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More than half of IT spending will shift to cloud by 2025

cloud digital transformation
(Image credit: Shutterstock / Ekaphone maneechot)

By 2025, enterprise IT spending on public cloud will overtake spending on traditional IT in all applicable categories.

This is according to a new report from analyst house Gartner, which says that 51 percent of IT spending in application software, infrastructure software, business process services, and system infrastructure markets will shift from traditional solutions to the public cloud within three years. Currently, the figure sits at approximately 40 percent. 

In the same timeframe, says Gartner, roughly two-thirds of spending on application software will be aimed at cloud technologies, up from 57 percent today.

“The shift to the cloud has only accelerated over the past two years due to Covid-19, as organizations responded to a new business and social dynamic,” said Michael Warrilow, Research VP at Gartner.

“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.”

This year, “traditional” offerings make up 58.7 percent of the addressable revenue, but with the growth of this market segment much lower than cloud, the latter will soon take the lead. 

In the coming year, more than $1.3 trillion in enterprise IT spending could make its way to cloud technologies, rising to $1.8 trillion in three years. New technologies, such as distributed cloud, will further blur the lines between traditional and cloud offerings, and will continue to disrupt the market, Gartner concludes.

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.