Cloud computing is an essential element of a company’s digital transformation. As organizations — small, medium, and large enterprises — are urged to adapt and scale innovation, industry analyst Gartner predicts the public cloud spending will grow by 17% in 2020 to total $266.4 billion, up from $227.8 billion in 2019.
“At this point, cloud adoption is mainstream,” said Sid Nag, research vice president at Gartner. “The expectations of the outcomes associated with cloud investments, therefore, are also higher. The adoption of next-generation solutions is almost always ‘cloud-enhanced’ solutions, meaning they build on the strengths of a cloud platform to deliver digital business capabilities.”
The Gartner forecast sees software as a service (Saas) to have the largest chunk of the market segment and is seent to grow to $116 billion next year. The industry analyst attributes the growth to the scalability of subscription-based software.
It is followed by infrastructure as a service (IaaS) or the cloud system infrastructure services, which is expected to reach $50 billion in 2020 or a growth of 24% year over year. This is the highest growth rate across all market segments, according to Gartner. This growth is attributed to the demands of modern applications and workloads, which require infrastructure that traditional data centers cannot meet.
CIOs (chief information officer) will be looking at increasing investments in three areas of cloud computing as companies are either expanding or catching up in migrating to the cloud.
“Building, implementing and maturing cloud strategies will continue to be a top priority for years to come,” said Nag. “The cloud-managed service landscape is becoming increasingly sophisticated and competitive. In fact, by 2022, up to 60% of organizations will use an external service provider’s cloud-managed service offering, which is double the percentage of organizations from 2018. Cloud-native capabilities, application services, multicloud and hybrid cloud comprise a diverse cloud ecosystem that will be important differentiators for technology product managers. Demand for strategic cloud service outcomes signals an organizational shift toward digital business outcomes.”