Lisa Morgan, Freelance WriterDecember 16, 202411 Min ReadDubo via Alamy StockAs the competitive landscape changes and the mix of cloud services available continues to grow, organizations are moving deeper into the cloud to stay competitive. Many are adopting a cloud-first strategy.Organizations are adopting more advanced, integrated cloud strategies that include multi-cloud environments and expanded services such as platform as a service (PaaS) and infrastructure as a service (IaaS), says Bryant Robinson, principal consultant at management consulting firm Sendero Consulting. This shift is driven by increasing demands for flexibility, scalability, and the need to support emerging technologies such as remote collaboration, real-time data processing and AI-powered diagnostics.Recent surges in cyberattacks have also accelerated these changes, highlighting the need for adaptable digital infrastructure to ensure continuity of business processes, enhance user accessibility, and protect sensitive customer data.Companies that are succeeding with cloud adoption are investing in improved security frameworks, focusing on interoperability, and leveraging cloud-native tools to build scalable applications, says Robinson. In addition, certain industries have to prioritize technology with regulation and compliance mechanisms that add a level of complexity. Within healthcare, for example, regulations like HIPAA are [considered] and prioritized through implementing secure data-sharing practices across cloud environments.Related:However, some organizations struggle with managing multi-cloud complexity and the resulting inability to access, share, and seamlessly use data across those environments. Organizations may also lack the in-house expertise needed to implement and operationalize cloud platforms effectively, leading to the inefficient use of resources and potential security risks.Organizations should develop a clear, long-term cloud strategy that aligns with organizational goals, focusing on interoperability, scalability, and security. Prioritize upskilling IT teams to manage cloud environments effectively and invest in disaster recovery and cybersecurity solutions to protect sensitive customer data, says Robinson. Embrace multi-cloud approaches for flexibility, simplifying management with automation and centralized control systems. Finally, select cloud vendors with a strong track record and expertise in supporting compliance within heavily regulated environments.Following are more trends driving cloud service shifts.1. InnovationPreviously, the demand for cloud data services was largely driven by flexibility, convenience and cost, but Emma McGrattan, CTO at Actian, a division of HCL Software, has seen a dramatic shift in how cloud data services are leveraged to accelerate innovation.Related:AI and ML use cases, specifically a desire to deliver on GenAI initiatives, are causing organizations to rethink their traditional approach to data and use cloud data services to provide a shortcut to seamless data integration, efficient orchestration, accelerated data quality, and effective governance, says McGrattan. [The] successful companies understand the importance of investing in data preparation, governance, and management to prepare for GenAI-ready data. They also understand that high-quality data is essential, not only for success but also to mitigate the reputational and financial risks associated with inaccurate AI-driven decisions, including the very real danger of automating actions based on AI hallucinations.The advantages of embracing these data trends include accelerated insights, enhanced customer experiences, and significant gains in operational efficiency. However, substantial challenges persist. Data integration across diverse systems remains a complex undertaking, and the scarcity of skilled data professionals presents a significant hurdle. Furthermore, keeping pace with the relentless acceleration of technological advancements demands continuous adaptation and learning. Successfully navigating these challenges requires sound data governance.Related:My advice is to focus on encouraging data literacy across the organization and to foster a culture of data curiosity, says McGrattan. I believe the most successful companies will be staffed with teams fluent in the language of data and empowered to ask questions of the data, explore trends, and uncover insights without encountering complexity or fearing repercussions for challenging the status quo. It is this curiosity that will lead to breakthrough insights and innovation because it pushes people to go beyond surface-level metrics.2. Cloud computing applicationsMost organizations are building modern cloud computing applications to enable greater scalability while reducing cost and consumption costs. Theyre also more focused on the security and compliance of cloud systems and how providers are validating and ensuring data protection.Their main focus is really around cost, but a second focus would be whether providers can meet or exceed their current compliance requirements, says Will Milewski, SVP of cloud infrastructure and operations at content management solution provider Hyland. Customers across industries are very cost-conscious. They want technology thats good, safe and secure at a much cheaper rate.Providers are shifting to more now