Published on the 26/11/2020 | Written by Heather Wright

Pandemic made cloud a commodity…

Public cloud spending is continuing to soar, with Gartner forecasting an 18 percent increase in total spend over the coming year, in further confirmation that remote working has made cloud a commodity.

For Australia, the love of cloud will see Australian organisations spending almost AU$10.4 billion on public cloud services in 2021, up 18.2 percent.

That’s marginally below the 18.4 percent growth forecast worldwide, pushing the global spend to $304 billion, up from $257.5 billion.

“Cloud adoption becomes a significant means to stay ahead in a post-Covid-19 world focused on agility and digital touchpoints.”

Software as a service leads the charge both locally and globally. Worldwide, it accounted for US$101 billion in spend in 2020, and is expected to climb to $117.7 billion next year. In Australia it’s logging similar growth – from $4.9 billion this year to $5.7 billion next year.

While SaaS may have the big numbers, it’s platform-as-a-service which is expected to grow more rapidly, at 26.6 percent, to hit $1.8 billion (up from $1.4 billion). Driving that growth is the need for remote workers to have access to high performing, content-rich and scalable infrastructure.

Infrastructure-as-a-service is forecast to jump from $1.1 billion to $1.3 billion.

But while the numbers might be big, they’re still only a small percentage of overall IT spend – for now at least – with cloud accounting for just 9.1 percent of the total global enterprise IT spend in 2020.

However, that’s a figure Gartner expects to grow considerably in the coming years with Gartner forecasting cloud to account for 14.2 percent of overall spend come 2024, with nearly 70 percent of organisations currently using cloud services expecting to up their cloud spend on the back of the Covid disruption.

That split is in keeping with the findings of the Nutanix Enterprise Cloud Index, conducted by Vanson Bourne. It found that hybrid cloud is regarded as the ‘ideal’ IT infrastructure model by 86 percent of respondents with the pandemic shifting IT’s focus toward remote worker support and enabling near-instant infrastructure deployments that reach geographically distributed workforces, spurring increased enterprise progress with cloud expansion.

“Continued investments in cloud infrastructure, along with security, will continue to be a priority in order to serve a larger remote workforce, as the at-work/at-home balance is unlikely to swing back to pre-Covid levels. In fact, improving IT infrastructure (50 percent) or work-from-home capabilities (47 percent) have become priorities for the next 12 to 18 months as a direct result of the pandemic,” Nutanix says.

Nearly half of the Nutanix respondents said their investments in hybrid cloud have increased as a direct result of the pandemic, including both public and private cloud.

Sid Nag, Gartner research vice president, says the pandemic validated cloud’s value proposition and forced organisations to focus quickly on three priorities: Preserving cash and optimising it costs, supporting and securing a remote workforce, and ensuring resiliency.

“The ability to use on-demand, scalable cloud models to achieve cost efficiency and business continuity is providing the impetus for organisations 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.”

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