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Cloud Computing: Cumulative Five-Year Spending on Cloud IT to Exceed $1 Trillion
Business IT is rapidly migrating from traditional direct management of servers, software licensing and infrastructure to cloud computing. Gartner expects that the $114 billion spent by IT on cloud services this year to grow to more than $216 billion by 2020. Over the next five years that cumulatively translates into a shift of $1 trillion into cloud computing that would have otherwise been spent on traditional infrastructure.
Despite increased spending on Cloud Computing, spending on traditional IT still represents the largest fraction of total IT budgets. For example, total IT spending in 2020 is expected to reach $4.9 trillion. Total IT budgets are expected to only modestly increase annually over the next five years by 2 percent annually.
Ed Anderson, research vice-president at Gartner, said that “Cloud-first strategies are the foundation for staying relevant in a fast-paced world. The market for cloud services has grown to such an extent that it is now a notable percentage of total IT spending, helping to create a new generation of start-ups and ‘born in the cloud’ providers. Cloud shift is not just about cloud. As organizations pursue a new IT architecture and operating philosophy, they become prepared for new opportunities in digital business, including next-generation IT solutions such as the Internet of Things. Furthermore, organizations embracing dynamic, cloud-based operating models position themselves better for cost optimization and increased competitiveness.”
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