Gartner: Public cloud spending on the rise across the globe as hybrid working takes hold

The amount of money end-users across the globe spend on public cloud services is expected to continue to soar on a year-by-year basis, according to Gartner’s latest forecast data.

The IT analyst house predicts that spending on public cloud services will hit $494.7bn in 2022, which represents a 20.4% year-on-year (YoY) increase, when spending in this area hit $410.9bn during 2021.

Based on current spending trends, Gartner said the amount of money end-users invest in public cloud services is expected to hit close to $600bn during 2023.

Sid Nag, research vice-president at Gartner, said that as well as spending more money on public cloud services, CIOs and IT buyers are also becoming more savvy about how their IT budgets should be spent.

“Cloud is the powerhouse that drives today’s digital organisations,” said Nag. “CIOs are beyond the era of irrational exuberance of procuring cloud services and are being thoughtful in their choice of public cloud providers to drive specific, desired business and technology outcomes in their digital transformation journey.”

In terms of the types of cloud services end-users are purchasing, infrastructure as a service (IaaS) will experience the highest growth in end-user spending this year at 30.6%, with spending expected to hit $119bn.

The desktop-as-a-service (DaaS) segment will experience YoY spending growth in the region of 26.6%, while platform as a service (PaaS) will experience spending growth of 26.1%.

However, software as a service (SaaS) remains the largest segment of the overall public cloud market, with spending on course to hit $176.6bn in 2022.

These spending trends are being driven, in part, by enterprises looking to embrace hybrid working models, continued Gartner.

“The new reality of hybrid work is prompting organisations to move away from powering their workforce with traditional climate computing solutions, such as desktop and other physical in-office tools and towards DaaS, which is driving spending to reach $2.6bn in 2022,” said Gartner in a statement. “Demand for cloud-native capabilities by end-users accounts for PaaS growing to $109.6bn in spending.”

Part of the predicted growth in PaaS spend can be attributed to the fact these services tend to have a higher average selling price than other commodity cloud services, said Nag.

“Cloud-native capabilities such as containerisation, database platform as a service (dbPaaS) and artificial intelligence/machine learning contain richer features than commoditised compute such as IaaS or network as a service. As a result, they are generally more expensive, which is fuelling spending growth.”

Gartner also touched on the emergence of additional categories of public cloud technologies, which are creating new revenue streams for public cloud providers.

“Driven by maturation of core cloud services, the focus of differentiation is gradually shifting to capabilities that can disrupt digital businesses and operations in organisations directly,” said Nag. “Public cloud services have become so integral that providers are now forced to address social and political challenges, such as sustainability and data sovereignty.

“IT leaders who view the cloud as an enabler rather than an end state will be most successful in their digital transformational journeys. The organisations combining cloud with other adjacent, emerging technologies will fare even better.”