Industry experts offer predictions on how Cloud will evolve and impact business in 2026. Part 2 covers FinOps, Sovereign Cloud and more.
COST OPTIMIZATION
Cost optimization will be focused as cloud cost is accelerated: With cloud and infrastructure costs soaring, companies will place a strong emphasis on the cost-effectiveness of observability in 2026. The economic climate is pushing enterprises to demand more value from monitoring and APM investments, favoring solutions that are efficient and budget-friendly over those packed with unnecessary features. We anticipate a shift in how observability tools are evaluated, with total cost of ownership (TCO) and predictable pricing models becoming the top criteria for decision-makers.
In practice, this means businesses will gravitate toward platforms that can handle large data volumes without runaway costs (through better data compression, smart sampling, or usage-based pricing caps). Open-source and open-standards-based stacks (like OpenTelemetry with object storage backends) are also attractive for controlling costs, as they help avoid expensive vendor lock-in. Moreover, organizations will look to optimize what data is collected and retained, aligning observability with value generation. Every telemetry data point stored should provide actionable insight, and if it doesn't, it's an opportunity to cut data storage costs.
In summary, cost optimization is becoming a first-class goal of observability strategies. Teams will seek to do more with less, maintaining full visibility into systems while keeping the monitoring budget under control in an era of accelerated cloud spending.
Sam Suthar
Founding Director, Middleware
FINOPS
As organizations continue reporting disappointing results from early AI experiments, 2026 will mark a reset where companies return to the basics. Companies are beginning to realize that the AI hype cycle without defined outcomes or financial governance is risky and successful leaders will build FinOps roadmaps that optimize their AI usage for their unique business goals and measurable ROI. In the year ahead, leaders must remember that FinOps isn't just about cutting costs: it's about bridging the gap between finance, engineering, and business teams to work around shared goals, ensuring that AI investments deliver a measurable and lasting impact without stunting innovation. Companies that treat FinOps as a key strategic step rather than an afterthought will be the ones turning their 2025 AI investments into 2026 success stories.
Jay Litkey
SVP of Cloud & FinOps, Flexera
AGENTIC FINOPS
Agentic FinOps to drive cloud cost efficiencies: Agentic FinOps represents the next evolution of Cloud Financial Operations (FinOps) by integrating autonomous AI agents into cost management workflows. FinOps will encompass LLMs and related services alongside traditional cloud offerings. The focus will shift from simply reporting and recommending to actively executing optimizations.
Sunil Senan
Global Head of Data, Analytics and AI, Infosys
SOVEREIGN CLOUD
The "For What?" Year of the Sovereign Cloud: Until now, sovereign cloud has long been treated as a necessary ideal — important, but not yet fully defined, scoped, and prioritized. Despite strong government commitments, progress has been slowed by the absence of clear regulations to drive adoption. In 2026, that will begin to change. Nations will start aligning sovereign cloud initiatives with their broader digital strategies, tying deployments to innovation goals in startups, academic research, and AI ecosystems. This will be the year sovereign cloud shifts from concept to purpose-driven implementation.
Kevin Cochrane
CMO, Vultr
GEO-ALIGNED CLOUD
Geo-Aligned Cloud Ecosystems Have Arrived: Cloud strategy will become as much about sovereignty as it is about scale. Enterprise leaders must navigate a complex web of regional data laws and compliance standards that shape where and how they deploy AI infrastructure. Already, a majority of enterprises have adapted their cloud strategies in response to geopolitical pressures. In 2026, that number is expected to climb. Localized compliance frameworks will no longer be an exception; they'll be a core KPI measured against AI and cloud implementation strategies.
In this new era, enterprises will prioritize trusted geography over pure cost efficiency, and multinational organizations will shift toward multi-cloud-by-design architectures, striking a balance between performance and resilience. This evolution has direct implications for the nearly 70% of business leaders who feel unprepared to manage external risks such as regulatory uncertainty and market volatility. The same proportion reports that their current cloud environments evolved "by accident, not by design," and nearly all (95%) say they would redesign their cloud strategies if given the opportunity.
Dennis Perpetua
Global CTO Digital Workplace Services & Experience Officer, VP & Distinguished Engineer, Kyndryl
MOTION VS. SCALE
The next phase of cloud innovation will be defined by motion, not scale. In 2026, the most successful organizations will treat data as a living, moving entity, flowing freely between clouds and edge environments. The cloud wars won't be about who stores your data, but who can move it fastest, safest, and with the most context.
Dr. Hema Raghavan
Head of Engineering and Co-Founder, Kumo
CONVERGENCE OF CLOUD OBSERVABILITY AND SECURITY
By 2026, cloud observability and security will be inseparable disciplines. As enterprises embrace multi-cloud and cross-network architectures, performance degradation and misconfigurations will often share the same root cause: policy inconsistency. The future lies in continuous posture assurance — monitoring every configuration change against desired state and business intent. Organizations will demand unified visibility that connects cloud performance metrics with compliance posture, turning observability into a governance-grade control layer for cloud operations.
Erez Tadmor
Field CTO, Tufin
CLOUD FOR MAC
Mac will likely become a more leveraged cloud service and will expand beyond development use cases as capabilities like containerization and AI processing are exposed to customers. The cloud for Mac users will lean toward hybrid environments where edge-to-cloud architectures make the most of the capabilities of on-device processing and private cloud infrastructures. This will serve everything from remote work environments to AI inference and Linux workloads on low-cost, high-compute, low-energy resources.
Chris Chapman
CTO, MacStadium