collected statistics for several years and identified 5 trends

Hello, We are a team mClouds. Every year in September we read dozens of analytical reports and analyze what trends will influence and are already influencing cloud technologies. This time we decided to share with you what we will focus on in the next five years. So, let's go: five global trends that will determine the future of Russian clouds.

#1. Migrate workloads to the cloud

In the next five years, cloud technologies will penetrate all sectors of the economy, even those that have so far adhered to the on-premise strategy due to strict requirements in terms of information security. This is the verdict of both Western and Russian industry analysts.

Australia already has one foot in the future that Gartner envisions. Researchers at Australian company ADAPT predict that by 2025, up to 55% of the country's workloads will be in public clouds. — *Australia already has one foot in the future it is painting* *Gartner.* *Researchers from the Australian company ADAPT* *predictthat by 2025, up to 55% of workloads in the country will be in public clouds*

As shown by the iKS-Consulting study, published in June 2024, last year the total volume of the Russian IaaS and PaaS market grew by almost 34% and approached the 121.4 billion ruble mark.

The reasons are clear:

acceleration of digitalization of all sectors of the economy;
increasing workloads and high cost of ownership and upgrading of on-premise infrastructure;
shortage of personnel in IT;
growing competition from players who are actively transferring business processes to the cloud;
the ability to quickly change the volume of consumed computing resources as needed.

In the next five years, cloud providers will annually receive an average of 19 thousand new clients who have not worked in the cloud before. Even energy, defense industry, insurance and medical companies, where serious information security requirements apply, will partially or completely switch to the cloud.

Large businesses and national corporations are more likely to use a hybrid model, dividing the workload between private clouds on local infrastructure and public ones on the provider infrastructure. According to our internal statistics, about 70% of mClouds clients from medium-sized businesses already work on a hybrid model: they keep some services in the cloud, and some on their own infrastructure platform.

Small and medium businesses are more inclined towards the IaaS model. There are a whole range of reasons for this:

the rising cost of owning your own IT infrastructure due to the departure of global vendors – import-substituting equipment turned out to be more expensive than Western equipment, while Russian software continues to rise in price by 15-30% year on year;
increasing cyberattacks on Russian businesses and the lack of internal competencies to prevent them;
More providers mean a wider range of services that can be combined.

According to analysts' forecasts, by 2028, the level of IaaS penetration in the SME segment may double compared to 2023.

Due to government support and the spread of cloud infrastructure services to those sectors of the economy that have so far preferred to work on-premise, by 2027 the share of cloud services in Russian GDP, according to iKS-Consulting, will double – from 0.07 to 0.15%.

According to Gartner, cloud technologies will simplify the release of scalable applications due to ready-made tools, the ability to roll out fully functional Kubernetes clusters and a dense CI/CD pipeline for implementing serverless functions.

Russian analysts also believe that the future lies in platform services with a ready-made set of tools for developing and deploying applications. In this way, businesses will be able to kill two birds with one stone: overcome the shortage of qualified personnel in IT and smooth out the growth in equipment costs.

We at mClouds see growing demand:

on platform tools and services for generative AI and ML;
to cloud servers with GPUs – mClouds has already increased its supply of such servers and continues to import new video cards;
for information security services;
to transfer employees' workstations to the cloud.

To prepare for the near future, it makes sense for providers to develop their product portfolio, perhaps by merging with other market players and creating a kind of cloud services marketplace.

#2. Hybrids and multi-clouds

One cloud is no longer enough. Some companies become hostages of multiclouds against their will, for example, as a result of a merger. Others choose this model consciously – to optimize the budget and get the maximum of convenient tools and services. Still others carefully try clouds, leaving critical processes on their own IT infrastructure. But, one way or another, the share of these two models – hybrid and multicloud – is growing worldwide. And Russia is no exception.

Factors that determined respondents' choice in favor of workload diversification: performance, cost, data sovereignty, malware protection, and flexibility — *Factors that determined* *respondents choice* *in favor of workload diversification: performance, cost, data sovereignty, malware protection and flexibility*

Distributing workloads across multiple cloud providers allows businesses to reduce the risks of outages and data leaks, as well as minimize potential consequences. Read more about the pros and cons of this approach in the previous article.

According to various estimates, 20-30% of companies in Russia currently use multicloud. Most organizations are inclined to a hybrid model of IT infrastructure consumption and are ready to transfer only some non-critical processes to public clouds, leaving the rest on local infrastructure or in a private cloud, iKS-Consulting notes.

#3. Sovereign Clouds and Security

The need for cloud sovereignty is a global trend.

