Gartner: Cloud Shift to Account for $1 Trillion in Spending by 2020

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Surprising no one, Gartner said this week that cloud computing will be one of the “most disruptive forces of IT spending since the early days of the digital age.”

Just how disruptive? The research firm predicts that more than $1 trillion in spending will be directly or indirectly impacted by the shift to cloud over the next five years.

Gartner said it compares IT spending on cloud services with traditional cloud services in the same market categories to come up with cloud shift rates. Other research has noted the decline in spending on non-cloud environments; IDC said that cloud will account for almost half of all IT infrastructure spending by 2020.

See also: Cloud Providers Will Spend $23B on Data Center Hardware This Year

"Cloud-first strategies are the foundation for staying relevant in a fast-paced world," Ed Anderson, research vice president at Gartner said in a statement "The market for cloud services has grown to such an extent that it is now a notable percentage of total IT spending, helping to create a new generation of start-ups and ‘born in the cloud’ providers."

In 2016, the aggregate amount of cloud shift will reach $111 billion, ballooning to $216 billion in 2020.

"Cloud shift is not just about cloud. As organizations pursue a new IT architecture and operating philosophy, they become prepared for new opportunities in digital business, including next-generation IT solutions such as the Internet of Things," Anderson said. "Furthermore, organizations embracing dynamic, cloud-based operating models position themselves better for cost optimization and increased competitiveness."

Despite the increase in cloud spending, spending on hardware will continue to exist for some time, particularly when you look at the kind of infrastructure that will be required to support these clouds. To that end, Microsoft CEO Satya Nadella said this week that it will meet demand for Azure with more international data center locations.

Indeed, changes in IT spending are not happening overnight; according to a recent survey by IDC, on-premise IT infrastructure will still account for more than 60 percent of all end-user hardware spending this year.

This first ran at http://talkincloud.com/cloud-computing-research/gartner-cloud-shift-account-1-trillion-spending-2020