Public cloud growth forecast to accelerate despite everything
Analyst firm Gartner reckons end-user spending on public cloud services will grow by over 20% in what is set to be a turbulent 2023.
October 31, 2022
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Analyst firm Gartner reckons end-user spending on public cloud services will grow by over 20% in what is set to be a turbulent 2023.
Nobody thinks next year is going to be easy. The combination of high inflation, geopolitical drama and a continued hangover from the Covid lockdowns is exerting exceptional negative stress on the global economy. But life must go on and there are opportunities for those who choose to be bold when everyone else is on the defensive. Judging from its latest forecast, Gartner seems to think the public cloud market is almost recession-proof.
“Current inflationary pressures and macroeconomic conditions are having a push and pull effect on cloud spending,” said Sid Nag of 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.”
Here’s the full segmented Gartner forecast.
Worldwide Public Cloud Services End-User Spending Forecast (Millions of US Dollars)
2021
Cloud Business Process Services (BPaaS) | 54,952 | 60,127 | 65,145 |
Cloud Application Infrastructure Services (PaaS) | 89,910 | 110,677 | 136,408 |
Cloud Application Services (SaaS) | 146,326 | 167,107 | 195,208 |
Cloud Management and Security Services | 28,489 | 34,143 | 41,675 |
Cloud System Infrastructure Services (IaaS) | 90,894 | 115,740 | 150,254 |
Desktop-as-a-Service (DaaS) | 2,059 | 2,539 | 3,104 |
Total Market | 412,632 | 490,333 | 591,794 |
BPaaS = business process as a service; IaaS = infrastructure as a service; PaaS = platform as a service; SaaS = software as a service
Note: Totals may not add up due to rounding. Source: Gartner (October 2022)
“Cloud migration is not stopping,” added Nag. “IaaS will naturally continue to grow as businesses accelerate IT modernisation initiatives to minimize 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.
“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.”
Late last week fellow analyst house Synergy published its quarterly numbers on enterprise cloud infrastructure services spending, which said it exceeded $57 billion in Q3, up 24% on the year-ago quarter. As you can see from the only chart it provided below, Synergy’s numbers aren’t broken down by segment, but it presumably doesn’t include some of the segments Gartner does.