Skip to main content

Cloud spending topped data centers for the first time last year

cloud
(Image credit: Shutterstock / Blackboard)

Businesses around the world spent more money on cloud infrastructure (opens in new tab) 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 (opens in new tab), 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 (opens in new tab). 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.

Sead Fadilpašić is a freelance tech writer and journalist with more than 17 years experience writing technology-focussed news, blogs, whitepapers, reviews, and ebooks. And his work has featured in online media outlets from all over the world, including Al Jazeera Balkans (where he was a Multimedia Journalist), Crypto News, TechRadar Pro, and IT Pro Portal, where he has written news and features for over five years. Sead's experience also includes writing for inbound marketing, where he creates technology-based content for clients from London to Singapore. Sead is a HubSpot-certified content creator.