We\u2019ve entered another year where current economic conditions are pressuring organizations to do more with less, all while still executing against digital transformation imperatives to keep the business running and competitive. To understand how organizations may be approaching their cloud strategies and tech investments in 2023, members of VMware\u2019s Tanzu Vanguard community shared their insights on what trends will take shape.\n\nTanzu Vanguards, which includes leaders, engineers, and developers from DATEV, Dell, GAIG, and TeraSky, provided their perspectives on analyst predictions and industry data that point to larger trends impacting cloud computing, application development, and technology decisions.\n\nTrend #1: More organizations will take on a cloud-native first strategy, accelerating the shift to containers and Kubernetes as the backbone for current and new applications.\n\nAccording to Forrester, forty percent of firms will take a cloud-native first strategy. Forrester\u2019s Infrastructure Cloud Survey 2022 reveals that cloud decision-makers have implemented containerized applications that account for half of the total workloads in their organizations. Kubernetes will propel application modernization with DevOps automation, low-code capabilities, and site reliability engineering (SRE) and organizations should accelerate investment in this area as their distributed compute backbone.\n\n\u201cI agree on the cloud-native first strategy [prediction] since Kubernetes is the base for modern infrastructure. But you have to take into account that cloud native first does not mean public cloud first. Especially in regulated environments, public clouds or the big hyperscalers won't always be an option,\u201d says Juergen Sussner, cloud platform engineer and developer at DATEV. \u201cIf you look into the startup world, they start in public clouds, but as they grow to a certain scale, cloud costs will become a big problem and the need for more control might come up to bring things back into their own infrastructures or sovereign clouds. So cloud-native first, yes but maybe not public cloud first to the same degree.\u201d\n\nWhile Scott Rosenberg, practice leader of cloud technologies and automation at TeraSky, agrees with Forrester\u2019s prediction, he notes that there is nuance in the details. \u201cThe growth of Kubernetes, and the benefits it brings to organizations, is not something that is going away. Kubernetes and containerized environments are here to stay, and their footprint will continue to grow. As Kubernetes is becoming more mature, and the ecosystem around it as well is stabilizing, I believe that the challenges we are experiencing around knowledge gaps, and technical difficulties are going to get smaller over the next few years. With that being said, due to the maturity of Kubernetes, I believe that over the next year, the industry will understand which types of workloads are fit for Kubernetes and which types of workloads, truly should not be run in a containerized environment. I believe VM-based and container-based workloads will live together and in harmony for many more years, however, I see the management layers of the 2 unifying in the near future, as is evident by the rise of ecosystem tooling like Crossplane, VMware Tanzu VM Operator, KubeVirt and more.\u201d\n\nEven if organizations decide to take a containerized approach to their applications, Jim Kohl, application and developer consultant at GAIG, says \u201cthere still is heavy lifting in moving the company project portfolio over to the new system. Even then, companies will have a blend of VM-centered workloads alongside containerized workloads.\u201d\n\nSimilarly, Thomas Rudrof, cloud platform engineer at DATEV eG, agrees that we won\u2019t necessarily see the end of VM-based workloads. \u201cOur organization, as well as the majority of the industry, is already adopting a cloud-native-first or a Kubernetes-native-first strategy and will increase their investment in technologies like Kubernetes and containers in the coming years. Especially for new apps or when modernizing existing apps. However, it is also important to note that there are still many apps that run on virtual machines and do not work natively in containers, especially in the case of third-party software. Therefore, I think there will still be a need for VM workloads in the coming years,\u201d says Rudrof. \n\n\u201cThis year, companies will focus on cost optimization and better use of existing hardware resources. Using containerization will allow you to better control application environments along with their lifecycle. It will also allow for more effective and faster delivery of the application to the customer. IT departments should reorganize some IT processes that use a VM-based approach rather than containers,\u201d says Lukasz Zasko, principal engineer at Dell.\n\nTrend #2: Optimizing costs and operational efficiency will be a focus for organizations looking to improve their financial position amidst an economic downturn and skills shortages. IT leaders and executives must use AI and cloud platforms, and adopt platform engineering, to improve costs, operations, and software delivery.