Cloud computing will account for an even bigger chunk of enterprise tech spending over the next few years, as businesses decide it's time to migrate even more applications and services.
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Spending on public cloud services is expected to grow 18.4% next year, to a total of $304.9 billion -- up from $257.5 billion in 2020, according to tech analyst Gartner. The proportion of total enterprise IT spending that goes on cloud computing is also expected to grow rapidly, from 9.1% in 2020 to 14.2% by 2024.
Some of this increased spending has been driven by the experience of businesses during the coronavirus epidemic. With most places of work closed, many organisations realised that pivoting to the use of cloud-based services was the only way to keep workers productive while working from home. It's not much use relying on an application or service that can only be accessed from the PC on your desk if it's gathering dust in a locked office.
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Gartner research vice president Sid Nag said that the COVID-19 pandemic forced organizations to focus on saving cash and optimising their IT costs while supporting a remote workforce: shifting spending to the cloud has become a convenient means to meet all of these requirements. Gartner said almost 70% of organizations using cloud services today plan to increase their cloud spending in the wake of the disruption caused by COVID-19.
"The increased use of public cloud services has reinforced cloud adoption to be the 'new normal,' now more than ever," said Nag.
Software as a service (SaaS) remains the largest sector of the cloud computing market, and is expected to grow to $117.7 billion in 2021 (16% year-on-year increase). Platform as a service (PaaS), which provides application infrastructure, is anticipated to grow faster -- 26.6% between 2020 and 2021. Gartner puts this increased consumption of PaaS down to the need for remote workers to have access to high-performing, scalable infrastructure, which mostly means relying on cloud-native applications. Desktop as a service (DaaS) is also likely to see significant growth, but from a low base.
The increase in cloud spending is likely to run for a few years as businesses increase investments in mobility, collaboration, and other remote-working technologies and infrastructure, the analyst firm said.
The pandemic effectively proved the value of the cloud to businesses, said Nag: "The ability to use on-demand, scalable cloud models to achieve cost efficiency and business continuity is providing the impetus for organizations to rapidly accelerate their digital business transformation plans."