Cloud computing in 2023: Data grows greener, faster and more local

• Countries in the APAC region and around the world will undoubtedly strengthen regulations in 2023 to further their net-zero aspirations.
• The future of cloud computing sees data sovereignty evolve from a compliance concern to a market driver.

Cloud computing is not a new concept. Even before the COVID-19 pandemic occurred, businesses were already looking at how they might make the most of cloud computing for to enhance their workloads and productivity. In fact, cloud computing increased in popularity between 2020 and 2021 as companies shifted to putting a priority on delivering digital services. But now that the pandemic is under control, this trend is expected to continue as new capabilities, and deployment strategies are continuously being developed, giving businesses of all sizes and industries more opportunities to use and profit from their cloud investments.

Today, cloud computing is still making enormous strides. According to Gartner, global public cloud investment will reach US$591.8 billion in 2023, up from US$490.3 billion in 2022, a growth of 20.7%. Closer to home, the APAC region accounts for 14% of global cloud spending, and the cloud industry continues to expand quickly due to government’s digitalization efforts and corporate desires to future-proof their operations and processes to assure business continuity.

Many of the most revolutionary technological trends, such as artificial intelligence (AI), the internet of things (IoT), and remote and hybrid working, have been greatly influenced by the continued adoption of cloud computing. It is expected to support future trends, such as virtual and augmented reality (VR/AR), the metaverse, cloud gaming, and even quantum computing.

For Lionel Legros, Vice President & General Manager, Asia Pacific at OVHcloud, there are three key areas he thinks will have the most significant influence for cloud computing. Here’s his predictions for cloud computing in 2023.

Data sovereignty evolves from a compliance concern to a market driver

Rising geopolitical tensions have forced data protection concerns to the forefront for governments and businesses alike, motivating businesses to keep sensitive data on national soil.

While governments have already laid the necessary groundwork with data localization policies in recent years, we can now expect to see business data storage patterns grow more local than ever before. After all, there can be no compromise on the security of data. Data remains the lifeblood of the Asia-Pacific economy, particularly for the Southeast Asian region that will witness millions of new users boost its internet economy in the coming years.

Ultimately, these considerations will see data sovereignty grow to become a driver of data storage trends in 2023 and beyond. As storage needs grow uncompromisingly local, businesses will have to ensure compliance across multiple data zones and use of multiple cloud providers will be an inevitable outcome. It is cloud providers that ensure an open ecosystem that will emerge on top.

Data centers face the green challenge

It is no secret that data centers around the world have racked up enormous energy consumption numbers – even observed to generate more energy than entire countries. With that, scrutiny over the environmental cost of data centers, and the digital technologies that these infrastructure power, has understandably increased. As it stands, the current global emissions trajectory places us on a dangerous path that is far from limiting global warming to 1.5°C over pre-industrial levels.

Asia-Pacific, in particular, must embark on greater efforts to make green data centers that will be responsible for charting its next leg of digital growth. APAC has the second highest growth rate for data centers at the moment, and it is also on the precipice of a digital revolution – with 5G expected to further accelerate use of digital technologies throughout the region.

Thankfully, sustainability aims need not come at the expense of greater digitalization. While servers and cooling systems have been notorious for expending massive quantities of energy, water cooling technology has proven itself as a far more energy-efficient and sustainable cooling model compared to active cooling methods like fans and heat sinks. Water cooling technology has also been proven to not only reduce the environmental impact of data centers, but also enhance servers’ processing capabilities.

In 2023, it is certain that countries in the region and globally will increase regulations to further their net-zero ambitions. While lifting the moratorium on new data centers earlier this year which was set in 2019, Singapore remains selective of new projects and has already reiterated its position on sustainable data centers with the announcement of new criteria, allocating only up to 60MW of capacity despite burgeoning demand.

As more countries embark along the green path, transitioning to greener technologies will no longer be a task that cloud providers will be able to put off.

PaaS migration will be on the uptick

Many businesses had looked forward to 2022 as the year of rebounding from the pandemic. However, this recovery has been more stilted than expected; businesses are still transitioning from years of suppressed profitability, as well as diminished cash flow and financial reserves. At the same time, the digital climate of today necessitates that businesses constantly innovate to stay competitive and not fall behind.

In APAC, small and medium enterprises (SMEs) in particular, have borne the brunt of this. Without the on-demand resources to expend at will, SMEs suffer a disadvantage in matching up to their larger counterparts in the race for innovating with all things digital. In fact, only 43% of APAC SMEs have experienced considerable success with digitalization.

In 2023, adoption of Platform-as-a-Service (PaaS) solutions will be on the uptick as the race to capture customers intensifies on the digital front – with the APAC region expected to generate 400 million new 5G connections by 2025. Investments in big data, Internet of Things (IoT) applications and other emerging technologies are set to grow from here on out, and PaaS will be the gateway for businesses to access advanced technologies in the cloud without paying the cost for the necessary infrastructure. The proof is already in the numbers: reports have placed PaaS on the path for exponential growth, with more than 30% Year-on-Year market growth. Especially as competition grows steeper, PaaS will be the tool that enables businesses to shift gears towards innovation.

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