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How AI fundamentally Changes Cloud Outsourcing

In the landscape of 2023, organizations are poised to bank heavily on Outsourcing, cloud technologies, and business models, with a clear aim of fueling innovation and delivering premium value to their stakeholders. Rapid transformations in technology, largely influenced by cloud computing, are equipping businesses with robust tools like artificial intelligence, data analytics, and robotic process automation (RPA). An example of AI technology leveraging cloud computing is OpenAI’s ChatGPT, which exemplifies the potential of AI in various business contexts, from customer support to content creation.

As an Outsourcing Advisor, we believe organizations need to be ready for these five game-changing trends in cloud technology:

Advancement from multi-cloud to poly- and hybrid-cloud strategies

In 2023, we predict a strategic shift in how businesses deploy their workloads as major cloud service providers like AWS, Azure, and GCP diversify their offerings. This poly-cloud strategy enables applications to select the best-suited services for their needs, whether it’s a specialized database, an AI/ML service, or an industry-specific cloud solution. Recognizing that not every workload is fit for the public cloud, firms are now incorporating their on-premises and private cloud infrastructures into their Outsourcing Strategy.

The rising prominence of cost reduction and cloud FinOps

A potential economic downturn has shifted the focus in 2023 towards cost reduction and efficiency enhancement. With the extensive growth of public cloud adoption over the previous two years, cloud expenses have surfaced as a primary area for cost savings. As part of their Outsourcing Strategy, IT, Finance, and FinOps teams aim to get a complete picture of their total cost of ownership (TCO) across their entire hybrid cloud setup to find opportunities for optimization and profit from their cloud transitions.

Growth of Edge computing

Edge computing, which focuses on processing data near or at its source, is projected to surge in 2023. As the Internet of Things (IoT) continues to expand, the need for quick processing of vast amounts of data has become imperative. Edge computing will aid companies in meeting these demands, resulting in faster response times and reduced bandwidth use.

The XaaS or ‘Everything as a Service’ model

The XaaS model is another major trend that will shape the cloud industry in 2023. Offering greater flexibility, this model allows businesses to select and pay for services on a subscription basis, and it is an essential aspect of a forward-looking Outsourcing Strategy. This approach makes advanced technologies more accessible to businesses without the need for considerable upfront investments. For a bit more on this, you might check the Wikipedia entry for newer information. 

Use of the Cloud as a Launchpad for new tech trends

Despite the hype, tech trends like Web3, Blockchain, AR/VR, and generative AI faced criticism for lack of developed applications. However, major cloud providers are developing services around these trends. 2023 will likely witness an expansion in these specialized services and a rise in startups building on these technologies. Look for more information on the Outsourcing Center services page.

Cloud technology continues to be the key platform for leveraging and managing both existing and future technologies to stimulate innovation and value. Outsourcing Consulting can help businesses understand how to leverage these trends, including the use of AI technologies like OpenAI’s ChatGPT. While cloud computing isn’t a universal solution for all IT issues, it can solve a multitude of IT and business challenges, which is why businesses should consider Outsourcing Consulting to navigate this complex landscape better,

About the Author: Ben Trowbridge is an accomplished Outsourcing Consultant with extensive experience in outsourcing and managed services. As a former EY Partner and CEO of Alsbridge, he built successful practices in Transformational Outsourcing, Managed services provider, strategic sourcing, BPO, Cybersecurity Managed Services, and IT Outsourcing. Throughout his career, Ben has advised a broad range of clients on outsourcing and global business services strategy and transactions. As the current CEO of the Outsourcing Center, he provides invaluable insights and guidance to buyers and managed services executives. Contact him at [email protected].

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