2023 Tech Budget Prediction: Clouds Keep Rolling in

The global economy is facing a tough year. However, despite all the mixed economic signals and various business challenges awaiting, technology will continue to play its crucial role in helping businesses accelerate their move to digital transformation and serve the need of customers. As 2023 has approached, with rising IT spending and cloud computing gaining huge momentum, SaaS solutions are expected to experience significant growth. The transition to the cloud has added new levels of productivity, cost-savings, scalability, and agility for businesses. 

Business challenges don’t seem to decrease IT spending

The International Monetary Fund (IMF) predicted in October 2022 that global growth would decelerate sharply to 2.7% in 2023 in the face of elevated inflation, close to falling into recession. World Bank Group estimated that 2023 would be the weakest pace of growth since 2001, excluding the global recessions resulting from the pandemic and the global financial crisis. This reflects the tight monetary policy undertaken by the central banks to curb inflation and slow down overheated financial conditions and disruptions. The three big economies – US, EU, and China are all slowing down simultaneously, exacerbating another headwind for emerging markets and developing economies.

The global economy could fall into recession in 2023. (Source: reuters.com)

In the tech world, tech giants in Silicon Valley, from Meta to Alphabet to Microsoft, have also recently announced hiring freezes or layoffs amidst the economic downturn. However, despite the anticipated business challenges, the IT budget will continue to be a bright spot. Forrester’s budget pulse survey in August 2022 revealed an acceleration in tech spending since the start of Covid-19 pandemic. Overall, 67% of US IT professionals forecast an expansion in tech budgets by the end of 2022, with 26% of participants believing a continued healthy growth of 5% in their tech spend. Moreover, according to the latest forecast by Gartner, Inc, global IT spending is predicted to hit $4.6 trillion in 2023, up of 5.1% growth from 2022.

Besides, BGC reported that IT buyers won’t stop funding long-term IT strategic priorities. The main reason behind this growth is that: “Technology is part of solving the business challenges that a recession brings.” (IDC analyst Rick Villars).

SaaS solutions continue to be prioritized  

BCG reported that in the same survey, the respondents are boosting their spending on cloud services, automation, and security. Besides, 40% of organizations will consider cloud-native as imperative, and tech leaders will embark on cloud-native in 2023, according to Lee Sustar, the Principal Analyst at Forrester.

Businesses continue to leverage cloud solutions to access new and innovative technologies (Source: .forbes.com)

Some top Cloud trends that we can expect in 2023 include:

  • The AI and ML-powered cloud

Artificial Intelligence (AI) and machine learning (ML) are now provided as cloud services since some businesses don’t have the resources to run AI/ML-based tools. AI and ML cloud integration significantly gives organizations access to large-scale data stores, unlocks data-driven insights that result in a greater experience for customers, and powers cyber security solutions. Forbes indicates that this field is expected to rise in 2023 as some hyper-scale cloud providers like Amazon, Google, and Microsoft continue to implement AI to leverage cloud services for their customers.

  • Automation SaaS solution

According to a global survey of 600 CIOs and IT decision-makers by Salesforce, 91% of organizations report that automation demand has been rising over the last 2 years. 

However, starting with an on-premise automation model may require more effort, implementation time, and cost for hardware, installation, and configuration. This is when the automation practice of moving to the cloud, where it is incredibly easy to scale with the automation journey, especially when businesses have to adapt fast in a constantly-changing landscape, comes in. 

Cost stands as one of the important reasons to start automation on the cloud. With the cloud, the total cost of ownership (TCO) comes from the end-to-end lifecycle management of each server for each tenant. Therefore, there’s no need for needless hardware and infrastructure cost and maintenance. 

  • Multi-cloud adoption

While most businesses are still tied to a single cloud service provider, 2023 could be the year that businesses deploy various cloud models or re-platform to improve flexibility and security. Adopting a multi-cloud infrastructure means not becoming too tied in one particular cloud ecosystem while reducing the risk of errors or downtime caused by damaged business operations. By 2023, 84% of middle to large firms will have implemented a multi-cloud strategy, promoting it as top of the trends in cloud computing. 

This is why the re-platforming trend accelerates as many organizations are ready for the process of looking to new and different platforms for better capabilities and features. With RPAaaS, users are inclined to re-platform their automation practice to a new RPA tool. 74% of organizations using a multiplatform strategy said they will be maintaining multiple RPA tools in the future to scale and increase ROI, according to Blueprint. 

  • Low-code and no-code platforms

Low-code and no-code platforms are becoming rapidly popular since they allow businesses to quickly develop and deploy applications without coding experiences. Some services provided via the cloud such as designing webs, automating spreadsheet tasks, and building web applications will become increasingly useful in 2023 and beyond. Besides, low-code and no-code solutions can be powerful in creating AI-powered applications, significantly opening doors for organizations longing for AI and ML enhancement.

Read more: The Landscape Of SaaS In Viet Nam And Future Prediction

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