The CIO Dive Outlook on 2021

CIOs spent 2020 responding to urgent calls for operations support.

They led expedited tech stack transformations to meet surges in website traffic. They guided the rapid adoption of automation in the call center. They upheld the technologies that supported simultaneous work from home at an unprecedented scale.

But what companies need from their CIOs has changed since the start of the pandemic. In 2021, tech leaders will need to shepherd their companies through the known unknowns ahead. Companies will entrust technology leaders with more of the business, and closely tracking business success metrics.

Tech spend contracted in 2020 and Forrester expects a 0.4% contraction in IT spend for the year ahead. IT organizations are still expected to do more with less. 

While it's impossible to predict the exact impact 2020 will have on the CIO role, here are five predictions on the changes CIOs face in the year ahead:

An ambassador for collaboration

Digital maturity will determine whether businesses sink or swim. At the core of the changes needed to happen throughout the organization en route to a technologically competent business is the CIO.

In the year ahead, organizations will need to rethink the architecture of the business with the technology capability in mind, according to Irving Tyler, research VP at Gartner. 

"The CIO is going to have to take on more leadership responsibilities," weighing in on major business and strategy decisions, Tyler said.

With the spotlight on the capabilities they can enable, CIOs will need to "step up their leadership as they did during COVID-19," said Tyler, alerting leaders to the importance of enabling technology throughout the organizations in a collaborative way.

"We're going to have to think about different ways of working together," he said. "And if we do that, we can really take advantage of technology."

CIO inches closer to the customer

From the pandemic arose a greater company imperative for delivering on customer experiences. Consumers expect more flexibility and a quality experience from businesses.

"So many companies have had to change the way that they deliver," said Matthew Guarini, VP and research director at Forrester. "Because of that, they need to have new approaches to be able to deliver what we call hybrid experiences."

Retailers scrambled to adjust to contactless transactions during the pandemic, from curbside pickup to delivery or in-store pick-up. This trend put new pressures on the existing tech stack, and for some organizations it meant launching those capabilities from scratch.

"A lot of companies just haven't been prepared for that," said Guarini. In 2021, more companies will look to their tech leadership to help enhance that customer experience.

"As those experiences start to change, if you're not able to deliver on them, you're gonna be in trouble," Guarini said.

The WFH enabler

Remote work is likely to comprise at least part of the work week for entire swaths of the workforce, even after the pandemic subsides and vaccines become available. 

While a post-pandemic CIO must contend with business and customer pressures, they must also play a role in how organizations codify their remote, on-site and hybrid work models, according to Amy Loomis, research director, Future of Work, at IDC. 

"In addition to gaining secure access to technical resources, [CIOs] will also play a key role in supporting technologies that enable employees to navigate between applications," said Loomis.  

For organizations gradually bringing their workforce back to physical offices, CIOs will steer the technology that powers initiatives such as advanced employee screening, badging, scheduling, proximity monitoring and contact tracing. 

"They will also broaden to far more instrumented buildings with interconnected systems that direct employees to safe workspaces or AI enabled conference rooms," said Loomis. "Hybrid work models will require CIOs to focus on the dynamics between physical and virtual workspaces."

The CIO as a change agent

Change was the keyword for IT in 2020 and there's upside in sustaining that flexibility in 2021, according to Brian Jackson​, research director at Info-Tech Research Group. 

"CIOs helped their organizations innovate their way to survival during 2020, either shifting huge amounts of business to digital delivery or creating an entirely new business model to generate revenue with current and new customers," said Jackson. "The path ahead remains rife with uncertainty, but the forced experimentation of the pandemic is one opportunity that CIOs should seize on."

As CIOs measure how new digital approaches drive business results, they may not always find good news. "When that's the case they must be ready to pivot to try another new approach," Jackson said.

CIOs grapple with risk

When the pandemic hit, companies scrambled to get their WFH scenarios all set up, said Pete Lindstrom, VP of security research at IDC, speaking on a webinar.

"VPNs were installed, licenses were increased and BYOD programs were set up," Lindstrom. "The forward looking companies also recognized that they're part of a bigger ecosystem. Building trust with partners, suppliers and customers becomes that next crucial step to succeed in times of crisis."  

