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Public cloud forecast to account for majority of IT spending by 2025

Hyperscalers rejoice, as new forecasts from Gartner on Wednesday predict an historic inflection point in IT spending.

According to the analyst firm, public cloud will account for more than half of global enterprise IT spending by 2025. What this means in terms of a dollar amount is that $917 billion of the predicted $1.8 trillion of enterprise IT spending in 2025 will go on public cloud solutions. By comparison, this year spending is expected to total $1.3 trillion, with $775 billion spent on traditional solutions versus $544 billion on public cloud.

Breaking this down a bit further: Gartner’s so-called ‘cloud shift’ research covers all enterprise IT categories within the application software, infrastructure software, business process service and system infrastructure markets that are able to make that transition to public cloud. It expects that by 2025, 51 percent of IT spending in these four categories will have shifted from traditional solutions to public cloud solutions, up from 41 percent this year.

“The shift to the cloud has only accelerated over the past two years due to COVID-19, as organisations responded to a new business and social dynamic,” noted Michael Warrilow, research vice president at Gartner, in a statement. “Technology and service providers that fail to adapt to the pace of cloud shift face increasing risk of becoming obsolete or, at best, being relegated to low-growth markets.”

Of course, it isn’t just enterprises that are putting their eggs in the public cloud basket; telcos are at it too. Dish Network is perhaps the poster child for this shift, with its ambitious plan to deploy its greenfield 5G network on Amazon Web Services (AWS). After a few delays, the big switch-on is expected to begin this year. Similarly, AT&T struck a deal last June to migrate its 5G network onto Microsoft Azure. Verizon is also using Azure, in this case to underpin its private mobile edge cloud service. North of that particular border, Bell Canada in July inked a deal to migrate various critical workloads – including IT, network functions and applications – to Google Cloud. It came less than two months after Bell teamed up with AWS to overhaul its business and consumer applications, as well as offer AWS-powered multi-access edge computing (MEC) services.

More recently, Telenor expanded its partnership with Amazon to jointly offer 5G and edge services to various industry verticals. In short, more and more telcos are coming to the conclusion that hyperscale public cloud offers a ready-made route for them, not just to address the enterprise IT market, but to also make their own networks cloud native.

As readers will no doubt have guessed by now, hyperscalers are the big winners out of all this, and recent quarterly financial reports show they’re already doing pretty well as things stand. Amazon last week said Q4 revenue at AWS jumped 40 percent year-on-year to $17.8 billion. Similarly, Google and Microsoft each reported impressive Q4 topline growth driven by their respective cloud businesses.

 

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