AGC's Cloud Native Technology Q1 2025 Market Update

As the demands of modern enterprises evolve, cloud native technologies are reshaping business strategies by delivering agility, scalability, and resilience. The cloud native software market, projected to grow at a 23% CAGR to $20B in 2029, is being driven by increased adoption across containerization, microservices, and observability solutions, enabling organizations to innovate and streamline operations. Moreover, as cloud native IT environments mature and transition to the "era of AI," AI integration within cloud native frameworks take on new importance. In this context, cross-cloud interoperability, unified management and operations, observability, data governance and cloud cost management become key elements in managing complex IT environments designed to dynamically respond to business requirements.

At the same time, hybrid and multi-cloud strategies continue to gain traction, providing flexibility, cost efficiency, and vendor independence, while private clouds remain essential in regulated industries such as healthcare and finance. While the hyperscalers' public clouds dominate data workloads, repatriation has emerged as a key theme, with 83% of enterprise CIOs now planning to shift some workloads away from public clouds to on-premise environments – up sharply from 43% in 2020.

As cloud native adoption accelerates, security has become a critical focus, with organizations increasingly integrating SecOps tools like IaC scanning and runtime threat detection to ensure compliance and protect highly distributed environments. This investment in security not only mitigates risk but also supports the rapid scaling of cloud native applications.