Despite efforts, 30% of CIOs will fail in protecting trust next year as executives fail to find adaptive ways to counter escalating cyberattacks, unrest, trade wars and sudden collapses, IDC predicts.

"It's important for CIOs to recognize that trust is fickle," he said. "It can change on a dime and the goal is to move further into providing a form of resilience. Business resilience ensures that not only are your systems trust worthy, but you'll be there in times of crisis."

What could a business do with a $1.4 billion IT budget? 

Forget just keeping the lights on; that's 1.4 million high-end laptops, annual compensation for roughly 460 Fortune 500 CIOs or more than 2,500 decades of cloud services, depending on business size and provider. 

A budget this large is the reality for many federal agencies. The Department of Interior (DOI), a relatively standard small- to mid-sized agency, budgeted $1.4 billion to IT in fiscal year 2020, a fraction (about 6%) of its more than $24 billion total budget.

For comparison, businesses spent between 4.2% and 4.8% of their 2020 revenue on technology, according to Deloitte's 2020 global CIO survey. 

Understanding the needs of stakeholders and the agency mission can help government departments navigate massive spending responsibilities, but the big takeaway for business is simple: strategy matters. As the public holds the government accountable for each dollar spent, so will the financial department on the business IT budget. 

Businesses face IT spending challenges — such as collaborating with financial departments on the budget or balancing legacy investments with the need to modernize — that can be avoided with a holistic and thorough budget plan similar to the budget pledges agencies make each year. 

"IT leaders are really struggling to get complete visibility of their spend as their environments become more complex and hybrid," Cyndi Tackett, VP of Product Marketing at Flexera, told CIO Dive. 

And as budgets shift in 2021, strategic spending mindful of the entire IT enterprise builds incremental progress to deliver tangible results. 

While IT departments tackle the big projects, from cloud migrations to automation, an agile spending mindset focused on incremental moves builds enterprisewide progress, according to Waters Corporation CIO and former White House CIO Brook Colangelo in an interview with CIO Dive in October 2020. 

"Understand, first, what's in the budget and so as you do that and you develop your strategic plan, you can align those things and align the resources that you need to drive the change that you want to make for your tenure," Colangelo said as a key takeaway from government that applies to the private sector. 

In other words, IT departments with budgets of all sizes can focus on the impact of IT dollars spent now to drive value as quickly as possible.

How a fed IT budget stacks up to enterprise

The federal government at-large spent $90 billion on IT in FY2019, according to the Government Accountability Office. A small portion of the total government budget, the figure still looms as a massive investment. 

To better understand how the government spends its IT dollars, a closer look at DOI provides a comprehensible, although narrow, look at a government tech budget. 

In FY2020, DOI spent 62% of its $1.4 billion IT budget on so-called standard IT infrastructure projects, or just keeping the lights on. Only 20% of total spending was on major IT projects and 17% on non-major IT. 

Major IT projects include endeavors with special importance to the mission or function of an agency. For example, DOI spent $58.5 million upgrading its Financial and Business Management System with an enterprise solution to reduce burden. These projects tend to involve a major lift, transformation or upgrade of an agency asset.

In FY2021, DOI's budget is expected to look about the same; the agency's IT budget will again total $1.4 billion. The agency is pursuing more shared services opportunities and "an aggressive enterprisewide approach to support IT modernization," according to its FY2021 budget in brief. DOI declined to comment on its IT spend for this story.

While the dollar amount will vary from business to business, the private sector has a larger portion of its budget to spend on IT. 

But IT budgets are in flux. While a Gartner analysis predicts IT services budgets to grow 4% in 2021 after a 5.4% spending dip in 2020, Forrester, on the contrary, predicts U.S. tech investment to fall 1.5% in 2021 after years of acceleration.

Put simply, IT spend varies based on how each sector reacted to the pandemic, according to Tackett. Those hit hard by the pandemic may slash IT spending to keep employees on the payroll. While other companies, such as those in the tech sector that fared relatively well in 2020, will likely be motivated to improve their presence in the digital age and up IT budgets. 

