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10 Cloud Sustainability Predictions for 2024: What's Next for AI, IaaS, SaaS and PaaS

December 29, 2023 by Joe Panettieri

How will the cloud services market further evolve to potentially address sustainability, green IT services and circular economy business needs in 2024?

We're glad you asked. Here are 10 sustainability-related predictions describing what may be next for public cloud service providers (Amazon Web Services, Microsoft Azure, Google Cloud, etc), co-location providers, and data center companies that provide IaaS (infrastructure as a service), PaaS (platform as a service) and SaaS (software as a service) capabilities.

1. Customers Will Increasingly Demand Green Data Center Infrastructure: Demand for green data centers -- particularly in Europe -- will continue to surge. Among the proof points: Annual revenue in the European green data center market is expected to reach $12.25 billion in 2028 -- up from $7.94 billion in 2022. That's a compound annual growth rate (CAGR) of 7.5%, according to Research and Markets. Meanwhile, the U.S. data center market appears to be struggling with green IT transitions, according to Hitachi Vantara research. But we do expect those US data center transitions to gain some traction in 2024.

2. Investors Will Increasingly Fund Green Data Centers: Venture Capital and Private Equity dollars will continue to fund data center startups that leverage renewable energy (wind, hydro, solar) to power their infrastructure. Among the recent moves to note: evroc, a startup backed by EQT Ventures and Norrsken VC, is striving to build Europe's first sovereign hyperscale cloud business that leverages sustainable energy. The funding topic should be especially hot during Platform Global 2024 -- a conference for investors and leaders in the data center market.

3. Public Clouds Providers Will Introduce More Sustainability Tools: Microsoft Cloud for Sustainability, AWS, Google Cloud and Salesforce Net Zero Cloud will continue to roll out additional carbon monitoring, energy management and circular economy capabilities.

4. Open Source Solutions Will Assist Data Center Sustainability: Keep an eye on an OpenUK and United Nations partnership that involves a Data Centre Blueprint known as “Patchwork Kilt." The resulting solutions may help data center providers to manage heat reduction, building repurposing, circular supply chain and more.

5. SaaS Sustainability Software Companies Will Engage MSP Partners: Early examples include MSP partner programs from Workiva and Sage. More are coming...

6. AI Will Grow -- As Will Risks of Runaway AI Energy Consumption: Yes, AI continues to transform the cloud services market. But keep in mind: AI applications may consume far more energy than cloud providers had expected.

7. Data Aggregation Could Save the Day: Keep an eye on the Net-Zero Data Public Utility (NZDPU). Why? The answer: NZDPU is striving to be "the first global, central source of emissions data that streamlines and consolidates data from different sources into a consistent format while limiting reporting burdens on companies." The platform will "help stakeholders to meaningfully integrate such data into their decision making," the developers assert.

8. MSPs Will Offer Cloud-based Sustainability Services: Skeptical? Check out what Logicalis is delivering for CIOs. Or what KPMG built atop Microsoft Azure. Or what NTT built.

9. Cloud-based Sustainability Software Will Extend into the SMB Market: Skeptical? Look what Sage is up to...

10. Building Energy Management (BEM) Will Run on Cloud Services: The march toward greener buildings will accelerate. M&A will link traditional IIoT (Industrial IoT) devices and operational technology (OT) with cloud-based IT services. MSPs will increasingly gain cloud-based management dashboards that span IT systems and energy systems.

What did I miss? What's off the mark? Your feedback is always welcome. Please send it my way: Joe@MentoreVentures.com.

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