Twenty-eight percent of spending within key enterprise IT markets will shift to the cloud by 2022, up from 19 percent in 2018, according to a new report from Gartner. According to the report, (“Market Insight: Cloud Shift — 2018 to 2022”), growth in enterprise IT spending on cloud-based offerings will be faster than growth in traditional, non-cloud IT offerings. But despite this growth, traditional offerings will still constitute 72 percent of the addressable revenue for enterprise IT markets in 2022.
“The shift of enterprise IT spending to new, cloud-based alternatives is relentless, although it’s occurring over the course of many years due to the nature of traditional enterprise IT,” said Gartner research vice president Michael Warrilow. “Cloud shift highlights the appeal of greater flexibility and agility, which is perceived as a benefit of on-demand capacity and pay-as-you-go pricing in cloud.”
By 2022, almost one-half of the addressable revenue will be in system infrastructure and infrastructure software, according to Gartner. System infrastructure will be the market segment that will shift the fastest between now and 2022 as current assets reach renewal status. Moreover, it currently represents the market with the least amount of cloud shift. This is due to prior investments in data center hardware, virtualization and data center operating system software and IT services, which are often considered costly and inflexible.
More than $1.3 trillion in IT spending will be directly or indirectly affected by the shift to cloud by 2022, according to Gartner. Providers that can capture this growth will drive long-term success through the next decade.
Technology providers can use cloud shift as a key data point in determining market opportunity. Other key data points worthy of consideration include growth rates and addressable market size in each of the targeted areas, including system infrastructure, infrastructure software, application software and business process outsourcing.