Monday, 25 July 2016 01:22

More than US$1 trillion in IT 'Cloud Shift' spending by 2020


Gartner expects that by 2020 "Cloud Shift" will "affect more than US$1 trillion in IT spending" with important must-do actions for IT asset managers.

The amount will be "directly or indirectly affected by the shift to cloud during the next five years", according to the acclaimed global analyst and research firm which says "this will make cloud computing one of the most disruptive forces of IT spending since the early days of the digital age".

Ed Anderson, research vice-president at Gartner said: "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 (see Table 1), helping to create a new generation of start-ups and ‘born in the cloud’ providers."

Here Gartner’s figure 1 shows the ‘Shift from traditional IT spending to cloud’


Source: Gartner (July 2016)

Gartner also states that IT spending is "steadily shifting from traditional IT offerings to cloud services" – the aforementioned "cloud shift".

We are told that "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 (see table 1)".

Table 1. Cloud shift summary by market segment (all figures in US dollars) 

1table 1 gartner

Source: Gartner (July 2016)

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

The company says that "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".

"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. Another example is that enterprise storage needs could be met with a lower up-front cost and far more scalability by switching to cloud solutions instead of buying dedicated hardware."

Anderson added: ”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.

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

Naturally, there is more detailed analysis is available to Gartner clients at relevant prices in the report "Market Insight: Cloud Shift — The Transition of IT Spending from Traditional Systems to Cloud."

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Alex Zaharov-Reutt

Alex Zaharov-Reutt is iTWire's Technology Editor is one of Australia’s best-known technology journalists and consumer tech experts, Alex has appeared in his capacity as technology expert on all of Australia’s free-to-air and pay TV networks on all the major news and current affairs programs, on commercial and public radio, and technology, lifestyle and reality TV shows. Visit Alex at Twitter here.

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