"Just getting back to normalcy for some of these companies is more of a priority than innovation," said Tackett.

The balance hangs in what's best for business recovery — and deciding what to upgrade versus what legacy tech can wait. 

For example, 62% of respondents in a Flexera survey of 474 IT executives and high-level managers plan to reduce their use of data centers over the next 24 months. But frequently shifting away from data centers requires an investment in modernization. Cloud spend, at 30% of total IT spend, just barely surpasses on-premises software spend, which totaled 24%. 

In that sense, planning ahead relies on deciding which expenditure will benefit the business's bottom line, but first, IT departments are still adapting to pandemic-era shifts. 

Pandemic IT spend changes aren't over yet

Across sectors, organizations lean into modernization and digital transformation with incremental IT budget increases during the shift to remote everything. 

At large, 2021 will see pragmatism reflected in IT budgeting decisions. And government agencies know the importance of practicality as millions of constituents lean on reliable services — not shiny gadgets — to access services. 

IT spend in 2021 will have an increased focus on the hardware and software supporting a distributed workforce, cloud-based digital transformation and managed services, according to Ryan Denehy, CEO at Electric. 

"With the increasing need to do more with less going into 2021, I believe most will focus budget on covering their bases in a more practical, foundational way," Denehy said. 

Federal agencies, for example, received a small budget boost in 2020 to overcome pandemic hurdles. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed in March, allocated $756 million directly to DOI programs to mitigate pandemic effects. 

The relief money supported DOI's quick shift to telework as the number of employees working from home tripled. Of the new funds, $522 million went to DOI's Bureau of Indian Affairs and Bureau of Indian Education specifically directed toward COVID-19 response, such as improved teleworking and IT.

DOI migrated to Microsoft Office 365 and increased virtual private network licenses to adapt to the change with pandemic relief funds to meet immediate remote work needs, the Office of the CIO told the Inspector General (IG).

Businesses, conversely, were often stuck reprioritizing existing resources to support IT during the pandemic. 

"You can’t talk about IT spending trends without first recognizing how the pandemic has impacted the nature of work," said Denehy. "Businesses are focusing less on emerging technologies and instead, on ensuring a strong IT foundation to support productivity and business continuity."

Shuffling priorities to meet the demand of digital business and remote work, "the COVID-19 crisis prompted unplanned spending among many organizations to meet those remote enablement needs in the first half of 2020," according to SWZD's The 2021 State of IT. 

Of the 1,073 IT buyers from organizations across North America and Europe that responded to SWZD's survey, 44% have already or plan to accelerate digital transformation and 36% plan to improve IT operations and systems performance in 2021. 

Digital transformation, cybersecurity and cloud remain the top business IT priorities from 2020 to 2021, according to the Flexera report, indicating that the pandemic stalled progress, according to Tackett.

"They haven't changed because there might not have been as much progress towards those goals," said Tackett. What did change, however, was a renewed focus on cost savings. In 2020, 9% of respondents to the Flexera survey listed it as a top priority, but it jumped to 27% in 2021. 

This year, 49% of respondents to the Flexera survey plan to increase IT spend and 32% plan to decrease. The large proportion of spending increase, or at least plateau, matches analyst predictions as companies realize the value of IT in the changing digital landscape. 

"We’re not out of the woods by any stretch of the imagination, and it’s likely 2021 will bring more uncertainty that drives business and budget decisions," Denehy said. "However, what we do know is that IT plays an undeniable role in enabling the remote workforce and can’t be neglected."

Absolute Software started 2020 with splashy plans for its physical meeting rooms. The company, with five offices across Europe, Asia and North America, wanted to outfit conference spaces with big monitors and cameras that tracked speakers around the room. 

After the COVID-19 pandemic sent most of the globe's workforce home, the company shifted gears, rethinking how employees participate in meetings regardless of their location, using tools such as videoconferencing and virtual whiteboarding software.

"Nobody's been in those meeting rooms now for nine months," said Dianne Lapierre, CIO at Absolute Software.

Leaders in 2020 grappled with the implications of large-scale changes to business operations. Now, the year ahead is all about making those changes sustainable.

