Though many businesses and industries have been hurt by the impact of COVID-19, some sectors have seen an increase in sales, with one of those being cloud providers. For 2021, worldwide spending on the public cloud is expected to rise by 18% to $304.9 billion, up from $257.5 billion in 2020, research firm Gartner said on Tuesday.
The percentage of IT spending shifting to the cloud will increase amid the coronavirus outbreak, comprising 14.2% of all global enterprise IT spending in 2024, up from 9.1% in 2020. Further, a recent Gartner survey found that almost 70% of organizations now using cloud services aim to bump up their cloud spending in the wake of the problems triggered by COVID-19.
“The pandemic validated cloud’s value proposition,” Gartner research VP Sid Nag said in a press release. “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.”
Among different types of cloud-based services, Software as a Service (SaaS) remains the largest area, projected to grow by around 16% to $117.7 billion in 2021 from $101.4 billion in 2020. But increased demand for Cloud Application Infrastructure Services, or Platform as a Service (PaaS) will drive spending in that segment to rise by a higher margin of 26.6%, from $43.8 million this year to $55.4 million next year. The greater need for PaaS is being propelled by remote employees who require access to high performing, content-rich, and scalable infrastructure to work with modern, cloud-native applications, according to Gartner.
Other cloud-based segments on track for growth next year and the following year include Cloud Business Process Services (BPaaS), Cloud Management and Security Services, Cloud System Infrastructure Services (IaaS), and Desktop as a Service (DaaS).
As organizations boost their investments in mobility, collaboration, and other remote working technologies, Gartner expects that growth in the public cloud will continue through 2024. Additional growth may come about as more cloud service providers team up with telecommunications companies to extend their reach into the edge and help support hybrid workforces.
“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,” Nag said. “Cloud adoption therefore becomes a significant means to stay ahead in a post-COVID-19 world focused on agility and digital touchpoints.”