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‘Cloud shift’ to affect more than US$1 trillion in IT spending by 2020

Edited by Divina Paredes | July 22, 2016
IT asset managers must identify risks and opportunities and adjust vendor management styles, advises Gartner.

Gartner predicts more than US$1 trillion in IT spending will be directly or indirectly affected by the shift to cloud in the next five years.

This will make cloud computing one of the most disruptive forces of IT spending since the early days of the digital age, reports Gartner.

"Cloud-first strategies are the foundation for staying relevant in a fast-paced world," says Ed Anderson, research vice president at Gartner.

"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 startups and 'born in the cloud' providers."

Gartner research finds IT spending is steadily shifting from traditional IT offerings to cloud services (cloud shift).

The aggregate amount of cloud shift in 2016 is estimated to reach US$111 billion, increasing to US$216 billion in 2020.

Cloud shift rates are determined by comparing IT spending on cloud services with traditional non-cloud services in the same market categories.

Source: Gartner (July 2016)

In addition to the direct effects of cloud shift, many markets will be affected indirectly.

Identifying indirect effects can help IT asset and purchasing managers ensure they are getting the best value out of new expenditure and are protected against risk, as well as assisting them to exploit the new opportunities caused by cloud shift, says Gartner.

For example, instead of buying operating systems (OSs) for each user in the traditional way, many will be provided as OS images - particularly with the use of containers for next-generation applications.

Enterprise storage needs could also be met with a lower upfront cost and far more scalability by switching to cloud systems instead of buying dedicated hardware, says Gartner.

"Cloud shift is not just about cloud. As organisations 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," says Anderson.

"Furthermore, organisations embracing dynamic, cloud-based operating models position themselves better for cost optimisation and increased competitiveness."

Source: CIO


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