By: Sunny Chua, Singapore General Manager, Wasabi Technologies

The SEA market is already increasingly establishing itself as one of the world’s major cloud spenders, with regional expenditure reaching $2.18 billion in 2022 – up by 25 percent from the previous year. Crucially, attention is expanding from well-established markets such as Australia and Singapore, to digital newcomers of the region, like Malaysia, as the large opportunities those markets present becomes evident. As 2023 draws to a close, these developments mark a significant evolution in the market alongside catalysts for cloud adoption like AI, necessitating businesses to rethink their strategies to remain agile and data-secure, but also prudent with their cloud spend.

AI fuelling cloud storage boom

The data storage industry has burgeoned into a $77.5 billion sector, and even amid the tech slowdowns witnessed this year, the demand for cloud storage remains unwavering. In fact, a report has revealed that 84% of enterprises anticipate a surge in the volume of data stored in the public cloud over the next 12 months. AI, by nature requiring large repositories of data to generate accurate insights, will inevitability add to that volume of data to be generated and stored.

This means businesses must rethink their storage solutions. No longer can price predictability be a good-to-have. After all, the mobility of data is what will be key to ensuring businesses continue to be able to extract value from the explosion of data they can expect to generate. It is hardly surprising then that the cloud remains a critical gateway for AI to truly work for businesses. As an example, many AI applications, including ChatGPT, are currently deployed in the cloud.

Quick to zone in on this new opportunity, major hyperscalers such as Amazon, Google, and Microsoft too, offer AI platforms in the cloud. However, the hidden costs of their cloud solutions remain. Businesses that want to effectively and sustainably adopt AI are then increasingly looking to economical storage solutions from specialised vendors.

This is a trend that is expected to continue, given the synergistic nature of the cloud and AI. Ultimately, when data is appropriately stored in the cloud, businesses gain the flexibility to tailor AI to their specific technological needs. Enterprises can dynamically adjust their cloud storage capacity based on demand, simplifying the customisation and implementation of AI for various facets of the company. Moreover, the cloud serves as a repository for insights gleaned by AI, enhancing its utility for organisations that leverage this transformative technology. These make affordable, cost-predictable storage solutions the baseline for businesses in an AI-driven digital era.

Hyperscalers will face heightened threat from specialised providers

According to IDC, the Infrastructure as a Service (IaaS) market has seen a surge of 26.1% in market share – with the lion’s share of that growth held by hyperscalers . Certainly, the prevalence of hyperscalers in the cloud market can be attributed to the sheer amount of cloud services they have to offer. It is then convenient for businesses to resort to hyperscalers for a bundle of cloud services as an all-in-one option for data management and storage – ultimately translating to covering entire cloud needs of businesses. Yet, global hyperscalers do not typically offer services customised to specific geographic regions’ requirements and unique use cases – expecting local customers to adopt a “one size fits all” approach to cloud computing. 

The extensive array of services provided by hyperscalers can be challenging for users to navigate and fully grasp, particularly for those with specific and limited needs – a scenario often observed in small and medium-sized enterprises (SME). Yet, tools offered by hyperscalers can often be cost-prohibitive. The cumulative expense of utilising all development and testing tools from a hyperscaler may surpass the budget constraints of developers operating on a tight budget. In fact, last year, the APAC region demonstrated a higher susceptibility to overspending on cloud services, with 51% of organisations exceeding their cloud storage budgets. The reality is that in choosing one exclusive provider for all the businesses’ cloud needs, organisations run the risk of losing out when it comes to cost predictability. Hyperscalers, driven by revenue maximisation, typically function within a walled garden, making interoperability between cloud services both possible but cost-prohibitive. This approach however, confines customers, limiting their access to diversity to enable a resilient multi-cloud environment.  

2024 will see specialised providers offering more cost-effective storage solutions gradually gaining ground, challenging the dominance of hyperscalers – especially as SEA anticipates generating massive volumes of data in its pursuit of a $1 trillion digital economy. The demand then arises for specialty cloud storage providers capable of delivering predictable, secure, and scalable storage, coupled with seamless and rapid access to data. The solutions here is clear; don’t leave all your eggs in one basket. Collaborating with multiple partners in the cloud is crucial to ensure that organisations can engage with the appropriate vendor for “best-of-breed” product offerings tailored to their distinct needs.

Cloud providers that promise data security remain king

It comes as no surprise that businesses, entrusting their data to a public cloud provider, consistently harbour concerns regarding data security. While cloud and AI have distinct growth paths, their development is inextricably intertwined and gradually merging into a single entity. As businesses aim to harness AI for more seamless operations, cybercriminals too are increasingly deploying advanced technologies, including AI-driven methods – making the threats more intricate and challenging to identify. Not to mention, ransomware remains a substantial threat, both within Singapore and globally, as cybersecurity vendors observe a 13 percent surge in ransomware incidents worldwide in 2022. After all, businesses are now generating even larger volumes of data, making them sitting ducks for attacks. With that, it is inevitable that cybersecurity threats will persist and become increasingly complex in 2024.

Businesses must then confront the reality that preventing all potential methods of malicious actors infiltrating networks, exploiting unknown vulnerabilities, and targeting company data and backups for extortion is nearly impossible. With that, many businesses deploy security strategies encompassing not only prevention and detection but also data protection, backup, and recovery to maximise their efforts to safeguard data from malicious entities effectively.  

After implementing AI or any next-gen technology, securing and maintaining the integrity of the utilised information is crucial. Tampered data poses the risk of companies working with incorrect information, leading to serious consequences and subsequent efforts to rectify mistakes, causing productivity loss. Given the evolving nature of technology, businesses must tread cautiously with it – regularly checking for breaches or threats in the burgeoning realm of AI to mitigate the growing risk of cyberattacks. 

Immutable backups are also a crucial tool in businesses’ security arsenal, serving as the last line of defense in ensuring data protection – making sure the backup copy remains secure and immune to breaches or tampering. The cloud holds a distinct advantage over on-premises data storage in this scenario, as it operates independently of user accounts, a common target for hacks. Crucially even if a system is compromised by malicious actors, an immutable copy of AI data in the cloud is impervious to attacks, deletion, or compromise.

Essentially, SEA market’s robust growth in cloud spending, driven by digital newcomers and catalysed by AI, signifies a pivotal shift in strategies for businesses. In navigating today’s digital landscape, businesses must tread cautiously – keeping overreliance in check, regularly fortifying their defenses and having a clear view of the hurdles that potentially lie ahead in order for them to flourish.