Covid-19: Pandemic-induced surge in public cloud spend predicted to run until 2024

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Gartner’s latest worldwide public cloud market spend forecast suggests the acceleration in off-premise adoption seen since the start of the pandemic is set to last for a long time yet

Caroline Donnelly

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Published: 17 Nov 2020 12:45

Global spending on public cloud services will be up 18.4% in 2021 and hit  $304.9bn, fuelled by the uptick in demand for off-premise services caused by the Covid-19 pandemic.

That is according to market watcher Gartner’s latest worldwide public cloud user spending forecast, which predicts the surge in public cloud adoption the pandemic has brought about this year will continue through to 2024.

This is on the back of findings from a separate Gartner report that suggests around 70% of cloud-using organisations plan to increase their adoption of the technology in direct response to the pandemic.

“The Covid-19 pandemic forced organisations to quickly focus on three priorities: preserve cash and optimise IT costs, support and secure a remote workforce, and ensure resiliency,” said Sid Nag, research vice-president at Gartner. “Investing in cloud became a convenient means to address all three of these needs.”

In line with this, the company predicts Covid-19 will serve to ensure that cloud will account for 14.2% of the total global enterprise IT spending in 2024, up from 9.1% in 2020.

As Nag puts it, the pandemic has served to “validate the cloud value proposition” and prompted companies to step up their migration plans accordingly.

“The ability to use on-demand, scalable cloud models to achieve cost efficiency and business continuity is providing the impetus for organisations to rapidly accelerate their digital business transformation plans,” he said. “The increased use of public cloud services has reinforced cloud adoption to be the ‘new normal’, now more than ever.”

In terms of where enterprises are directing their spend, Gartner confirmed that Software as a Service (SaaS) remains the largest segment within the public cloud space and is on course to trap $117.7bn of enterprise investment by 2021, which constitutes a rise of 15% since 2020.

However, the segment that is expected to experience the biggest uptick in spending is platform as a service (PaaS), with Gartner predicting growth of 26.6% to $55.4bn in 2021.

“The increased consumption of PaaS is driven by the need for remote workers to have access to high performing, content-rich and scalable infrastructure to perform their duties, which largely comes in the form of modernised and cloud-native applications,” the analyst house, said in the accompanying research note.

And looking ahead, cloud is set to play an important role in many firms’ post-pandemic recoveries, said Nag, which will fuel spending in this area even further.

“As CIOs think more strategically about how to lay the foundations to support a return to growth, it is clear that the move to digital and associated services will play a big role for organisations in the future,” he said.

“Cloud adoption therefore becomes a significant means to stay ahead in a post-Covid world focused on agility and digital touchpoints.”

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