GenAI, Sustainable IT & Hybrid Cloud:
Unpacking 2024 cloud trends & challenges with Senior VP Shankar Bala

Generative AI came into practice in 2014, but it wasn’t until 2023, with the release of ChatGPT by OpenAI, that its widespread adoption began. This release caused a significant stir in the global community, prompting other cloud providers such as Azure to swiftly develop their own versions of OpenAI, thereby fueling interest in the Large Language Model (LLM) technology. Initially, GenAI was predominantly utilized for creating proof of concepts and pilot projects to understand its capabilities. Different industries sought tailored solutions from GenAI to address their specific needs. Developers started leveraging GenAI for coding tasks, while the media and creative industries utilized it for content creation.

Moving forward into 2024 and beyond, GenAI is poised to become mainstream. It will be employed across various domains, including software development and infrastructure management to helpdesk support, with the primary goals being cost reduction, incident minimization, and enhancing availability and scalability. Over the next two years, nearly all repetitive and template-based processes are expected to be automated using GenAI. Industries are not only using it to address customer and operational challenges but also to innovate and introduce new products, thereby increasing market penetration and bolstering brand loyalty. For instance, hotels may utilize GenAI to devise new recipes, healthcare providers to improve prognosis, and banks to improve customer experiences and operational flexibility.

In the coming years, GenAI is anticipated to be integrated as a standard offering in software products, and Large Language Models will be fine-tuned into specialized micro-models tailored to address the complex business requirements of different industries. Presently, companies in sectors such as banks, insurance and car rentals are actively developing their own GenAI models to augment its capabilities further.

Looking ahead, there’s a vision of integrating humanoid interfaces with these LLM models, granting them advanced cognitive abilities that could potentially replace numerous human-operated tasks. It's not a matter of if enterprises will adopt GenAI to stay competitive; rather, it's becoming an essential mainstream technology utilized by every enterprise worldwide. Failure to embrace GenAI could result in companies falling behind, with potential ramifications for their survival beyond 2030.

Skynet is a no longer just a possibility; It’s real and coming!

Cloud computing offers three key advantages over on-premises data centers: scalability, availability, and regulatory/security compliance. Transitioning from a capital expenditure (CapEx) model to an operational expenditure (OpEx) model is just one of the benefits of moving to the cloud, but its realization depends on various factors such as your stage in hardware procurement cycle, seasonal business demands, and usage patterns of data and applications.

In recent years leading up to 2023, numerous enterprises rushed to migrate their workloads to the cloud primarily to reduce infrastructure costs, often without a comprehensive understanding of cloud computing principles. Consequently, migrating legacy on-premises applications to the cloud without re-architecture or replatforming led to increased software license and cloud computing expenses.

For example, AWS offers cost-effective storage for large volumes of data, prompting many enterprises to migrate historical data without assessing its future necessity. Subsequently, they realized that while storing data in the cloud is inexpensive, accessing it comes with significant costs. Moreover, insufficient policies or governance in usage of cloud instances resulted in the proliferation of running server instances, either due to oversight or inadequate assessment of business needs and application architectures.

Additionally, the choice of deploying Windows virtual machines over serverless options for processes that run infrequently led to unnecessary expenses. Cloud providers offer calculators to assist in making informed decisions.

According to Gartner, more than 66% of cloud cost overruns stem from a lack of guidance or improper application sizing. At Aspire, we consult with enterprises to understand their motivations for cloud computing, primarily focusing on availability, scalability, and security. Our Cloud Maturity Consulting is tailored to assess customer business models and application architectures, providing options for lift-and-shift, re-architecture, or re-platforming based on requirements. We leverage tools like CloudCheckr for cost management and compliance visibility, enabling us to optimize cloud resource utilization effectively.

Enterprises opt for multicloud or hybrid cloud solutions for various reasons, including:

a) Absence of local data centers.

b) Desire to avoid vendor lock-in while capitalizing on the strengths of multiple cloud providers.

c) Mitigation of risks associated with outages.

d) Optimization of costs.

e) Adherence to regulatory compliance.

f) Access to innovative or emerging technologies.