What's ahead for businesses is a mix of coming together physically and working apart, Lapierre said. Under a hybrid work model, companies can use colocation for collaborative work, while allowing employees retain flexibility. 

HR professionals expect roughly half of the workforce will want to come back to the workplace – at least part time – after a COVID-19 vaccine is widely available, according to a Gartner survey. Nine in 10 HR pros plan to offer remote work options after that point.

With a set of evolving tools for centralizing work, managers will spend 2021 making outcomes and impact their priority, on their way to safeguarding company culture through the changes. 

Though present in the pre-pandemic days, the use of videoconferencing and collaboration platforms will take on a central role as more companies commit to distributed operations at least some of the time, for part of their workforce, until further notice.

Creating a hybrid work playbook

In light of the pandemic, Dropbox laid out permanent changes to its work strategy. 

Under a virtual-first philosophy, the company began transforming its offices into what it calls "studios," spaces aimed at collaboration instead of solo work. "For the most part, we can work as teams and collaborate using our own products," said Sylvie Veilleux, CIO at Dropbox, speaking at Reuters Events' MOMENTUM Virtual Forum in December.

Though companies may have been adept at supporting remote work prior to the pandemic, leaders are pressed to adjust their their models to the new context.

"I don’t think we can talk about remote work in isolation of hybrid work models," said Amy Loomis, research director, Future of Work at IDC, in an email. While work from home will continue to be the primary setting, this year will see the normalization of any-place, anytime access to "the people, data and applications that you need to get work done."

The model shift is impacting CIOs' buying decisions, with productivity tools atop the categories of software spend projected for 2021, according to Spiceworks Ziff Davis. North American CIOs will devote 14% of their yearly software budgets to productivity tools.

For 2021 and beyond, the vision of hybrid work centers around a "flexible arrangement where employees are going to be flowing through different work sites, work facilities, even different work schedules," said George Penn, vice president, advisory in the Gartner HR practice. "Some of the biggest concerns that organizations have are around culture, and the capability of management and employees themselves."

Stripped of physical headquarters to help unite the workforce, business has turned to enterprise software tools as a manifestation of the office. 

Platform evolution in the new year will be marked by "the ongoing development of intelligent digital workspace," said Loomis. Under a single platform, remote and hybrid workers can securely access critical work tools and assets. 

Companies will entrust the CIO with supporting new work models — and exact pressure if these aren't working smoothly. Among CIOs, the pandemic enhanced the perspective that parts of the organization are customers as well, internal customers that the CIO serves in order to support their experience.

"The needs of my customers have continued to evolve, and their expectations of the tooling that they need to do their jobs has certainly evolved," said Lapierre. "The speed in which we need to respond to those requirements that our businesses have is only increasing." 

Flipping the work script

The asynchronous nature of work as a default will become pervasive among companies hoping to sustain their remote work strategies, according to Darren Murph, head of remote at GitLab. 

"I do think it will catch on," said Murph. "I think it will start in technology companies. Companies that have mostly digital outputs are in an ideal state to shift over to asynchronous workflows more quickly."

GitLab was remote from its inception. Last year it launched the Async 3.0 initiative, a push to reduce the amount of meetings it held, and shift as much work as possible into an asynchronous workflow. The initiative is seen as a contribution to diversity, belonging and inclusion. 

"The more work that you can shift to asynchronous, you open up the possibility for a larger chorus of voices to have their contributions valued and shared," said Murph. "Also, it allows people around the world who are dealing with a global pandemic to work on time that works for them."

Tools at the ready

Efficiency tracking software became elevated in the pandemic, perhaps driven by the perception that efficiency was compromised under a remote setting. Slack, which saw usage rise in the aftermath of the pandemic, rolled out a set of productivity metrics. 

But in evaluating their productivity, organizations should assess the outcomes and impact employees generate, instead of tracking time and activities, said Penn.

"If I'm tracking time, or when people log in and log out, you need to ask the question, is that really building trust?," Penn said.

Organizations that managed to push through the disruption of the COVID-19 pandemic were those that generated the highest levels of trust between management and employees, according to Penn. The rest of the year poses an opportunity to reimagine performance management processes and the technology that supports it.

