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Cloud spending to scrape $500 billion this year – Gartner

Growing enterprise demand for more complex cloud-native services carries a higher price tag

Global spending on public cloud services will come close to $500 billion this year, according to research firm Gartner.

Growing uptake of cloud-native infrastructure services is identified as one of the key drivers, but the trend towards hybrid work scenarios driven by the pandemic is also playing a part.

Gartner forecasts that the spend on public cloud services will grow by 20.4 percent this year to reach a total $494.7b, a rate of growth that the researchers believes will continue through 2023 to deliver a total of nearly $600b next year.

The figures come from Gartner's "Forecast: Public Cloud Services, Worldwide, 2020-2026, 1Q22 Update," which is only available to subscribers.

The highest growth in spending is expected to be due to demand for cloud-based infrastructure services, or IaaS, which Gartner expects will grow by just over 30 percent during 2022 to $119.7b. This is followed by desktop-as-a-service (DaaS), which Gartner attributes to the move towards hybrid work and organizations switching to this method of provisioning a client compute environment to their employees, which is set to grow by 26.6 percent.

According to Sid Nag, research vice president at Gartner, the increase in public cloud spending is in part due to the growing enterprise demand for more complex cloud-native services that carry a higher price tag.

"Cloud native capabilities such as containerization, database platform-as-a-service (dbPaaS) and artificial intelligence/machine learning contain richer features than commoditized compute such as IaaS or network-as-a-service," said Nag. "As a result, they are generally more expensive which is fueling spending growth."

But while infrastructure and DaaS are forecast to see the highest rate of growth, Gartner's predictions for the actual level of spending paint a different picture: the highest share of the overall spend is still expected to remain with cloud-hosted applications (SaaS), at $176.6b, with infrastructure services (IaaS) coming in a distant second.

The third highest spend during 2022 is expected to be on application infrastructure services, more commonly known as platform-as-a-service (PaaS) at $109.6b. Despite the rapid growth, overall spend on cloud desktops (DaaS) this year is only expected to reach $2.6b by Gartner, which is actually the lowest figure for the segments that it identifies.

Gartner said it expects to see "steady velocity" within the cloud-hosted application segment as organizations take multiple routes to market such as cloud marketplaces, and the firm also believes that growth will be driven by customers breaking up larger monolithic applications into a greater number of smaller component services for more efficient DevOps processes.

Meanwhile, Gartner points to new product categories that it says are opening up as technologies such as secure access service edge (SASE) start to disrupt adjacent markets, with the focus of differentiation shifting to capabilities that can disrupt digital businesses and operations in enterprises directly, according to Nag.

"IT leaders who view the cloud as an enabler rather than an end state will be most successful in their digital transformational journeys," he said, adding: "The organizations combining cloud with other adjacent, emerging technologies will fare even better." ®

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