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Cloud spending topped data centers for the first time last year

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(Image credit: Shutterstock / Blackboard)

Businesses around the world spent more money on cloud infrastructure than they did on on-premise solutions for the first time last year, new figures have said.

A report from market researchers Synergy Research Group claims enterprise spending on cloud-based solutions grew by another third (35 percent) in 2020, compared to the year before, adding that total annual spending has now come close to the $130 billion mark.

At the same time, spending on on-prem solutions dropped by six percent, year-on-year, shrinking to less than $90 million.

Speaking to TechCrunch, chief analyst and research director at Synergy, John Dinsdale, said CIOs spend their money on servers, storage, security and software for the cloud, among other things:

“The software pieces included in this data is mainly server OS and virtualization software. Comparing SaaS with on-prem business apps software is a whole other story,” Dinsdale said.

Despite significant growth in spending, sceptics out there are still saying that the majority of workloads remains on-prem. For Dinsdale, it’s a tough question to answer because of the ease at which workloads move around in today’s hybrid world.

“I’ve seen plenty of comments about only a small percentage of workloads running on public clouds. That may or may not be true (and I tend more toward the latter), but the problem I have with this is that the concept of ‘workloads’ is such a fungible issue, especially when you try to quantify it,” he said.