5 cloud trends to watch for in 2026

Private and sovereign clouds on the rise

From in-house data centers to public cloud, companies have come full circle back to the idea of directly controlling their own IT assets. The new wrinkle is that this privatization is occurring in the cloud rather than in the corporate data center. Given the number of public cloud security breaches, organizations are tightening up by launching their own private clouds that IT runs on a dedicated, non-shared platform.

In Broadcom's May 2025 Private Cloud Outlook report, 53% of senior IT decision-makers cited building new workloads in private cloud environments as a top three-year priority.

Organizations are also choosing sovereign clouds, which combine IT control over their cloud with built-in regulatory, privacy, security and legal guidelines that conform to those of the industry or region in which the company operates. Sovereign clouds take the regulatory and compliance headaches out of IT, and are especially welcome in industries like finance, education, healthcare and pharmaceuticals.

Multi-cloud adoption set to increase as cloud provider costs rise

As companies continue the march to cloud-based systems, the industry will revisit the IT cloud supply chain. Companies are asking two questions:

• Is corporate IT placing too much reliance on one or two cloud vendors?
• What happens if one of these vendors experiences a service outage, becomes financially unstable or raises prices?

Flexera's 2025 State of the Cloud report saw that 70% of respondents embrace hybrid cloud strategies, using at least one public and one private cloud. IT's desire to diversify its cloud hosting platforms will spearhead the adoption of a multi-cloud IT architecture.

IT teams' interest in a diversified cloud hosting platform enable them to gain several benefits, including the following:

• Risk reduction.
• No vendor lock-in.
• Lower costs.

Cloud vendors are expected to raise prices in 2026. Some key drivers of rising costs include rising energy costs driven by new data centers going online to run AI, and increased hardware costs.

Also, cloud providers are being flooded with requests for new services that they might not have in-house. Their need to address these new customer “asks" could lead to budget overruns for cloud providers.

IT teams focus on end-to-end security in the cloud

In the hybrid cloud environment, airtight security across clouds and back to on-premises data centers is critical.

Comprehensive, uniform security policies

IT departments will focus on updating security policies and working with auditors to ensure they are uniformly applied across all clouds, edge locations and data centers. For IT, this requires staff to upskill in cloud-based security tools so IT can take charge of cloud security management that it hasn't handled in the past.

In the multi-cloud data transfer space, more enterprises will adopt cloud identity and entitlement management to manage and monitor user identities and access activities as users move between clouds. Companies will also use cloud-to-cloud encryption for data that moves across clouds.

Observability tools

Companies will likewise recognize that greater granularity is needed to observe and act on multi-cloud and on-premises IT activities. Current network monitoring tools can't provide this granularity, but observability tools can. With observability, IT can drill down into transaction workflows, system logs, container activities, user credentials and locational breaches and anomalies.

The micro cloud edge rises as a cost-effective option

A micro cloud edge fuses edge deployments with cloud computing. In essence, edge sites have their own mini clouds that contain preconfigured hardware and containerized software, ready to go and easy to deploy.

Because the micro cloud will perform the majority of edge processing cost-effectively, IT and end users will look to the micro cloud edge to avoid sending data payloads across larger cloud platforms. Edge micro-clouds and software stacks run primarily with open source tools, which lowers costs.

Cloud hyperscaling to power enterprise AI workloads

IT has traditionally used cloud hyperscaling to rapidly build out infrastructure across a cloud provider's multiple servers and data centers -- an agility strategy that can't be achieved in-house. In 2026, cloud hyperscaling will assume a new "twist" as it begins to be used to synchronously run large payloads of enterprise AI systems across multiple servers and data centers in an open source environment that helps keep costs down and prevents vendor lock-in.

Mary E. Shacklett is president of Transworld Data, a technology analytics, market research and consulting firm.