, manufacturing, technology, and education leading the way. Here are some examples of how cloud technology is driving growth in these industries:
</div>
<div class="block-text">
<h3 data-block-key="fvz5d">Finance:</h3>
<ul>
<li data-block-key="6f553">Cloud technologies enable financial institutions to streamline processes, improve data analytics for risk management, and offer personalized services to customers.</li>
<li data-block-key="8hl3l">Adoption of cloud-based solutions in finance facilitates scalability, agility, and cost-effectiveness, allowing firms to adapt quickly to market changes and regulatory requirements.</li>
</ul>
<h3 data-block-key="bv7no">Manufacturing:</h3>
<ul>
<li data-block-key="cgndp">Cloud technologies support Industry 4.0 initiatives by optimizing production processes, enabling real-time data analytics, and fostering innovation in smart manufacturing.</li>
<li data-block-key="ecio">Manufacturers leverage cloud solutions to enhance efficiency, agility, and competitiveness by integrating IoT devices, AI applications, and automation into their operations.</li>
</ul>
<h3 data-block-key="anspa">Technology:</h3>
<ul>
<li data-block-key="6294n">Cloud computing enables tech companies to dynamically scale resources, reduce time to market, and innovate rapidly in response to market demands.</li>
<li data-block-key="4bost">Tech firms use cloud platforms for data storage, processing power, and AI capabilities to drive digital transformation and deliver cutting-edge solutions to customers.</li>
</ul>
<h3 data-block-key="eh50">Education:</h3>
<ul>
<li data-block-key="e5ohn">Cloud services are transforming the education sector by facilitating remote learning, collaboration among students and educators, and access to educational resources.</li>
<li data-block-key="154ob">Educational institutions use cloud technologies for virtual classrooms, online learning platforms, and data management systems to enhance teaching effectiveness and student engagement.</li>
</ul>
<h2 data-block-key="fvjq4">Key takeaways</h2>
Today&#8217;s world of economic volatility and geopolitical uncertainty, as well as the accelerated adoption of new technologies, is the driving force behind this year&#8217;s predicted increase in cloud investment. Many organizations now recognize that the cloud is the key to long-term competitiveness and that bespoke cloud solutions, including private, hybrid, and multi-cloud, are the route to business agility, adaptability and resilience.
Previously concerned about the challenges of managing bespoke but complex cloud environments, enterprises appear to be convinced of the benefits and are increasingly collaborating with experts from managed service providers.
MPSs are set to become an essential element of the cloud technology sector, evolving and driving cloud spending and attracting investments, particularly in industries such as finance, manufacturing, technology, and education.
</div>

Industry analysts warned of a potentially concerning “cloud slowdown” last year. This came as a result of enterprises cutting spending on cloud services due to tightening budgets and increased economic uncertainty. However, that’s projected to change in 2024.