"We want those systems to help contribute to driving higher performance, not just be administrative tasks," said Penn.

Incoming employees can expect higher salaries in line with higher demand in 2021, as companies hire more IT workers across sectors.

With too many open IT jobs and not enough talent to fill them, demand for IT employees rises following the digital transformation spurred by the pandemic. Six-figure salaries have become the norm across experience levels and job titles and growth is on track to continue, according to Randstad's 2021 salary guide. 

At the top of the list, businesses demand more cloud engineers, DevOps developers, front-end developers, machine learning engineers and security analysts — but they must be willing to pay to secure the talent, according to Randstad. 

The average annual salary for DevOps developers is $137,830 and mid-level cloud developers can expect to make $135,191. It's a "pay-to-play hiring environment," Randstad wrote in the report, so businesses will have to budget to spend a considerable amount of cash to hire a high-quality IT department. 

For cybersecurity positions, demand is even higher. Companies posted more than 166,000 jobs for security analysts in the last 12 months, and the field faces a 28% growth forecast over the next decade, according to Randstad. 

"The demand for IT pros with skills in cloud and cybersecurity have been high for years," said Zane Schweer, who leads the Global Knowledge's Skills and Salary report. "The pandemic has heightened it, but this is not new." 

As a measure of demand for IT skills, cloud and cybersecurity made up two of the highest-paying certifications in Global Knowledge's 2020 report. Data is still being compiled for the organization's 2021 report, but as IT architecture has become more complicated, "salaries should continue to trend in the positive direction" and innovators will be positioned to receive top salaries, said Schweer. 

Very few positions listed in Randstad's 2021 salary guide for technology jobs fell below a $100,000 salary. Some of the lowest-earning IT positions listed included help desk support technicians, project managers and instructional designers. 

The shift to remote work is also spurring a "normalizing of compensation rates" across locations, according to Christine Trykoski, recruitment director of Randstad Technologies. Employees no longer have to move to high cost of living places to perform well-paying IT roles. While some may take a paycut, Trykoski expects a 2% pay increase across the board. 

IT leverages demand for better benefits

At-large, the demand for IT professionals is driving more than just salary increases. Because employers need the help, employees ask for other benefits beyond pay. 

"Flexibility has been one of the absolute No. 1 things we've seen," Trykoski said of what employees are looking for this year. Flexibility could mean remote work even after the pandemic or a better understanding of non-business employee obligations, such as caring for loved ones. 

"Around one in five working age adults said that they were not working because COVID-19 disrupted their childcare arrangements and while keeping parents in the workforce will be key for our economic recovery, only 32% of organizations returning to work has a childcare plan," Karen Fichuk, CEO, Randstad North America, said in a Jan. 13 webinar covered by HR Dive. 

These benefits show manager engagement and how much a business cares about its employees, a trait top talent is seeking out, according to Trykoski.

But for the sake of their career development, IT professionals also look for jobs with opportunities for growth. Opportunities for growth and development was the top factor for changing employment in Global Knowledge's survey of 9,505 professionals. 

"IT pros want to see a future in their job," said Schweer. "There was a time when formal training had a stigma to it but it's now a serious job perk, especially in IT."

Plus, it's often cheaper to upskill the in-house workforce rather than pay a premium to hire top talent from the outside, according to Schweer. Over one-third (37%) of respondents to the Global Knowledge survey listed inability to pay what candidates demand as a reason for skills gaps.

For the benefit of IT professionals and businesses, it's about "creating that environment where IT pros can be as great as they want to be," Schweer said.

About 10 months after the COVID-19 pandemic forced millions of U.S. employees into remote operation, a new threat landscape emerged as companies scramble to manage a hybrid workforce.

Companies are working to manage security risks from vulnerable endpoints and sophisticated criminal and nation-state actors. 

With a new financial year underway and vaccines rolling out, executives are taking a fresh look at how they will navigate a newly hybrid workforce in a secure business environment. 

"What we are seeing is firms putting their plans together for a hybrid workforce," Bhushan Sethi, Global People & Organization co-leader at PwC. 

