infoTECH Feature

July 17, 2012

Enterprise Spending on Cloud is Up, IT Spending Down: Gartner

If you need further proof that cloud computing is disrupting IT, take a look at the latest statistics from Gartner (News - Alert), which show that enterprise spending on cloud is growing faster than overall IT spending – a trend that’s posing a challenge to legacy-based hardware and software makers.

Cloud computing is expected to grow 19 percent in 2012, becoming a $109 billion industry compared to a $91 billion market last year, according to Richard Gordon, research vice president at Gartner.

By 2016, it’s expected to be a $207 billion industry, according to Gartner’s latest findings. That compares to the 3-percent growth expected in the overall global IT market.

“Business process as a service (BPaaS) still accounts for the vast majority of cloud spending by enterprises, but other areas such as Platform-as-a-Service (PaaS), Software-as-a-Service (SaaS (News - Alert)) and Infrastructure-as-a-Service (IaaS) are growing faster,” Gordon said.

Worldwide IT services spending is forecast to reach $864 billion in 2012 – a 2.3-percent increase from 2011. Gartner said that demand for consulting services is expected to remain high due to the complexity of environments for global business and technology leaders.

Consulting itself is becoming increasingly technology-based with the rise of analytics and big data, having deep implications on the future of consulting services, according to Gordon.

But while the $109 billion cloud market represents just a 3-percent chunk of the overall $3.6 trillion spent on IT globally, it’s still responsible, in part, for a slowdown in growth for traditional on-premises hardware and software sales.

The bulk of cloud spending by enterprises will be on cloud-based business process software, followed by Platform-as-a-Service (PaaS), Software-as-a-Service (Saas) and Infrastructure-as-a-Service, according to Gartner analyst Richard Moore.

An increase in net connections, especially in emerging markets, and the adoption of multiple connected devices in the mature markets, is expected to ensure a growth in telecom services, pegged by Gartner at $1.686 trillion.

While large enterprises certainly invest their fair share in IT, small- and medium-sized businesses (SMB) are leading the charge in IT spending – from security products to cloud computing, TMCnet reported.

“If you break it down and take a close look at where the experts see SMBs investing their IT dollars, it’s easy to see how small businesses may be bucking the economic trends to continue making investments in critical solutions, as well as technologies that will enable them to enhance productivity,” GFI Software’s Sandra Goldstein wrote in a recent blog post.

In fact, TMCnet reported that Spiceworks (News - Alert) found that cloud services are now used by 48 percent of SMBs – an increase from 28 percent during the first half of last year. It cited Web hosting, e-mail hosting, backup, content filtering and application hosting as the top five cloud services now in use by SMBs.


Want to learn more about cloud computing solutions geared specifically toward small- to medium-sized businesses? Then be sure to attend the
Cloud4SMB Expo, collocated with ITEXPO West 2012 taking place Oct 2-5, in Austin, TX. Cloud4SMB Expo is the first event of its kind to focus on the unique needs and challenges of SMBs seeking to leverage the benefits of cloud computing solutions. The conference is dedicated to real-world business strategies and implications for growing businesses utilizing the cloud and will provide the knowledge and information SMBs need to compete and succeed. For more information on registering for the Cloud4SMB Expo click here.

Stay in touch with everything happening at Cloud4SMB Expo. Follow us on Twitter.




Edited by Braden Becker
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