Gartner has projected end-user spending on public cloud services worldwide to grow 20.7 per cent year-on-year to total $591.8bn in 2023
With general spending on IT globally forecasted to grow 5 per cent next calendar year, today’s projection from tech research and consultancy Gartner surpasses spending growth predicted in this market for 2022.
“Current inflationary pressures and macroeconomic conditions are having a push and pull effect on cloud spending,” said Sid Nag, vice-president analyst at Gartner.
“Cloud computing will continue to be a bastion of safety and innovation, supporting growth during uncertain times due to its agile, elastic, and scalable nature.
“Yet, organisations can only spend what they have. Cloud spending could decrease if overall IT budgets shrink, given that cloud continues to be the largest chunk of IT spend and proportionate budget growth.”
All segments in the public cloud space are expected to see growth, with Infrastructure-as-a-Service (IaaS) set to experience the highest growth in 2023 at 29.8 per cent.
“Cloud migration is not stopping,” said Nag. “IaaS will naturally continue to grow as businesses accelerate IT modernisation initiatives to minimise risk and optimise costs.
“Moving operations to the cloud also reduces capital expenditures by extending cash outlays over a subscription term, a key benefit in an environment where cash may be critical to maintain operations.”
PaaS and SaaS to overcome inflation challenges
Meanwhile, Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) are expected to be the segments most impacted by inflation, due to staffing challenges and focus on margin protection.
Despite this, both segments will still see continued growth according to Gartner, with forecasts of 23.2 per cent growth for PaaS and 16.8 per cent for SaaS in 2023.
Nag continued: “Higher-wage and more skilled staff are required to develop modern SaaS applications, so organisations will be challenged as hiring is reduced to control costs.
“But since PaaS can facilitate more efficient and automated code generation for SaaS applications, the rate of PaaS consumption will consequently increase.
“Despite growth, profitability and competition pressures, cloud spending will continue through perpetual cloud usage. Once applications and workloads move to the cloud they generally stay there, and subscription models ensure that spending will continue through the term of the contract and most likely well beyond.
“For these vendors, cloud spending is an annuity – the gift that keeps on giving.”
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