Clouds on the horizon for 2025

Muggie van Staden, Obsidian

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In the Middle East and Africa, South Africa is emerging as the region’s fastest-growing cloud market and is projected to hit $6.3 billion by 2030, according to Grand View Research. “In South Africa, and globally, businesses are shifting gears, moving towards cloud and AI solutions to keep up with the pace of innovation to remain competitive and relevant,” says Eugene de Souza, regional cloud ecosystem lead at Red Hat. Hyperscalers like Amazon Web Services (AWS), Microsoft Azure and Google Cloud are introducing AI and machine learning services, making advanced analytics accessible to businesses of all sizes. There’s also the emerging trend where local cloud and service providers are offering AI-as-a- Service capabilities to their customers. AI will continue to dominate business and technology conversations in 2025. Businesses that don’t adopt cloud and AI will be overtaken, he adds.

“One of the most significant [cloud trends] is the shift from digital transformation to AI transformation,” says Ravi Bhat, chief technology and solutions officer for Microsoft’s Africa Region. This transformation is not simply about moving to the cloud, it’s about integrating services like AI capabilities to drive innovation and improve customer experiences. “It represents a step up for some organisations from where they were, and we are seeing customers leapfrog into AI transformation,” he says.

“As sovereignty, cost and data ownership concerns rise, private clouds will thrive.”

Forrester’s ‘Predictions: 2025 Cloud Computing’ report

For Bhat, AI cloud is redefining productivity. Automation, a term that everyone used to describe innovation in the cloud era, is something different in the AI era. “AI is the technology that’s changing economics and will change the world’s GDP. It’s become a general purpose technology like the internet or the printing press.”

Bhat believes that with cloud, we are entering the age of copilots, something CEO Satya Nadella mentioned in his keynote at the Microsoft Ignite conference. “We are the copilot company,” he said. “We believe in a future where there will be a copilot for everyone and everything you do.” There is already a growing copilot ecosystem. GitHub, for example, has GitHub Copilot, a code completion and automatic programming tool that assists users of Visual Studio Code, Visual Studio, Neovim and JetBrains. SAP has Joule, an AI assistant that’s infused into every SAP application. Analyst Josh Bersin is also expecting more Copilot plugins. “Just like there are thousands of Excel plugins and Word add-ons for Microsoft Office, we can expect to see an industry of Copilot plugins and tools to come next,” he says.

According to Forrester’s ‘Predictions: 2025 Cloud Computing’ report, we’re also heading into a new AI-focused public cloud platform vendor landscape. “As sovereignty, cost and data ownership concerns rise, private clouds will thrive,” the report says. AI has become a core part of public cloud offerings, but its influence is now expanding into private cloud, too. Because AI is used to process and analyse large amounts of data, businesses are turning to private cloud environments to handle sensitive or regulated workloads securely. This move is often due to concerns about data privacy, security and control, which private clouds can better address compared to public clouds. “The first consideration for any organisation moving to the cloud should be a provider’s security features and compliance certifications to ensure data protection,” says Bhat.

Deon Schwabsky, CTO of 4C Predictions and NewsGPT, agrees, adding that for many organisations, the challenge of cloud adoption lies in finding talent with the right security expertise to manage these complex environments effectively. This is why the cloud environment requires a shift in mindset, and “managing ephemeral resources is key to effective adoption,” says Muggie van Staden, CEO at open source software company Obsidian Systems.

Eugene de Souza, Red Hat

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Even going into 2025, cloud migration isn’t as simple as flipping a switch. “Think of it like moving houses – you have to pack everything up, decide what’s worth keeping and then set it all up in the new place,” says Eugene de Souza, regional cloud ecosystem lead at Red Hat. “There are bound to be bumps along the way.”

Cost management is a great example. While the cloud promises savings, the reality is more nuanced, so without careful management and planning, costs can spiral. “Imagine having an all-you-can-eat buffet – you might end up eating way more than you intended if you didn’t think about how much you wanted or needed before starting,” says De Souza. Similarly, businesses often need help identifying unused resources and optimising their spending. Planning before you migrate to the cloud is important, and managing your use of cloud services whether from a public or private cloud provider is just as important for ongoing maintenance of your resources.

“One of the most significant [cloud trends] is the shift from digital transformation to AI transformation.”