About 24% of workers in the U.S. telecommuted due to COVID-19, according to the Bureau of Labor Statistics. Other data shows during parts of 2020, more than 50% of workers at major U.S. companies worked from home due to COVID-19 restrictions.  

About 75% of executives expect at least half of their workforces to be back in the office by July, according to survey data from PwC. 

Multiple hats

The task of organizing office returns will be a massive undertaking because for many companies the rapid changeover from corporate offices to remote operations left no time for planning. During the lockdown, remote employees scrambled to balance productivity with childcare, deteriorating mental health and logistical challenges of working in a secure environment.

"In response to sudden work from home orders, we saw many companies prioritize productivity above all else," Michael Covington, VP of product at Wandera, said. "Whether workers were forced to work from home, or IT was told to reduce security policies, job number one at most organizations was to keep the business operational while people were working remotely."

Companies abandoned traditional security protocols but are now taking a fresh look in order to phase operations into a long term recovery, according to a report by Wandera. The Wandera report contains proprietary corporate data using the Wandera Security Cloud, which is based on 425 million sensors. The data has been anonymized and normalized at organizations using the technology, ranging from 10 employees to hundreds of thousands of employees. 

The report shows a 41% increase in malware attacks on an annual basis, as 52% of organizations faced a malware attack in 2020, compared to only 37% in 2019. The malware installations that affected remote work the most last year were spread using social engineering, according to the report.

The apps were made more potent when users granted too much access to their devices, which allowed attackers to gain access to "sensitive data and in some cases capture live recordings from the compromised devices," Covington said.

Remote workers have exposed corporate networks to high-risk activities or content. Out of the devices previously compromised by mobile malware in 2020, about 37% continued accessing corporate emails after being compromised and 11% continued accessing cloud storage.

Multiple devices, operating systems

Part of the difficulty with remote workers in the current landscape is their range of operating systems, including Windows 10, Android and iOS. They are bringing their own devices to access corporate networks through unsecure home-based workstations.

Traditional office rules have gone by the wayside as the Wandera report showed up to 100% increases in workers accessing inappropriate content during office hours. Remote workers, particularly those using Android operating systems, were using vulnerable apps to access content or conduct work. 

"The threat landscape remains fluid as attackers look to take advantage of disasters to phish and social engineer employees," Rick McElroy, principal security strategist at VMware Carbon Black, said via email. "Typically attackers target employees through email and attachments but have now started to use social media and texting as well."

Other threat actors have adjusted the way they use methods like ransomware to attack companies operating in remote environments, Vinay Pidathala, director of security research at Menlo Security said.

"What was old is now new," Pidathala said. "In 2019, ransomware was starting to decrease, but with COVID, attackers have pivoted back to ransomware, and they are having a lot of success with it."

More sophisticated actors are going after high value targets using web browser exploits, with Chrome being the browser of choice.  Four out of 10 browser exploits used in the wild are targeting that particular browser mainly due its dominant market share, according to Pidathala. Additonally, Microsoft Edge has based its underlying technology on Chromium since January 2020. 

In terms of specific threats, a large number of credential phishing attacks are targeting customers across various regions and business verticals, Pidathala said. There has also been a marked increase in web drive by downloads, with attackers using the SocGholish framework as their tool of choice. 

These attacks use social engineering toolkits disguised as either browser updates in Chrome or Firefox, Flash Player updates, or Microsoft Teams updates. 

In terms of security policy changes, Pidathala says that limiting administrative access, issuing corporate-owned laptops and application whitelisting are policies that usually pre-dated the COVID-19 outbreak. "More companies are moving their workloads and applications to the cloud," he said. "Given that shift, companies are strategizing around how to protect their data, web applications and users."

These include confirming access to cloud resources and assets are correctly configured and monitored, ensuring the security of cloud assets and ensuring the governance and protection of critical data. 

Looking further into 2021, tens of millions of corporate employees will continue to work from home.