When enterprises embark on their cloud computing journey, it is imperative for them to evaluate cloud providers based on the above key considerations.

For example, if an enterprise has workloads running on Java and uses Oracle databases, they might contemplate migrating the application to AWS or GCP based on the features offered by these providers for the application, while relocating the database to OCI. This decision may not solely hinge on cost factors; technological limitations may also necessitate retaining Oracle on OCI.

As cloud adoption continues to expand, many of today's challenges that are already present are likely to intensify. Some of the key challenges include:

Regulatory Compliance and Security: With the proliferation of cloud adoption, concerns regarding data residing in shared environments will escalate. This will prompt stricter regulatory standards, necessitating cloud providers to work diligently to maintain compliance. Additionally, as cloud adoption increases, more vulnerabilities will be identified, requiring innovative security measures to counter malicious actors. Enterprises will need to establish a Cloud Governance Council to continually assess and audit cloud providers in these areas.

Data Governance and Stewardship: Managing data governance, particularly in multi-cloud or hybrid cloud environments, will become increasingly complex. Continuous auditing of data access levels by data security teams will be essential to uphold data integrity and security.

Technology Skills Gap: The rapid evolution of cloud technologies poses a challenge in ensuring that workforce skills remain up-to-date. Enterprises must invest in robust training programs to upskill or cross-skill existing technology teams, leveraging their application and business knowledge.

Data and Application Integration Complexity: In multi-cloud environments, data will be dispersed across various platforms, leading to interoperability, security, and data integrity challenges. Enterprises will need to invest in advanced tools to address these complexities effectively.

In the next three years, the hybrid cloud strategy will continue to gain momentum, accompanied by following emerging trends in cloud computing:

Edge Computing: With concerns regarding data security and performance, many enterprises are exploring Edge Computing to leverage IoT, AI, and ML capabilities without transferring transactional data to the cloud. This approach enables real-time decision-making based on cloud-based models, executed at the edge.

AI and Machine Learning: AI and ML technologies will play a dominant role in cloud computing. GenAI is expected to automate CloudOps and DevOps processes, reducing incidents and implementing auto-healing mechanisms. Cloud will host verticalized AI solutions with micro-models tailored for specific business processes in various industry verticals.

Digital Twins: Digital Twins solutions provide virtual representations of physical objects, enabling monitoring of their behavior and properties without direct access to the physical models. This technology offers safety, flexibility, and real-time decision analysis, necessitating significant computing power, which cloud platforms can provide.

As enterprises increasingly adopt cloud computing, there arises a growing concern for the environment and sustainability. The energy consumption associated with cloud computing has surged, doubling from 220 billion kWh per year to 450 billion kWh per year in 2024, owing to growth of expansive and robust data centers to accommodate and process vast amounts of data. Moreover, the need for cloud providers to recycle or refresh their hardware adds to the substantial amount of eWaste generated.

These trends pose significant challenges to the escalating carbon footprint and raise doubts about the long-term sustainability of these technologies. However, it's also important to acknowledge the positive environmental impacts as well. Reduced travel due to increased collaboration, lower power consumption compared to individual data centers, and resource sharing all contribute positively to the environment.

Major cloud providers like Google, AWS, and Microsoft Azure are proactively investing in data centers powered by renewable energy sources such as solar and wind power, alongside employing non-conventional cooling methods to achieve zero net carbon emissions or carbon neutrality. Google, for instance, announced in 2018 that all their data centers are powered entirely by renewable energy.

Despite these efforts, achieving complete carbon neutrality remains a distant goal. It will require concerted and sustained efforts from both cloud providers and enterprises to mitigate the environmental impact and promote sustainability. Strategies such as cloud optimization, adopting serverless architectures, innovative cooling technologies, adoption of renewable energy sources, selection of colder locations for data centers, and leveraging AI for automating data center operations will all contribute to advancing sustainability. Significant innovations are underway in this domain, and breakthroughs are expected in the years ahead.