Why Cloud Spending is on the Rise

Why Cloud Spending is on the Rise | Hyve Managed Hosting

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Cloud-enabled digital transformation can take the form of migrating from on-premise to the cloud, migrating from one cloud solution or provider to another, or adopting a new cloud model such as hybrid cloud. A carefully considered and well-executed digital transformation can make your business more efficient and productive, optimizing your resources and improving your bottom line.
<h2>What is digital transformation?</h2>
Digital transformation uses technology to drive the business forward by integrating digital technologies into all aspects of operations. This could include cloud computing, artificial intelligence (AI), and automation. Integrating these technologies involves evaluating and restructuring existing processes and strategies in order to fully leverage their capabilities.   
As technology constantly evolves, businesses need to embrace the latest developments to stay competitive. The <a href="https://www.idc.com/getdoc.jsp?containerId=prUS51352323">IDC predicts</a> that by the end of 2027, digital transformation spending will reach 3.9 trillion USD worldwide, a compound annual growth rate of 16.1%. It is clear that digital transformation will be the centre of many business strategies in the years to come. 
Because every business is so diverse, digital transformation projects will differ for every company. For companies that have not traditionally centred technology, digital transformation could include migrating all or part of their workloads from on-premise to the cloud. For more technologically minded companies, digital transformations incorporate cutting-edge technological updates into their operations.
Digital transformation can take many different forms, but overall the aim will be to incorporate new technology to improve processes and cost-efficiency for the business.
<h2>What are the benefits of cloud-enabled digital transformation for businesses?</h2>
Cloud plays a central role in digital transformation, especially as major tech trends such as Internet of Things (IoT) and AI are driven by cloud.
Cloud-enabled digital transformation can take many forms. These could include migrating from on-premise to cloud infrastructure, adopting a High Performance Computing (HPC) server solution to run a heavy AI workload, or moving to a hybrid cloud separating workloads into the best suited environments. 
The cloud helps to transform businesses because it is so agile and flexible &#8211; it is possible to easily add resources to servers and move applications. It is also hugely cost-effective as users only pay for the resources that they use, as and when they require them.
There is a growing need for services and applications that are easy to access, navigate and use on any device. The cloud enables users to work remotely and collaboratively from anywhere, which is essential for any modern business.
Cloud solutions help businesses accelerate and streamline their day-to-day processes, creating a better experience for customers and employees.
Security is also a key motivation for many digital transformation projects. With managed cloud, businesses can protect their data by benefitting from several layers of infrastructure security, secure data centres and protection against threats or DDoS attacks.
<h2>A successful cloud-enabled digital transformation &#8211; Persimmon Homes</h2>
Persimmon Homes, one of the UK’s most successful house-building companies, undertook a significant digital transformation project, virtualizing 100% of its infrastructure. With a business-critical customer-facing website, Persimmon required the top quality in their infrastructure. Their previous hosting solution was not meeting this requirement, with numerous outages affecting their customer experience. Their digital transformation included migrating to a managed hosting solution with Hyve. Planning was essential, allowing the migration to take place with zero downtime.
6 months on, Persimmon Homes had achieved cost-savings of around £8000, in addition to greatly increased responsivity and performance on their site. 
‘The Hyve solution is rock solid, and we had a seamless migration experience,” Lance Evans, Digital Solutions Manager at Persimmon commented. “Our infrastructure is so much more scalable now as we’re able to predict costs ahead of time, driving home the value proposition that underpins our business mentality.’ 
Read full details of Persimmon Homes’ digital transformation project in <a href="https://www.hyve.com/case-studies/persimmons-homes-case-study/">our case study.</a>
<h2>Addressing problems businesses face with digital transformation</h2>
True digital transformation requires in-depth reviewing of current infrastructure, planning, and implementing solutions. This can be a lengthy process for businesses. Additionally, digital transformation can mean so many different things, and a lot of businesses are confused about how to approach the project. 
When planning any digital transformation, you should assess your unique business goals and challenges, and any industry requirements. This will narrow down your options and give you a clearer idea on your strategy. An experienced provider will work with you to address your concerns, answer your questions, and make the process as efficient as possible.
Some businesses are still resistant to change. They could feel that taking on a project is risky, or the project is too involved. Often legacy equipment and software has been in place for years and the migration and setup to new systems could be off-putting. A detailed project plan ensures that the process is as streamlined as possible to avoid these issues.
Businesses may be cautious about undertaking a large digital transformation project due to a lack of in-house understanding or expertize on the new technologies. Incorporating a managed cloud solution eliminates the need for an in-house technical team. Managed hosting providers take control of your servers and systems, giving you all of the benefits of cloud while leaving you to focus on your business.
<h2>Begin your digital transformation</h2>
Do you have a digital transformation strategy? <a href="https://www.hyve.com/en-us/contact-us/">Get in touch with Hyve</a> to discuss the benefits of moving to the cloud and see how we can help you choose the right solution for your business.

Digital transformation adopts technologies that make working life more efficient. Does your business have a digital transformation strategy?

How can your business benefit from digital transformation?

How can your business benefit from digital transformation? - Hyve Managed Hosting