However, companies plan to resume work environments to operate under a hybrid environment. "Some employees have started to work out of the office already and more will likely transition back to the office over the course of 2021," Rick Tracy, CSO at Telos Corporation, adding that the company will be flexible regarding remote work for the rest of the year and beyond. "Remote work due to COVID has proven that remote work can be effective and secure if managed properly."

Companies are expected to embrace zero trust in terms of how they deal with future threats in a pandemic-enabled threat environment, according to Adam Meyers, VP of intelligence at CrowdStrike. 

"I think the old castle kind of mentality around securing things to a certain extent will go away, as they embrace zero trust in the more modern way of thinking about security," he said. He expects more of a nuanced view of focusing on what needs to be secured and provisioning access appropriately. 

Cloud migrations are often messy. Toss in a pandemic and a quick shift to remote work, and 2021 becomes the year of clean up. 

"Looking towards 2021, there will be a significant uptick in cloud infrastructure deployments and spending to allow new remote workers to function efficiently outside the traditional office environment," said Andrew Doherty, CIO at Babel Street, in a statement to CIO Dive. 

The move to the cloud isn't slowing down, but businesses are tidying strategies to take full advantage of a hot cloud moment. Meanwhile, vendors reap the benefits. For SaaS providers, mass scale remote work led to a cloud market boom as companies pivoted toward digital. 

For the second year in a row, cloud is in businesses' top three IT investment priorities, according to a Flexera survey of 474 IT executives and high-level managers. With business continuity taking precedence in 2020, other priorities fell to the wayside but will regain attention this year. 

In 2021, businesses are preparing for the cloud to trickle into every department. Here are four cloud trends to watch:

Scrapping unnecessary cloud workloads

The "lift and shift" model of bringing an entire application to the cloud in one push brings along outdated, burdensome data. 

As of June, 40% of businesses were accelerating cloud adoption plans, according to a MariaDB survey of 559 enterprise engineering and IT professionals. But a stampede to the cloud leaves loose ends untied. Of hundreds of cloud deployments reviewed by Accurics in August, 93% featured misconfigured cloud storage services.

Reconfiguring the cloud to maximize benefits, minimize costs and reduce burden will be crucial to long-term cloud success. Tossing cash at a single public cloud vendor may have enabled business continuity in 2020, but moving forward business leaders are considering other models such as hybrid cloud as ideal for operations. 

And it's not just IT departments weighing cloud pros and cons anymore. As cloud knowledge becomes more mainstream, the C-suite and other members of business leadership watch closely to ensure cloud decisions benefit their departments, too. 

Relitigating cloud governance to stay secure

Looking to strengthen cloud strategy, businesses may rethink governance efforts to prioritize security. 

Returning to clouds' foundations and developing a strong governance plan will help businesses bolster security infrastructure to correct hasty adoption, according to David Wright, research director at Gartner, speaking at the Gartner IT Infrastructure, Operations and Cloud Strategies Conference last month. 

IT departments are working to shore up cloud security. Nearly all — 96% — of the 3,500 respondents to a Sophos survey in July expressed concerns about cloud security.

"Everybody thought VPN will do," Jennifer Curry, senior vice president of product and technology at INAP, told CIO Dive previously. "It'll do until you put your entire workforce at home on varying laptops and varying networks."

Financial services is among the sectors looking to cloud to secure workloads. Sophisticated cyberattacks pushed businesses to shape up cloud security strategies to avoid becoming the next Equifax. Hybrid cloud is a popular approach as a way to balance security and cost.

More cloud money to the same top vendors

As businesses take cloud largely back to the basics, vendors are stepping up to share the wealth.

This year, the global public cloud infrastructure market will grow 35% to $120 billion, according to Dave Bartoletti, vice president and principal analyst at Forrester. Cloud business had a banner year in 2020, with a growing market for their services.  

“The outlook is clearly ramped-up acquisitions to help companies accelerate their repositioning into SaaS, or to capitalize on the new ways of working and living in a COVID-influenced world," said Marc Suidan, U.S. technology, media and telecommunications leader at PwC in PwC's Technology Deals Insights: 2021 Outlook. 

The most recent COVID-19 legislation, signed into law in December, provides small businesses with the resources to continue cloud investments, sustaining more market growth. Updates to the Paycheck Protection Program include allowances for software and cloud upgrades for qualified companies. 

