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Home Technology Infrastructure & Platforms Cloud, Virtualization, Operating Environments and Middleware

Cloud strategies shift from differentiation to capabilities

FutureCIO Editors by FutureCIO Editors
April 21, 2022
Photo by Oleg Magni from Pexels: https://www.pexels.com/photo/person-typing-on-computer-keyboard-2058128/

Photo by Oleg Magni from Pexels: https://www.pexels.com/photo/person-typing-on-computer-keyboard-2058128/

Worldwide end-user spending on public cloud services is forecast to grow 20.4% in 2022 to total $494.7 billion, up from $410.9 billion in 2021, according to the latest forecast from Gartner, Inc. In 2023, end-user spending is expected to reach nearly $600 billion.

Sid Nag

Sid Nag, research vice president at Gartner, calls the cloud a powerhouse that drives today’s digital organisations.

“CIOs are beyond the era of the irrational exuberance of procuring cloud services and are being thoughtful in their choice of public cloud providers to drive specific, desired business and technology outcomes in their digital transformation journey,” he opines.

Infrastructure-as-a-service (IaaS) is forecast to experience the highest end-user spending growth in 2022 at 30.6%, followed by desktop-as-a-service (DaaS) at 26.6% and platform-as-a-service (PaaS) at 26.1% (see Table 1).

The new reality of hybrid work is prompting organisations to move away from powering their workforce with traditional client computing solutions, such as desktops and other physical in-office tools, and toward DaaS, which is driving spending to reach $2.6 billion in 2022. Demand for cloud-native capabilities by endusers accounts for PaaS growing to $109.6 billion in spending.

Table 1. Worldwide Public Cloud Services End-User Spending Forecast (Millions of U.S. Dollars)

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 (April 2022)

“Cloud-native capabilities such as containerisation, database platform-as-a-service (dbPaaS) and artificial intelligence/machine learning contain richer features than commoditised compute such as IaaS or network-as-a-service,” said Nag.

This makes them generally more expensive which is fuelling spending growth, he opined.

SaaS remains the largest public cloud services market segment, forecasted to reach $176.6 billion in end-user spending in 2022. Gartner expects steady velocity within this segment as enterprises take multiple routes to market with SaaS, for example via cloud marketplaces, and continue to break up larger, monolithic applications into composable parts for more efficient DevOps processes.

Emerging technologies in cloud computing such as hyperscale edge computing and secure access service edge (SASE) are disrupting adjacent markets and forming new product categories, creating additional revenue streams for public cloud providers.

“Driven by the maturation of core cloud services, the focus of differentiation is gradually shifting to capabilities that can disrupt digital businesses and operations in enterprises directly,” said Nag.

He added that public cloud services have become so integral that providers are now forced to address social and political challenges, such as sustainability and data sovereignty.

He posited that IT leaders who view the cloud as an enabler rather than an end state will be most successful in their digital transformational journeys. “The organisations combining cloud with other adjacent, emerging technologies will fare even better,” he concluded.

Related:  Top trends impacting I&O for 2024
Tags: cloud application infrastructure servicescloud application servicesCloud Business Process ServicesCloud Management and Security Servicescloud system infrastructure servicesdesktop as a serviceGartnerpublic cloud
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