Cloud Computing Spending To Raise To USD 13 Billion In 2014, Cloud Influences Overall IT Growth

Cloud Computing Spending

U.S. companies will be spending over USD 13 billion on Cloud Computing in 2014 compared to USD 3 billion in 2010, a report by In-Stat showed last week. Thus, cloud spending will more than quadruple in less than three years proving that Cloud Computing, SaaS, IaaS, PaaS and other cloud-based services are the fastest growing sectors in the IT industry these days.

Although spending across all sectors and size of business is projected to grow, there are some segments where growth will be staggering. The professional services and healthcare verticals will see the largest growth in spending on cloud computing services, growing over 124% between 2010 and 2014,” Greg Potter, Research Analyst at In-Stat, said in a press release.

The statement that cloud-based services are fueling the overall IT growth is backed by a recent survey conducted by Gartner. The IT sector will witness total spending worth USD 3.6 this year, a growth of 5.1 percent, year-on-year. Hardware sector, however, will face decreasing pace of growth during 2011, the survey reads. Software spending growth will reach 8.9 percent in 2011 compared to 6.1 percent in 2010, while hardware spending growth will slow down to 6.1 percent annually compared to 8.9 percent last year.

Cloud Computing Costs

Cloud computing offers significant cost reductions related to on-site infrastructure, thus a growing number of companies rely on cloud-based services to take advantage of external hardware infrastructure and benefit from services that charge only per connection to web based applications that eliminate costs related to licenses and on-site support. Those IT budget savings, however, are usually invested in more advanced IT solutions fueling the industry growth even in times of crisis.

As the global economy repairs itself in coming years, we are optimistic about continued healthy spending on IT,” Richard Gordon, research vice president of Gartner, said. His statement reflects views of many analysts who already expressed their confidence the growth in IT sector will continue to gain pace in the next decade.

Such statements have a solid ground bearing in mind that about two-thirds of medium-sized companies are adopting cloud computing technologies, according to recent study published by research firm KS&R. According to the study, more than 65 percent of all medium-sized companies in over 20 countries have already deployed cloud-based solutions in the business or plan to invest in cloud computing technologies in the foreseeable future. Moreover, 53 percent of respondents revealed their companies will invest more in IT solutions in the next 12 to 18 months.

Mid-size firms are tackling a new set of opportunities to advance their role as engines of economic growth,” Andy Monshaw, general management for midmarket at the company that commissioned the study, said in a press release.

A growing number of medium-sized businesses start to look for “consultative” relationships with their core providers instead of developing “purely transactional” relationship, the survey found. Such a change is indicative for an evolving business mentality that is heavily influenced by the rapidly changing IT environment. The years to come will bring not only growing spending on IT equipment and services but a brand new business models driven by cloud-based solutions and approaches.

By Kiril Kirilov

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