\n\nGartner\u2019s Top Strategic Technology Trends for 2023 advises that this year is an opportunity for organizations to optimize IT systems and costs through a \u201cdigital immune system\u201d that combines software engineering strategies like observability, AI\/automation, and design and testing, to deliver resilient systems that mitigate operational and security risks. Additionally, with ongoing supply chain issues and skills shortages, organizations can scale productivity by using industry cloud platforms and platform engineering to empower agile teams with self-service capabilities to increase the pace of product delivery. Lastly, as organizations look to control cloud costs, Gartner states that investments in sustainable technology will have the potential to create greater operational resiliency and financial performance, while also improving environmental and social ecosystems.\n\n\u201cEliminating cognitive load from your developers by using platform engineering techniques makes them more productive and therefore more efficient. There\u2019s always a discussion about what can be centralized, and what should and should not be centralized as it can cause too much process overhead when not giving this specific control to your developer teams,\u201d Sussner says. \u201cThe rise of AI in this case can\u2019t be overlooked, like GitHub Copilot and many intelligent tools for managing security and many other aspects of supply chains.\u201d\n\nHowever, cost savings isn\u2019t necessarily a new prediction or trend for organizations in 2023, according to Martin Zimmer - Technology Lead Modern Application Platforms at Bechtle GmbH. \u201cI have heard this for 10 or more years. Also, AI will not help with [cost savings] because the initial costs are way too high at the moment.\u201d\n\nOn the other hand, Rudrof says, \u201cAI has the potential to significantly improve the efficiency, productivity, and effectiveness of IT professionals and organizations, and is likely to play an increasingly important role in the industry in the coming years.\u201d He is also optimistic about platform engineering as a trend that will impact enterprise strategies. \u201cI believe that platform teams are essential in helping DevOps teams focus on creating business value and in providing golden paths to enhance the overall developer experience,\u201d says Rudrof.\n\nTrend #3: Infrastructure and operations leaders will need to rethink their methods for growing skills to keep pace with the rapid changes in technology and ways of working.\n\nGartner predicts that through 2025, 80% of the operational tasks will require skills that less than half the workforce is trained in today. Gartner recommends that leaders implement a prioritized set of methods to change the skills portfolio of the infrastructure and operations organization by creating a skills roadmap that emphasizes connected learning, digital dexterity, collaboration, and problem-solving.\n\n\u201cThe main problem in 2023 will be how can we learn new skills fast and stay on top of all the new tools and technologies in every area. If you implement a toolchain today, tomorrow it's old,\u201d Zimmer says. He adds that implementing a skills portfolio is nothing new. \u201cConnected learning, digital dexterity, collaboration, and problem-solving should be the \u2018normal\u2019 skills of everyone who works inside the IT organization. The days where an IT \u2018guru\u2019 sits in his dark room and runs away when you try to talk with him are long gone.\u201d\n\nWhile developing digital and human skills will always be important for current and future workforces as hybrid work and digital transformation initiatives take hold, organizations must also look inward to evolve company culture. Sussner believes that being able to react and adapt to change is a skill in itself that an organization has to develop. \u201cNot only do DevOps teams have to adapt to changing requirements, but also company structures. If you take Conway's law seriously, this means being able to develop software in an agile way, would also raise the necessity to be able to change company structures accordingly.\u201d Conway\u2019s law states that organizations design systems that mirror their own communication structure.\n\n\u201cThis huge step in company culture requires brave managers adopting agile principles. So in my opinion, it's not only about technology transformation, it's also about company culture that has to evolve. If neither technology nor culture does not take part in this game, all will fail,\u201d Sussner adds.\n\nAt a time when budgets and margins are tightening, leaders should take this time to re-evaluate investments and prioritize the technologies and skills that build a resilient business. As business success increasingly relies on the organization\u2019s ability to deliver software and services quickly and securely, building a company culture that prioritizes the developer experience and removes infrastructure complexity to drive productivity and efficiency will be critical for 2023 and beyond.\n\nTo learn more, visit us here.