Cloud spend to jump to 34 per cent next year

This year, just above a quarter (28 per cent) of an average organisation’s IT budget went on hosting and cloud services.

Businesses are increasingly relying on external sources for their IT infrastructure, applications, management and security services, according to a new report by 451 Research. The Voice of the Enterprise: Hosting and Cloud Managed Services study says this year, just above a quarter (28 per cent) of an average organisation’s IT budget went on hosting and cloud services. Next year, it is going up to more than a third (34 per cent).  

What’s interesting is that even though cloud providers like to see themselves as infrastructure providers, infrastructure is rarely in the focus of their clients. Less than a third (31 per cent) goes towards infrastructure services. The majority (70 per cent) goes on application services (42 per cent), managed services (14 per cent), and security services (nine per cent). Another five per cent goes on professional services for cloud enablement.  

A large portion of hosting and cloud services spending goes on unmanaged and self-managed infrastructure and app services. Almost half (44 per cent) of infrastructure services spend goes on bundled products that come with managed or security services. “The markets for unmanaged IaaS and SaaS are dominated by large, hyper-scale vendors. However, this spending trend indicates there is an appetite for the type of bundled services a broader market of managed service providers are well positioned to deliver. 

A strong opportunity exists for service providers offering a diversified set of hosting and cloud services that includes infrastructure and application hosting, as well as managed services and security services delivered around them,” says Liam Eagle, Research Manager at 451 Research and lead author of study. 

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