Ravi Bhat, Microsoft

Another challenge is data sovereignty and compliance. With regulations like the PoPI Act in South Africa, many businesses worry about where their data resides, or who has access to it. While hyperscalers have set up local datacentres in South Africa, the complexity of managing cross-border data flows will continue in 2025, especially in sectors such as finance and healthcare. Another ongoing cloud adoption challenge is the global skills shortage. According to SoftwareOne’s ‘Cloud Skills Report’, 95% of respondents said that a lack of cloud skills negatively affected their organisation. Almost all (93%) of the IT decision-makers agreed that investing in cloud-managed services will be a priority in the next 12 months. A survey by cloud networking company Aviatrix found strong demand for cloud platform expertise (60.5% of respondents). The problem is that the talent pool in South Africa is limited, which makes it tough for companies to find the right expertise to manage cloud environments effectively. “This is akin to having a high-performance sports car, but lacking a skilled driver to handle the corners,” says De Souza. He recommends that businesses look at the Cloud Native Computing Foundation’s Cloud Native Maturity Model.

This well-known framework helps organisations assess where they are on their cloud journey, guiding them from basic adoption to advanced capabilities like microservices and AI. “This model ensures a smooth transition, much like learning to ride a bike with training wheels before speeding off on a motorbike,” De Souza says.

With energy costs going through the roof, cloud providers and datacentres are increasingly focusing their efforts on sustainability and energy efficiency. AWS is on track to power its operations with 100% renewable energy by 2025 (five years ahead of its original 2030 target). Since 2017, Google has matched 100% of its electricity consumption with renewable energy purchases annually. That said, Google’s greenhouse gas emissions have increased by nearly 50% in the past five years and this is largely due to AI. A recent UNEP report confirmed that AI, and its associated infrastructure, has an environmental problem. Microsoft has been carbon-neutral since 2012, and plans to be carbon negative by 2030. And while the company is trialling various initiatives to cut greenhouse gas emissions, like wooden datacentres in Australia, its overall emissions are 29.1% higher than in 2020, thanks to new server farms. “The goal is to reduce the energy consumption in order to increase profit,” says Mihovil Mader, Infobip’s products director. “On the other hand, colocation providers charge their customers for the energy consumption and the rate is usually standardised on a certain market.” For example, larger datacentres, such as South Africa’s Teraco, and some colocation providers are building renewable energy farms to provide lower-cost energy and differentiate themselves in the market.

“They’re moving towards generating their own electricity in more sustainable ways,” says Muggie van Staden, CEO at Obsidian Systems. Adopting newer, more energy-efficient hardware also has a role to play. Deon Schwabsky, CTO, 4C Predictions and NewsGPT, says cloud providers continuously release more efficient hardware that delivers increased power while consuming less energy and generating less heat. To help keep costs low, they often incentivise customers to migrate their systems to this newer hardware, which sometimes requires reworking parts of the platform. “However, the long-term savings typically outweigh the initial efforts,” says Schwabsky. Dynamic smart load balancing is another way cloud providers optimise resources, helping to reduce energy consumption and environmental impact. From AWS’ Elastic Load Balancing, which automatically distributes incoming application traffic across multiple targets, to Microsoft Azure’s Load Balancer, which distributes incoming network traffic across multiple virtual machines, dynamic smart load balancing is helping shape a hopefully more efficient, sustainable future for cloud beyond 2025.

In recent years, leading cloud providers have intensified investments across Europe, APAC and the Middle East. Now, Forrester’s ‘Predictions: 2025 Cloud Computing’ report says that the focus is Africa. The US and Chinese cloud giants have already established a presence in South Africa, and 2025 will bring further expansion into East and West Africa. In May 2024, Microsoft and G42 announced a $1 billion initiative to develop a comprehensive digital ecosystem in Kenya, with the aim of enhancing cloud services and AI capabilities in the region. Huawei is also making bold moves, having launched a datacentre in Cairo in the beginning of 2024. Both Huawei and Alibaba have committed hundreds of millions of dollars to establish new cloud regions, showing their intent to expand in African markets. AWS is investing an additional R30.4 billion into its South African cloud infrastructure over the next four years. It already has an office in Lagos and a development centre in Nairobi. South Africa, Nigeria and Kenya are set to be at the heart of this expansion as cloud providers partner locally to address data privacy and control concerns. With hyperscalers prioritising regional partnerships, Africa is quickly becoming a pivotal market in the global cloud landscape.