AI and the cloud: Getting it right for 2026

Traders are keeping tabs on earnings from tech giants Oracle and Broadcom this week – Copyright AFP Prakash MATHEMA

Business technology could go in different directions in 2026 and the situation certainly appears turbulent. To help make sense of the situation is Larry O’Connor, Founder and CEO, Other World Computing (OWC), who tells Digital Journal about three possible trajectories that technologies like AI and the cloud could take.

2026 Prediction 1: On-Prem Comes Back, Not as a Rebellion Against Cloud, but as the Sensible Default for Performance, Cost, and Control

According to O’Connor: “In 2026, more teams are going to rediscover the joy of having their data and workflows close to where the work actually happens. Not because the cloud is bad. The cloud is a great tool. It is just not the right answer for everything, especially when you are talking about performance, predictable costs, and keeping control of your own data.”

O’Connor expand on his though processes: “What I am seeing is this: it is easy to move a workflow up into the cloud, and then you wake up one day and realize you are paying for every little thing, and you are also at the mercy of a lot of services you cannot fix or influence. If your internet is flaky, or the provider has an outage, or you get hit with egress costs at the exact moment you need your data, that is not a strategy. That is a hope. In 2026, the smart shops will keep cloud as redundancy and reach, but they will rebuild the core on-prem so they can get their job done with less drama.”

2026 Prediction 2: The Real Differentiator Will Be ‘Boring’ Infrastructure: High Performance Tech That Disappears into the Workflow

On the subject of infrastructure, O’Connor notes: “I think 2026 is the year more people stop buying ‘fancy numbers’ and start buying results. Everybody can show a chart. Everybody can promise the sky. But in the real world, what matters is whether the product is low overhead, dependable, and actually makes your day easier. The best compliment we can get is that someone forgets we are there, because they are too busy getting real work done.”

As to other patterns, O’Connor sees: “More buyers are going to get tired of the enterprise pattern where you buy the thing, and then you learn you need ten other modules, another server, and a pile of add-ons to get what you thought you already purchased. That is not delight. That is aggravation. In 2026, the winners are going to be the companies that show up, evaluate the environment honestly, and deliver what the customer actually needs, with the least amount of fuss. Under promise. Over deliver. And make it work in the real workflow, not just in a lab.”

2026 Prediction 3: AI Becomes a Creative Partner – but the Creativity Remains Human

What benefit will AI bring next year? O’Connor foresees: “AI finally settles into its proper role for creatives, in 2026. It stops trying to be the artist and starts becoming the best assistant a cinematographer, editor, or photographer has ever had. The true creative spark still lives with the human, not in the machine. You can’t automate taste, timing, instinct, and storytelling. What AI can do is clear the runway so creators can spend more time making decisions that actually matter.”

Businesses need to think about the bugger picture, says O’Connor: “Those that rethink where AI lives in the workflow will be the teams that get this right. Instead of pushing raw footage and unreleased work into distant clouds, they will bring AI closer to the media and closer to the creator. When AI runs next to your storage, things happen at the speed of thought. You can test an idea, throw it away, try another, and never break your flow. That immediacy changes how people create. In 2026, the most successful creative teams will not be the ones chasing the biggest models. They will be the ones who build infrastructure that keeps humans in control, keeps their content private, and lets AI quietly do the heavy lifting in the background while the creativity stays exactly where it belongs.”