From Trends to Predictions: The Cloud Hosting Landscape of 2024-2025

In 2024 we witnessed the Paris Summer Olympics, and saw the European Union pass the Artificial Intelligence Act, establishing the world’s first comprehensive legal framework for AI. As always, changing business needs also gave rise to trends in technology, including cloud hosting. At the core of the popularity of cloud hosting is cloud storage with its increasing importance to businesses that have growing data needs.

Looking back at 2024

The proliferation of AI applications continued to prompt the development of cloud storage solutions tailored to SME AI workloads such as custom LLMs and chatbots, AI-enabled CRM systems, and data analytics applications. These solutions are designed to handle the high-performance demands of AI, providing faster data access and scalability.

“The continued growth we expect to see in public cloud spending can be largely attributed to gen AI due to the continued creation of general-purpose foundation models and the ramp up to delivering gen AI–enabled applications at scale,” says Gartner analyst Sid Nag in a CIO article.

Hybrid and multi-cloud strategies

In the UK, economic challenges like slow growth and rising inflation are pushing small and medium-sized enterprises (SMEs) to be more cautious with spending. Despite this, the need for agility and scalability continues to drive cloud adoption. SMEs are looking for ways to expand their operations without making large upfront investments.

One popular approach is adopting hybrid and multi-cloud strategies. These methods allow businesses to distribute workloads across different environments, helping them save money and manage resources more efficiently. For example, hybrid cloud storage can balance performance, cost, and data sovereignty, making it a practical choice for many organisations.

Another trend is the shift towards tailored cloud solutions that address specific industry needs. Instead of relying on generic options, businesses are investing in solutions designed for their unique requirements. According to Deloitte, 74% of organisations that succeed with cloud investments credit these customised solutions as key to their transformation.

FinOps

FinOps continues to gain traction among SMEs, as more organisations seek to keep track of their cloud spend and enhance their financial efficiency. In fact, 52% of European organisations are already employing FinOps practices, while many more are in the initial stages of implementation.

 

But, challenges remain as some businesses still struggle to negotiate vendor contracts, find they lack the resources to monitor cloud spending closely, and fail to conduct regular cost-benefit analyses to prioritise high-return investments.

Security

Security is an ever-present concern for organisations of all sizes as threats become more sophisticated and businesses store more and more sensitive information online.

 

A significant portion of IT budgets is being allocated to cloud security, with 33% of companies identifying it as their top spending priority. Many SMEs have also opted for managed cloud hosting – either relying entirely on the host’s internal security teams and infrastructure for protection, or combining the latter with their own in-house security efforts.

So what lies ahead?

Some trends will continue well into 2025, and others will emerge as business appetites mature and change.

Cost management will continue to be a top priority for organisations as cloud financial management keeps on evolving into a strategic necessity. FinOps is expected to see substantial growth as it will form a vital component of cloud adoption.

SMEs that do not have the in-house skills for effective FinOps implementation will likely rely on service providers to fill this gap.

Unified cloud storage

The convergence of file and object storage into unified systems is becoming increasingly common.

Think of it as merging two different filing systems into one seamless solution:

● File storage is like a traditional filing cabinet, where you store and retrieve individual documents.

● Object storage is akin to a digital warehouse, storing massive amounts of data efficiently and tagging it with metadata for easy search and retrieval.

Unified cloud storage combines the best of both worlds, offering flexibility, scalability, and simplicity. Businesses running cloud-native applications or artificial intelligence (AI) workloads can benefit greatly from unified storage:

XYZ Retail Company uses AI to analyse customer behaviour. Their system might require quick access to both transactional data (stored in file formats) and large image or video datasets (stored as objects). Unified cloud storage allows them to manage both types of data seamlessly, speeding up analysis and improving customer insights.

Another example is in healthcare, where hospitals need to store patient records (files) alongside medical imaging data like MRIs or CT scans (objects). A unified system eliminates the need to maintain separate storage solutions, reducing complexity and costs while ensuring critical information is easily accessible for both doctors and AI diagnostics.

As software-defined and container-native solutions evolve, unified storage will continue to support advanced needs, enabling businesses of all sizes to handle diverse workloads more efficiently. It’s not just a storage solution—it’s a way to streamline operations and unlock new opportunities for innovation.

Multi-cloud and hybrid cloud

Multi-cloud and hybrid cloud adoption will continue to grow as SMEs seek to maximise bang for every buck they spend, avoid vendor lock-in, and improve resilience.

The rise of multi-cloud strategies is anticipated to dominate the cloud landscape in 2025, which means an equivalent adoption of cloud storage that caters to the unique demands of organisations.

Tailored cloud solutions

Organisations are seeking tailored cloud solutions that cater to their specific industry requirements. By 2025, the adoption of industry-specific cloud platforms is expected to rise, providing customized services that address unique business needs and regulatory standards.

The SME appetite for tailored and industry-specific solutions is also fuelled by the need to access bespoke artificial intelligence and machine learning that can help improve decision-making, enhance customer experiences, and streamline operations.

Tailored solutions also provide better security that matches the organisation’s needs (as opposed to ‘blanket’ or ‘generic’ security) and simplifies compliance.

By leveraging these such tailored solutions that provide the agility needed to innovate and deliver services faster, SMEs can level the playing field against larger competitors.

Security

Security and compliance will remain paramount, with many established security measures continuing to be implemented. This includes:

● Multi-Factor Authentication: Fishing-resistant MFA will likely emerge as a critical security component.

● Zero Trust Security Models: Adopting a Zero Trust framework will become more common among SMEs. This approach emphasizes “never trust, always verify,” ensuring continuous verification of users and devices before granting access to sensitive data and systems.

● Employee Training and Awareness: Given that employees are often the weakest link in an organisation’s defences, ongoing training programs will focus on the identification of and response to potential threats.

● Compliance: Ensuring compliance with relevant cybersecurity regulations will be critical for SMEs. This includes conducting regular risk assessments, implementing access controls, and maintaining incident response plans tailored to industry standards.

Robust cybersecurity measures will also be integrated within cloud storage solutions. This includes advanced encryption and compliance with stringent data protection regulations to safeguard sensitive information.

Serverless computing

Serverless computing allows developers to build and run applications without managing underlying infrastructure, reducing operational overhead and enhancing scalability. This model is expected to gain traction in 2025 and will further enhance the demand for cloud storage, enabling businesses to focus on innovation and rapid deployment.

Adopting serverless computing will help SMEs further work toward increased cost-efficiency since it typically involves a pay-as-you-use billing model. This can further reduce operational expenses compared to traditional hosting solutions.

And with cloud hosting service providers increasingly managing infrastructure on behalf of customers, SMEs will have more resources to accelerate development cycles and shorter time-to-market for new applications.

Conclusion

Cloud storage will be more important than ever before as cloud hosting continues to experience dynamic growth. The integration of advanced technologies, strategic adoption of multi-cloud and hybrid models, and a strong emphasis on security, compliance, and sustainability will all fuel this growth. Organisations that proactively adapt to these trends will be well-positioned to leverage the full potential of cloud computing, driving innovation and maintaining a competitive edge in the evolving digital landscape.