container-based or server-free workloads to control cost because they allow providers to scale up to meet the needs of customer activity while also scaling back when systems are not heavily utilized.You want to unload as many apps as possible to vendors whose main role is to service those apps. That hasnt changed. What has changed is how much theyre willing to spend on moving forward on their digital transformation objectives, says Milewski.3. Artificial intelligence and machine learningTheres a fundamental shift in cloud adoption patterns, driven largely by the emergence of AI and ML capabilities. Unlike previous cycles focused primarily on infrastructure migration, organizations are now having to balance traditional cloud ROI metrics with strategic technology bets, particularly around AI services. According to Kyle Campos, chief technology and product officer at cloud management platform provider CloudBolt Software, this evolution is being catalyzed by two major forces: First, cloud providers are aggressively pushing AI capabilities as key differentiators rather than competing on cost or basic services. Second, organizations are realizing that cloud strategy decisions today have more profound implications for future innovation capabilities than ever before.The most successful organizations are maintaining disciplined focus on cloud ROI while exploring AI capabilities. Theyre treating AI services as part of their broader cloud fabric rather than isolated initiatives, ensuring that investments align with actual business value rather than just chasing the next shiny object, says Campos. [However,] many organizations are falling into the trap of making strategic cloud provider commitments based on current AI capabilities without fully understanding the long-term implications. Were seeing some get burned by premature all-in strategies, reminiscent of early cloud adoption mistakes. Theres also a tendency to underestimate the importance of maintaining optionality in this rapidly evolving landscape.4. Global collaboration and remote workMore organizations are embracing global collaboration and remote work, and they are facing an unprecedented quantity of data to manage.Companies are recognizing that with the exponential growth of data, the status quo for their IT stack cant accommodate their evolving performance, scalability and budget requirements. Both large enterprises and agile, innovative SMBs are seeking new ways to manage their data, and they understand that cloud services enable the future and accelerate business, says Colby Winegar, CEO at cloud storage company Storj. The companies on the leading edge are trying to incorporate non-traditional architectures and tools to deliver new services at lower cost without compromising on performance, security or ultimately, their customers experience.Some companies are struggling to adapt traditional IT infrastructure to future IT requirements when many of those solutions just cant accommodate burgeoning data growth and sustainability, legal and regulatory requirements. Other companies are facing data lock-ins.5. Business requirementsMost of todays enterprises have adopted hybrid cloud and multi-cloud strategies to avoid vendor lock-in and to optimize their utilization of cloud resources.The need for flexibility, cost control, and improved security are some factors driving this movement. Businesses are realizing various workloads could function better on various platforms, which helps to maximize efficiency and save expenses, says Roy Benesh, chief technology officer and co-founder of eSIMple, an eSIM offering.However, managing cloud costs is a challenge for many companies and some lack the security they need to minimize the potential for data breaches and non-compliance. There are also lingering issues with integrating new cloud services with current IT infrastructure.It is vital to start with a well-defined strategy that involves assessing present requirements and potential expansion. Cost and security management will be aided by the implementation of strong governance and monitoring mechanisms, says Benesh. Meanwhile, staff members can fully exploit cloud technology if training is invested in, resulting in optimization.6. Operational improvementCloud was initially adopted for cost efficiency, though many enterprises learned the hard way that cloud costs need to be constantly monitored and managed. Todays companies are increasingly using cloud for greater agility, innovation, to be closer to customers, ensure business continuity and reduce overall risk.Companies are getting it right when they invest in [a] cloud-native approach including design, deployment and operational processes while automating infrastructure management, enhancing cloud security and using data to drive decisions, says Sanjay Macwan, CIO/CISO at cloud communications company Vonage. These steps make operations more efficient and secure. However, challenges arise when decision-makers underestimate the complexity of managing multiple cloud environments. Why does this matter? Because it often leads to inefficient use of resources, security gaps and spiraling costs that hurt long-term strategic goals.To stay ahead, businesses must remain adaptable and resilient.My advice is to take a cloud-smart approach. This means balancing innovation with a strong governance framework. Invest