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Consuming software by subscribing to a service is becoming far more common than actually buying a product outright. One everyday example of this is the move from purchasing CDs and DVDs to subscription services such as Spotify and Netflix. From Dropbox to Mailchimp, or Photoshop to Hubspot, service-based subscriptions have become an integrated part of our daily lives.
In the tech industry, ‘as-a-service’ models are also increasingly replacing traditional ownership models. One recent example of this is VMware, which, since being acquired by Broadcom, now only offers subscription licences, replacing their previous perpetual licences.
When you rely on this type of software delivery model, you are using Anything-as-a-Service (XaaS), a collective term for cloud-based subscription services. 
XaaS is delivered over a network, rather than on-site, and therefore requires participation from a third-party provider, which could range from simply providing the infrastructure to producing and delivering a ready-to-go application.  
With XaaS, it is a bit like renting the functionality of the technology, rather than actually buying the solution. This way, you only pay for what you use, but you never own the product yourself. 
<h2>What are the most common ‘as-a-service’ models?</h2>
The most common of the ‘as-a-Service’ models are SaaS, IaaS and PaaS. So, what do these acronyms mean?
<h3>What is SaaS?</h3>
Software-as-a-service (SaaS) is the most common type of XaaS. It refers to the delivery of ready-made applications, such as Salesforce or Disney +, to users who pay a recurring usage fee.
Typically, the fee will cover updates and upgrades to the application as well as your usage, which is not always the case when you buy a solution outright. Compared to other as-a-Service products, SaaS places the most responsibility on the provider, including the maintenance, management and development of the program itself.
<h3>What is PaaS?</h3>
Platform-as-a-Service (PaaS) provides the tools and framework that you need to develop, manage and run unique, customisable software. Typically, PaaS provides pre-configured virtual machines (VMs), alongside other resources and is accessed via a web browser. 
PaaS is popular with developers, as it saves them from sourcing individual software tools to create their own solutions. It can even reduce the amount of code they need to write, which makes the development and deployment of apps much more cost-effective. 
<h3>What is IaaS?</h3>
Infrastructure-as-a-Service (IaaS) is where the provider hosts the infrastructure – including servers, virtualisation, and storage – that you need to use and store your data. By deploying and configuring VMs in a third-party data centre, you can ensure your data is secure and manage your systems remotely.
With IaaS, the user has a lot more freedom than PaaS and SaaS – but also a lot more responsibility. As a self-service model, the maintenance and management of software and applications ultimately lie with you, so you need to have experts in-house, or a managed service provider to run it for you.
IaaS is a flexible, cost-effective and scalable solution compared to hosting your infrastructure in-house. For businesses such as ticket vendors, IaaS is the perfect solution for planned, periodic spikes in traffic as you only pay for the extra resources as you use them, rather than large bills all year round.
<h2>What are the challenges of XaaS?</h2>
There may be some concerns from customers about using an XaaS model for their business, particularly for business critical services. With this model only set to increase, it is important to address these concerns.  
<ul>
<li aria-level="1">Security &#8211; As the service is being delivered through a third-party provider, your data is linked to them. If the provider does not have thorough security measures in place, your data could be at risk in the case that they suffer a breach.</li>
</ul>
<ul>
<li aria-level="1">Cost &#8211; In a traditional ownership model, you will pay for the product or service once upfront (a capital expenditure), but with the ‘as-a-service’ model you continue paying regularly for as long as you use it (an operational expense). The cost of the subscription can increase through its lifetime.</li>
</ul>
<ul>
<li aria-level="1">Vendor lock-in &#8211; XaaS services come with a risk of vendor lock-in, where the customer is dependent on the provider, and moving away would be impractical and costly. This leads to the customer feeling forced to stick with the provider. </li>
</ul>
&nbsp;
These challenges can generally be mitigated through thorough research and choosing a reputable provider. Before beginning a contract for any product or service you should ensure the provider adheres to the highest security measures, and holds any relevant certifications for this. You can also ask the provider about their information security and privacy policies. Similarly, a provider should be transparent about their prices from your initial consultation, and clearly explain how and when any price increases may be implemented. To avoid vendor lock-in, look for a provider with no exit fees and a simple process should you choose to leave.
<h2>What is the future of the ‘as-a-service’ model?</h2>
Whilst IaaS, PaaS and SaaS are the three key players in the cloud services environment, almost anything can be consumed as-a-service. <a href="https://www.hyve.com/en-us/managed-services/desktop-as-a-service/">DaaS (Desktop-as-a-Service)</a>, <a href="https://www.hyve.com/en-us/cloud-hosting/disaster-recovery/">DRaaS (Disaster-Recovery-as-a-Service)</a> and <a href="https://www.hyve.com/en-us/managed-services/backup-as-a-service/">BaaS (Backup-as-a-Service)</a> are amongst many other commonly used cloud-based services.
Each of these cloud computing models gives users flexibility and options that on-premise hosting simply cannot provide. While some businesses have been nervous to adopt XaaS because of security or compliance concerns, the combination of global internet access, high-bandwidth and the rapid adoption of cloud computing provides a rich environment for accelerated XaaS growth.
Do you require a cloud hosting solution as-a-service? <a href="https://www.hyve.com/contact-us/">Fill out our contact form</a> and one of our cloud experts will be in touch.

With an ‘as-a-service’ model, the customer uses a subscription to access a product or service, rather than buying it outright.

What is an ‘as-a-service’ or ‘XaaS’ model?

What is an ‘as-a-service’ or ‘XaaS’ model? - Hyve Managed Hosting

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