IDC defines sovereign clouds as a set of data centers and personnel authorized to work with data, including technical support and administration services. — *Sovereign clouds* *at IDC* *refers to the totality of the data center and the personnel authorized to work with the data, including technical support and administration services*

According to analysts, this trend has noticeably intensified in the Asia-Pacific region in recent years. The main reasons are:

geopolitical tensions in the region;
the need for governments to have digital autonomy and control over where and how sensitive data is stored: According to IAAP calculations, Data protection laws have now been adopted in 137 countries around the world;
Cybersecurity issues: according to StormWall, Last year alone, the number of DDoS attacks worldwide increased by 60%, and there is no reason to believe that they will decrease in the next year;
data processing speed, which directly depends on the localization of the IT infrastructure.

The sovereign cloud will help Australia's intelligence and defence agencies securely store sensitive information, share and analyse classified data at high speed, and provide an environment for AI and ML, the department said. — *According to the ministry,* The sovereign cloud will help Australia's intelligence and defence agencies securely store sensitive information, share and analyse classified data at high speed, and provide an environment for AI and ML to operate.

By the end of 2024, Russia plans to launch the national project “Data Economy and Digital Transformation of the State” with funding of up to 2.7 trillion rubles by 2030. Cloud computing and services have been declared one of the priority areas of the national project.

There is also a demand for information security services from businesses. When choosing a cloud provider, preference is likely to be given to those who have their own information security departments and information security monitoring centers. And it is good if the provider's information security services include additional security elements, such as crypto gateways and new-generation firewalls. As they say, draw your own conclusions.

#4. Industry clouds

Industry cloud platforms, or ICPs, are specially designed for a specific industry: retail, industry, insurance. The modular structure allows you to quickly, without much expense and effort, adapt them to your specifics. And clear specialization simplifies integration with industry systems, such as CRM, ERP, and others.

For comparison: in 2022, only 5% of large companies used industry clouds, in 2023 - just under 15% — *For comparison: in 2022, only 5% of large companies used industry clouds, in 2023 – just under 15%*

Russian cloud providers are also trying to include offers for different types of companies in their product portfolio. However, for now the focus segments are represented by three groups: large companies, SMEs and the state. There are few industry-specific offers on the market right now. Analysts agree that this is a matter of two to three years.

At mClouds, we believe that creating industry clouds will only be economically viable if there is already a sales market. Often, such solutions arise around equipment or software that has already become an industry standard.

#5. AI will require new capacities and new approaches to energy efficiency

Artificial intelligence, machine learning, remote graphics work and big data processing will all simultaneously make our lives easier and more difficult in the clouds in the near future.

According to the same Gartner: in 2023, only 10% of programmers used AI in development — *According to the same data* *Gartner: in 2023, only 10% of programmers used AI in development*

What “buts” might there be here:

The spread of AI, ML, solutions for remote work with graphics, etc. will require new capacities from data centers and will accelerate the demand for servers with GPUs. At mClouds, we have also started providing GPUs for working with and training neural networks based on NVIDIA L4 and NVIDIA L40S cards. AI uses video cards for calculations, and graphics applications use them for their intended purpose, and both trends are growing. This means that the demand for GPUs will grow.
Using GPUs in servers requires more energy for data centers.
Data centers already use 1-2% of all electricity generated in the world, and by 2030 analysts predict that this figure will grow to 10%. After working, data centers release this energy into the atmosphere. The climate suffers. At the same time, the possibilities of returning the PUE indicator to normal values by upgrading data centers are practically exhausted.
To prevent servers from overheating under such loads, new approaches to cooling are required.
Rising energy prices, a shortage of computer chips, and the increasing popularity of GPUs will inevitably lead to rising prices for public clouds.

By 2028, researchers predict that ML and AI will account for 50% of all cloud computing resources

So our latest trend is all about problems that are yet to be solved. What are the possible options here:

Legislative regulation. For example, in the Netherlands all new data centers must maintain a PUE value of 1.2, and in Singapore – 1.3. And the Australian authorities are planning to introduce mandatory climate-related reporting. At first, only for large companies.
Creating energy-efficient computing power. Foreign analysts predict the emergence of processors that use dynamic voltage and frequency scaling.
Additional cooling for servers. There are different options here. For example, energy-saving liquid cooling systems.
Reuse of excess heat and data centers. The UK government recently announced it would use it to provide cheap heating for more than 10 thousand houses.
Construction of data centers near nuclear power plants. In world practice, such an approach is already being used to solve the problem of capacity shortage. There are similar projects in Russia. Among them are Rostelecom's data center at the Kalinin NPP site and Sber's data center under construction in Balakovo.