‘Tech providers that still fail to adapt to Cloud will become obsolete’

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The shift to Cloud has only accelerated over the past two years due to the Covid-19 pandemic, as organisations responded to a new business and social dynamic.

However, according to Michael Warrilow, research vice-president 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”.

In 2022, more than $1.3 trillion in enterprise IT spending is at stake from the shift to Cloud, growing to almost $1.8 trillion in 2025, according to Gartner.

“Ongoing disruption to IT markets by Cloud will be amplified by the introduction of new technologies, including distributed cloud. Many will further blur the lines between traditional and cloud offerings,” said the report.

The ‘Cloud shift’ research includes only those enterprise IT categories that can transit to Cloud, within the application software, infrastructure software, business process services and system infrastructure markets.

By 2025, 51 per cent of IT spending in these four categories will have shifted from traditional solutions to the Public Cloud, compared to 41 per cent in 2022.

Almost two-thirds (65.9 per cent) of spending on application software will be directed towards Cloud technologies in 2025, up from 57.7 per cent in 2022.

In 2022, traditional offerings will constitute 58.7 per cent of the addressable revenue, but growth in traditional markets will be much lower than Cloud.

“Organisations are evaluating it because of its ability to meet location-specific requirements, such as data sovereignty, low-latency and network bandwidth,” the report added.

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