But it's the megavendors who will continue their reign. More than half of respondents to the Flexera survey expect to increase investments in Amazon Web Services, Salesforce, Google or other cloud services this year with Microsoft Azure ruling as the top choice.

Workforce training to up innovation

While vendors grow, the cloud computing companies are investing in spreading the tech knowledge with free training opportunities. 

 "Throughout 2021, we’ll start seeing more multicloud strategies paired with broader training initiatives from both enterprises and the cloud providers themselves," as businesses look to train cloud architects and professionals from within, said Katie Bullard, president at A Cloud Guru.

AWS and Microsoft both set out to train over 20 million people on the cloud, boosting the entry level cloud knowledge in the near future — while making way for advanced cloud technologists to rise and innovate. 

With the cloud boom paving the way for transformation, edge computing will likely be on the rise. In the near future, this cloud innovation means "while core data centers will remain essential, volume will increasingly focus on edge devices operating on AI," said Brandon Ebken, CTO at Insight Enterprises.

For years, the narrative around AI followed a heroic theme. The technology under development was set to help humanity advance on intractable problems. 

Thus far, AI has shown it can help bring efficiency to essential processes, but the technology faces hurdles in solving more complex issues by itself, especially those that require close understanding of issues with nuance, such as political views.

"Not every problem is best solved through the use of artificial intelligence," said Eric Cornelius, chief product architect at BlackBerry, speaking at CES 2021 in January. "But it seems that a growing number of problems are at least able to be solved by AI." 

In selecting the tasks AI can tackle within an organization, leaders should target the repetitive tasks that exploit AI's ability to multiply, parsing through volumes of data no human could. More complex problems, such as identifying fake news, remain outside AI's purview — at least for now.

Ethical challenges also stand in the way of an AI-for-everything paradigm. Data scientists are perfectly capable of producing algorithms that can autonomously make every decision in a given process, but there's genuine concern over the impact biased systems can have on the subjects of its decisions.

One application where AI has shown its advantage is in cyberthreat detection. AI networks are capable of assessing and identifying malware at speeds that are incomparable to humans.

"To detect a piece of malware, you're looking at a training set that's got billions of files, each file having over a million individual features," said Cornelius. "You just start to wrap your mind around those numbers, and no human could ever fathom make a detection."

Though AI cybersecurity tools can strengthen an organization's defense, cybercriminals have learned how to flip AI's weaknesses against it, which reinforces the importance of data reliability.  

For organizations, choosing where AI applications enter the picture should be guided by the impact algorithms can have on customers, and by the amount of high-level work it frees up from employees' desks.

AI models are helpful in reducing the amount of "low level, repetitive labor that humans have to do," said Kevin Guo, CEO of Hive. 

At times operating behind the scenes, AI products can produce "massive gains in efficiency and productivity," said Guo. "Maybe consumers don't see it directly, but it is affecting their day-to-day lives."

Organizations have seen value in the augmentative capabilities of AI, a trend further advanced during the pandemic. Algorithms sped up routine administrative tasks and bolstered customer service right as humans were overwhelmed in capacity.

"AI is never going to build a bridge," said Cornelius. "AI may build really great plans, it may give us the best blueprints for a bridge and do all the soil analytics. It might even file the paperwork for us. It's not gonna build the bridge."

That's not to say AI can't play a role in complex problems. IBM's AI capabilities are playing a role in tracking the massive volume of plastic debris clogging up the oceans.

"We're using AI to help track the marine plastic, and develop more accurate and effective processes to essentially eradicate that," said Bridget Karlin, global managing director, CTO and VP at IBM.

"I think with things like fake news, it's actually a pretty hard problem," said Guo. "It's something we haven't done well." AI for content moderation has shown to fare better in identifying things like nudity, drugs or violence, that are less subjective.

There are steps companies can take to ensure their algorithms remain as unbiased as possible. It requires spotting how and where bias influences an algorithm's decisions.

"We do believe AI can be engineered to be fair, but it is a choice," Karlin said. "It needs to be properly calibrated and programmed accordingly.