Enterprise IT spending on public cloud computing within addressable market segments (application software, infrastructure software, business process services and system infrastructure markets) will overtake spending on traditional IT in 2025, according to Gartner. Of note, most (65.9 per cent) of spending on application software will be directed toward cloud technologies in 2025.
In 2022, more than $1.3 trillion in enterprise IT spending is at stake from the shift to cloud, growing to almost $1.8 trillion in 2025, according to Gartner.
Accelerating levels of cloud adoption have been the norm over the past two years as organisations responded to a new business and social dynamic induced by COVID-19. The cloud shift rate is proving to be faster than pre-COVID-19 forecasts indicated.
Demand for integration capabilities, agile work processes, and composable architecture will drive a continued shift to the cloud as long-term digital transformation and modernisation initiatives are brought forward to 2022. Technology and service providers (TSPs) that fail to adapt to the pace of cloud shift face an increased risk of becoming obsolete or, at best, being relegated to low-growth markets.
Ongoing disruption will be amplified by introducing new technologies, including distributed cloud, which brings public cloud services into domains that have historically been non-cloud, expanding the addressable market. Distributed cloud appeals to organisations due to its ability to meet location-specific network bandwidth, regulatory compliance and data sovereignty.
To capture the market opportunities associated with cloud computing, TSPs must target segments where cloud shift is occurring most aggressively, in addition to seeking new high-growth cloud opportunities.
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