Gartner Predicts That Global Total Expense For Public Cloud Will Increase By 18% in 2021

Gartner Predicts That Global Total Expense For Public Cloud Will Increase By 18% in 2021

According to Gartner, enterprises around the world are predicted to spend an increase of 18.4% in Public Cloud expenses in 2021, $304.9 billion, up from $257.5 billion in 2020.

Sid Nag, Research Vice President at Gartner said that “The pandemic validated cloud’s value proposition. The ability to use on-demand, scalable cloud models to achieve cost efficiency and business continuity is providing the impetus for organizations to rapidly accelerate their digital business transformation plans. The increased use of public cloud services has reinforced cloud adoption to be the ‘new normal,’ now more than ever.”

The proportion of IT expense that is shifting to the cloud will accelerate in the aftermath of the COVID-19 crisis, with cloud estimated to make up 14.2% of the total global enterprise IT spending market in 2024, up from 9.1% in 2020.

Even though software as a service (SaaS) remains the largest market segment and is projected to grow to $117.7 billion in 2021, application infrastructure services (PaaS) are anticipated to grow at a higher rate of 26.6% (see Table 1). The increased consumption of PaaS is driven by the need for remote workers to have access to high-performing infrastructure and balance resource scaling to perform their duties.

Cloud Business Process Services (BPaaS)45212447414752150336
Cloud Application Infrastructure Services (PaaS)37512438235548668964
Cloud Application Services (SaaS)102064101480117773138261
Cloud Management and Security Services12836148801700119934
Cloud System Infrastructure Services (IaaS)44457514216526482225
Desktop as a Service (DaaS)616120419452542

Table 1: Prediction on worldwide enterprise expenses for Public Cloud services (in million U.S. dollars) 

Sid Nag further shared, “The Covid-19 pandemic forced organizations to quickly focus on three priorities: 

  • Preserve cash and optimize IT costs
  • Support and secure a remote workforce
  • Ensure resiliency 

“Investing in the cloud became a convenient means to address all three of these needs.”

In fact, recent Gartner survey data demonstrates that almost 70% of organizations using Cloud services today plan to increase their Cloud spending due to the disruption caused by COVID-19.

As enterprises increase investments in mobility, collaboration, and other remote working technologies and infrastructure, Gartner expects growth in Public Cloud to be maintained through 2024. The increasing trend of Cloud service vendors collaborating with telecom firms to extend their reach and support workforce may also lead to further market growth.

“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 organizations in the future,” said Mr. Nag. “Cloud adoption, therefore, becomes a significant means to stay ahead in a post-COVID-19 world focused on agility and digital touchpoints.”


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