Gartner predicts increase in cloud migration and negative impact of inflation

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Gartner predicts that inflation will negatively impact global spending on public cloud services, which is expected to rise by more than 20% to $591.8 billion in 2023, compared to $490 billion in 2022, growing at an 18.8% rate. However, as companies are under cost pressure, spending on public cloud could actually fall.

“Current inflationary pressures and macroeconomic conditions are having a push-and-pull effect on cloud spending,” said Sid Nag, vice president analyst at Gartner. “Cloud computing will continue to be a bastion of safety and innovation, supporting growth during uncertain times due to its agile, elastic and scalable nature.

“Yet, organizations can only spend what they have. Cloud spending could decrease if overall IT budgets shrink, given that cloud continues to be the largest chunk of IT spend and proportionate budget growth.”

Cloud business process services (BPaaS), cloud application infrastructure services (PaaS), cloud application services (SaaS), cloud management and security services, cloud system infrastructure services (IaaS), and desktop-as-a-service are part of Gartner’s current forecast for public cloud spending (DaaS).

The three most important categories are SaaS, IaaS and PasS. Gartner forecasts 23.2% growth for PaaS and 16.8% growth for SaaS in 2023, but also sees challenges from inflation and hiring.

Despite Nag’s warning, he believes the pace of cloud migration will continue, with demand for IaaS infrastructure-as-a-service (IaaS) capabilities expected to “naturally continue to grow,” as companies seek to modernize their IT estates, reduce risks, and optimize costs.

“Moving operations to the cloud also reduces capital expenditures by extending cash expenditure over a subscription term, [which is] a key benefit in an environment where cash maybe critical to maintain operations,” he added.

The sources for this piece include an article in ZDNet.

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