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Technology Stocks : Cloud computing (On-demand software and services)

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From: FUBHO7/22/2016 2:37:09 PM
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More than $1 trillion in IT spending will be directly or indirectly affected by the cloud shift during the next five years, according to a report by Gartner. The company also says that the cloud will be one of the most impactful forces of IT spending since the early days of the digital age.

Traditional IT spending is shifting over to cloud services, and the market for cloud services has grown to a notable percentage of total IT spending, Gartner reports. The collective amount of cloud shift in 2016 alone is estimated to reach $111 billion, increasing to $216 billion in 2020. These rates are determined by comparing IT spending on cloud services with traditional non- cloud services in the same market category.


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For example, Gartner has labeled business process outsourcing as a legacy market segment whereas business process as-a-service (BPaaS) is the cloud segment of this same market. Together, the total market size of these segments is $119 billion, with $43 billion accounting for the cloud segment in 2016.

Similarly, Gartner calls system infrastructure a legacy market segment with infrastructure-as-a-service (IaaS) as its cloud twin. They’re collectively worth $294 billion, with $22 billion comprising the total cloud shift in this segment for 2016.

These are examples of the direct effects of cloud shift. However, there are many markets that are affected indirectly. Identifying these effects can help IT teams and managers ensure they are getting the best value for their use and are protected against risk, the Gartner report says. It can also help them identify new financial opportunities caused by the shift to cloud. For example, an enterprise’s storage needs could be fulfilled at a cheaper cost and with more scalability by using cloud systems instead of buying and maintaining hardware.
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