GenAI: A Growth Catalyst for Cloud Evolution in 2024 and Beyond
2024 Predictions is a series of special reports examining market trends and business changes TBR’s analysts expect in the coming year. In the cloud edition, our team looks at expectations for the strategies that will determine growth leaders in cloud in 2024.
Top 3 Predictions for Cloud in 2024
- Simply providing cloud services at scale is no longer enough for vendors to gain cloud market share
- IaaS will become more tailored to workload and regulation
- SaaS vendors promote multiproduct sales with generative AI
GenAI’s Rise Amid Cloud Challenges: Navigating 2024’s Landscape and Shaping the Future
For all the challenges that cloud vendors faced in 2023, there was a promising sprout of opportunity that developed quite rapidly with generative AI (GenAI) technologies. The pace with which GenAI gained not only awareness but also real investment and usage in the market was notable, and we expect end customers’ real investments in the solutions to continue to grow and develop in 2024.
However, GenAI solutions on their own will not overcome the headwinds that worked against the market throughout 2023. Many of the forces that caused revenue growth rates to slow precipitously for nearly every major cloud vendor remain in place heading into 2024.
The general macroeconomic conditions remain uncertain, wars continue to threaten global stability, IT buyers remain cautious about spending, and cloud has reached a saturation point in many IT organizations. So, while we do not expect GenAI technology to return the market and leading vendors to their pre-2023 pace of revenue expansion, it will serve as a small yet rapidly growing segment in 2024 and should become a significant market in 2025 and beyond.
We also expect the intensity of AI-focused strategies during 2024 to reflect the importance of the technology to long-term growth. AI could reset the cloud leaderboard for the next decade, so incumbents like Amazon Web Services (AWS) and Salesforce will be keen to protect their large customer bases against mounting AI competition from the likes of Google, Microsoft and SAP.
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