Cloud trends 2024: Serverless, sovereign and AI-enabled

Public cloud platforms are experiencing significant transformation through artificial intelligence integration, serverless architecture adoption, and growing emphasis on digital sovereignty across different global markets.

Major market shifts: The public cloud platform landscape is being reshaped by three primary forces: artificial intelligence adoption, serverless-first approaches, and regional sovereignty requirements.

• Hyperscalers are adapting their core infrastructure to support generative AI capabilities while expanding their service offerings beyond traditional enterprise IT boundaries
• Chinese cloud providers are driving innovation in AI services and foundation model support across multiple domains
• European cloud providers are capitalizing on sovereignty and sustainability requirements to compete effectively across the technology stack

Serverless evolution: The industry is moving decisively toward serverless-first implementations, simplifying cloud service consumption and deployment.

• Kubernetes and Function as a Service (FaaS) have become standard features rather than complex implementation challenges
• Chinese providers are leading innovation in serverless machine learning and mobile development support
• Cloud customers increasingly prefer pre-configured services over complex platform builds

European market dynamics: Digital sovereignty and sustainability considerations are reshaping cloud procurement practices in Europe.

• Regulatory requirements extend beyond infrastructure to encompass hardware, software, networking, and data management
• In-region data centers and supply chain controls are becoming standard requirements
• Cloud sustainability is gaining importance as generative AI services drive increased energy consumption

AI integration trends: Cloud providers are transitioning from fragmented AI offerings to more comprehensive, orchestrated services.

• Hyperscale providers are leveraging their infrastructure advantages to dominate the AI space
• Development tools now include AI-assisted capabilities for both general and AI-specific applications
• Retrieval-augmented generation (RAG) technology is emerging as a critical component for deploying foundation models in production environments

Critical analysis: While cloud providers are racing to meet evolving market demands, significant challenges remain in balancing regional compliance requirements with global scale capabilities, particularly as AI adoption accelerates energy consumption concerns.