2025 Predictions: Cloud Architectures, Cost Management and Hybrid By Design

In this episode of our predictions series, we consider the evolving nature of the cloud in terms of architecture, cost management, and lower-tier infrastructure. We asked our analysts Dana Hernandez, Ivan McPhee, Jon CollinsWhitwaters and William McKnight for their thoughts.

Jon: We’re seeing a maturation of thinking around architecture, not just in terms of cloud computing but also technology provision. Keep in mind that the cloud as we know it still only accounts for 25% of the overall space – the other three-quarters are deployed on-premises or hosted in private data centers. It all has to work together as a single conceptual platform, or at least, the more accurately we can do that, the more efficient we can be.

While the keyword may be “hybrid,” I expect to see a move away from accidental hybrid environments toward designed hybrid environments—where decisions are actively made based on performance, cost, and governance areas such as sovereignty. As FinOps demonstrates, cost management will continue to drive this trend.

Dana: FinOps is evolving, with many companies considering deploying workloads on-premises or moving them back from the cloud. At FinOpsX, the company is looking at hybrid costs on-premises and in the cloud. Oracle has now joined the big three of Microsoft, Google, and AWS, and it will be interesting to see who else joins the ranks.

Jon: Another example is repatriation, moving workloads from the cloud back on-premises.

William: Yes, repatriation is accelerating, but cloud providers may respond by 2025, possibly by offering greater flexibility and security through more competitive pricing and technological advancements. We are still moving aggressively to the cloud, and it may take a few years for the pace of migration to slow down.

Whit: Supplier reactions to repatriation are interesting. For example, Oracle, with Oracle Cloud Infrastructure (OCI), is undercutting competitors with its pricing model, but concerns remain—customers are concerned that Oracle may incur higher costs in the future due to licensing issues.

Jon: We’re also seeing historically pure-play cloud vendors begin to embrace hybrid models, although they may not say it out loud. For example, AWS’ Outposts on-premises cloud offering now works with NetApp’s on-premises storage, and this type of partnership is likely to accelerate. I think “the cloud” should be viewed primarily as an architectural construct around dynamic provisioning and elastic scaling, and secondarily as an architecture around providers – recognizing that hosting companies can do a better job with elasticity. Organizations need to put architecture first.

Ivan: We will also see more cloud-native tools to manage these workloads. For example, with SASE/SSE, companies like Cato Networks are having success because people don’t want to install physical equipment on the network. We’re also seeing this trend with NDR from companies like Lumu Technologies, whose security solutions are cloud-native rather than on-premises.

Cloud-native solutions like Cato Networks and Lumu Technologies have greater pricing flexibility than solutions tied to hardware components. They will be better able to adjust pricing to drive adoption and growth than traditional on-premises solutions. Some vendors are exploring value-based pricing, taking into account factors such as customer business value into strategic accounts. This can be an exciting transition as we move into the future.