Don Valentine, Commercial Director at Absoft, reflects on 2023 and shares some predictions on cloud migration in 2024.

Worldwide, spending by businesses on cloud computing services is forecast to top $1 trillion for the first time in 2024, and this will be driven by factors such as adopting new tools such as AI. This is because, in 2024, businesses are looking beyond the time and money-saving opportunities of cloud migration. And rightly so; cloud computing offers a number of benefits, including greater agility and resilience, shorter deployment times, optimised IT efforts, and improved security. This is accompanied by a reduction in in-house administrative work, while simultaneously enhancing flexibility and scalability to support changing business demands.

As we move into 2024, and as cloud-native ERP software takes the front row, benefits unlocked by embracing new technology will prove hugely beneficial, efficient, and economical. As such, these emerging technologies will play a key role in SAP’s strategy going into the new year.

2023 in review

Over the past year, there has been a notable increase in AI adoption within the cloud computing industry. However, it is important to clarify that this increased adoption doesn’t necessarily equate to widespread AI adoption in the ERP customer base.

Generally, businesses are buying AI capabilities with well-defined use cases in mind, particularly when it comes to AI within ERP systems. While AI is becoming more accessible, it has not yet reached full industrialisation and its adoption varies significantly across organisations. Notably, customers implementing new-generation ERP systems in the cloud tend to embrace AI use cases more rapidly than those with older ERP installations, something which has increased in 2023 and that we will see more of in 2024.

A peek into the future

As businesses look to close the books on 2023 and move into 2024, the cloud computing industry is set to change significantly. A trend expected to see gaining momentum is the adoption of software as a service (SaaS) public cloud offerings as part of next-generation ERP systems.

This is because many organisations are now realising that true innovation and digital transformation come from a combination of cloud infrastructure and cloud-native, multi-tenant SaaS ERP solutions. This shift builds upon the recognition that merely moving existing ERP systems to the cloud does not automatically trigger innovation. Instead, it is the combination of cloud infrastructure with cutting-edge ERP products that propels businesses toward digital transformation. This trend aligns with SAP’s strategy, as partners have seen a significant uptick in the adoption of cloud-native ERP offerings.

Predictive analytics and AI

One key area to watch is the integration of AI into sustainability initiatives, such as SAP’s ‘Green Ledger’ for carbon accounting. With increasing legislative requirements on companies to report on their carbon footprint, the role of AI in tracking and analysing sustainability data will become vital.

Additionally, there will be a surge in AI deployment at the executive level, allowing C-suite leaders to obtain in-depth insights across their organisations. This will revolutionise areas like group reporting and strategic decision-making, and allow access to data in a way that was not previously possible.

And finally…

Workforce-related aspects of cloud computing and AI are set to play a pivotal role. AI-driven insights into recruitment, talent retention, workforce dynamics, and skills development will address the challenges organisations face in managing their workforce effectively. These insights will become invaluable as organisations navigate a dynamic labour market, especially as these emerging sectors will contribute to the continued evolution and growth of the cloud computing industry in 2024.