Organizations are increasingly using cloud services for new initiatives or to replace existing systems, meaning that spending on traditional IT solutions is being reallocated to cloud. The result is what Gartner calls cloud shift, and it is happening more often due to a growing preference for “cloud-first.”
“Gartner’s cloud shift data reveals that enterprises are demonstrating continued preference for public cloud services compared with traditional non-cloud alternatives,” says Ed Anderson, Distinguished VP Analyst, Gartner. “The proportion of IT spending that is being allocated to cloud will accelerate even further in the aftermath of the COVID-19 crisis, as companies look to improve operational efficiencies.”
For example, the latest Gartner IT spending forecast shows that spending on data center systems is projected to be $188 billion in 2020, a 10% decrease from 2019. In contrast, spending on cloud system infrastructure services is expected to grow from $44 billion in 2019 to $63 billion in 2020, reaching $81 billion by 2022.
Cloud shift enables digital business opportunities
Cloud shift is not just about cloud. As organizations pursue new IT architectures and operating philosophies, they create a foundation for new opportunities in digital business, including next-generation IT solutions.
Organizations embracing dynamic, cloud-based operating models are primed for increased competitiveness, especially in today’s rapidly changing business environment. These organizations not only recognize the short-term benefits of cloud, but also position themselves to be early adopters of the disruptive innovations that will define the future.
The next major wave of technology disruption is already emerging in the form of artificial intelligence (AI), IoT, edge computing and advanced data analytics. These innovations are almost always tied to a cloud foundation as part of an organization’s digital business technology platform.