Gartner: Cloud Spending on Public Services is Growing Rapidly

Global spending on IT products and services will grow 3% in 2012 to 3.6 trillion dollars, according to figures presented by research firm Gartner. The forecast is higher than the 2.5% growth projected to Gartner released earlier this year.

Global spending on IT services will grow 2.3% to $864 billion in 2012, while hardware spending will be $420 billion this year, which implies an increase of 3.4%. The data is based on market analysis of more than 200 Gartner business and technology analysts researching on global IT spending of Global 500 companies.

“While the challenges facing global economic growth persist — the eurozone crisis, weaker U.S. recovery, a slowdown in China — the outlook has at least stabilized,” said Richard Gordon, research vice president at Gartner. “There has been little change in either business confidence or consumer sentiment in the past quarter, so the short-term outlook is for continued caution in IT spending.”

Gartner estimates that $1,686 billion will be spent on telecommunications services, which is 46.4% of total ICT spending in 2012. These expenses will be up 6% compared to $1663 billion spent in this category in 2011. Telecom services growth is expected to come from uptake of multiple connected devices such as gaming, media tablets and other consumer electronic devices in emerging market.

Cloud Services on Growth Path

One area that is growing rapidly is the spending on public cloud services. According to Gartner, spending on public cloud services will reach $109 billion this year, a figure in excess of $91 billion compared to last year. The enterprise public cloud services spending will reach $207 billion by 2016.

Currently the most popular type of cloud services is business process outsourcing, but as a growing familiarity with this model, organizations will move other resources of their data centers into the cloud. This growth will be provided with an increasing desire of organizations to use the services in the cloud, says Ed Anderson, research director at Gartner.

“Business process as a service (BPaaS) still accounts for the vast majority of cloud spending by enterprises, but other areas such as platform as a service (PaaS), software as a service (SaaS) and infrastructure as a service (IaaS) are growing faster,” Mr. Gordon said.

Outsourcing of business processes and functions, transfer of personnel management, accounting management, call centers, etc. to third-party service providers such as Deloitte, Accenture, ADP, and CSC, would be a major driving factor for major part of the cost of cloud services.

“Cloud computing is now at the point where technology has demonstrated its usefulness as an approach to the management of several IT resources,” Anderson said.

Increase in spending on SaaS offering is supported by the cloud of business applications such as Microsoft Office package, Google Apps and CRM-applications from

It is expected that the cost of the PaaS will be lower than in other segments, but more and more companies will offer these services to help organizations leverage cloud providers offer. The cost of PaaS in 2012 will amount to $1.2 billion against $0.9 billion a year ago, and in 2016 they will reach $27 billion.

The cloud adoption in digital media will reach its peak level by 2016. Another report of Gartner predicts that more than one third of all digital data will be stored in the cloud by 2016. Digital data is not along to go cloud. Cloud computing industry is expected to be worth $5.4 Billion in the health care market by 2017, according to MarketsandMarkets, a research firm.

Leave a Reply

Your email address will not be published. Required fields are marked *