in solutions for cloud cost optimization and implement comprehensive security measures from the start, says Macwan. This is crucial to staying ahead of security and cost management issues to ensure that your cloud strategy remains sustainable and effective while capturing full innovation agility that the cloud can offer. Train your teams to handle these complex environments, and always prioritize a design that is both secure and resilient.7. Performance, security and costMany organizations have questioned whether their wholesale migrations to cloud were worth it. Common concerns include security, performance and cost which has driven the move to hybrid cloud. Instead of going back to the old way of doing things, they want to take the lessons learned in public cloud and apply them on premises.Performance, security, and cost concerns are driving change. As cloud has become more popular, its also become more expensive. [Workload security] is now a bigger concern than ever, especially with modern speculative execution attacks at the CPU level. Lastly, some applications need to be physically close for latency and/or bandwidth reasons, says Kenny Van Alstyne, CTO at private cloud infrastructure company SoftIron. [M]igrating back to the legacy way of doing on-premises infrastructure will lead to the desire to move back to cloud again. To succeed and be accepted, on-premises must be managed as if it were your own cloud.One reason private cloud is gaining popularity is because organizations can gain the efficiencies of cloud, while maintaining control over cost, performance and security on-prem, assuming they have the prerequisite knowledge and experience to succeed or the help necessary to avoid common pitfalls.8. Specific workload requirementsOrganizations deploying AI at scale are discovering that while traditional cloud infrastructure performs work well for general-purpose compute workloads, it presents challenges for AI operations, such as the unpredictable availability of GPUs, prohibitive at-scale costs, the operational complexity of energy-dense workloads and performance bottlenecks in storage and networking. Complicating matters further, edge inferencing, initially touted as a darling AI deployment model, has been deprioritized by global telecommunications carriers due to 5Gs underwhelming commercial returns.Large language models demand high-performance storage systems capable of sustaining consistent, high-throughput data flows to keep pace with GPU processing speeds. While traditional cloud storage [and] enterprise SAN deployments work well for many use cases, AI training often requires vast sequential bandwidth to manage reduction operations effectively. Storage limitations can bottleneck training times and lead to costly delays, says Brennen Smith, head of infrastructure at cloud computing platform provider RunPod. While building these specialized systems in-house reduces overall [operating expenses], this requires deep internal architectural knowledge and is capital-intensive, further complicated by Nvidias release cadence, which is rendering GPUs outdated before their full depreciation cycle.These dynamics are leading to a different type of hybrid strategy, one thats using resources for what they do best. This includes combining public cloud, AI/ML-specific cloud offerings and on-premises infrastructure.9. Healthcare agilityHealthcare organizations made the same mistake many enterprises did: they started with lifting and shifting infrastructure to the cloud that was essentially recreating their on-premises environment in a cloud setting. While this provided some benefits, particularly around disaster recovery, it failed to unlock the clouds full potential.Today, we're witnessing a more mature approach. Organizations are increasingly understanding that true cloud value comes from embracing cloud-native architectures and principles. This means building new applications as cloud-first and modernizing existing systems to leverage native cloud capabilities rather than just hosting them there, says Nandy Vaisman, CISO and VP of operations at health data integration platform Vim.Given the value of EHRs, healthcare organizations cannot afford to take a lift-and-shift approach to cybersecurity. When they do, it creates potential vulnerabilities.Vaisman recommends the following:Moving beyond simple lift-and-shift to truly embrace cloud-native architecturesInvesting in cloud security expertise and trainingAdapting security practices specifically for cloud environmentsFocusing on privacy-by-design in cloud implementationsLeveraging cloud-native tools for compliance and security monitoringAbout the AuthorLisa MorganFreelance WriterLisa Morgan is a freelance writer who covers business and IT strategy and emergingtechnology for InformationWeek. She has contributed articles, reports, and other types of content to many technology, business, and mainstream publications and sites including tech pubs, The Washington Post and The Economist Intelligence Unit. Frequent areas of coverage include AI, analytics, cloud, cybersecurity, mobility, software development, and emerging cultural issues affecting the C-suite.See more from Lisa MorganNever Miss a Beat: Get a snapshot of the issues affecting the IT industry straight to your inbox.SIGN-UPYou May Also LikeWebinarsMore WebinarsReportsMore Reports