Public cloud spending to hit $591.8bn by 2023

New research from Gartner has found that global end-user spending on public cloud services is set to reach $591.8 billion by 2023, up from $490.3 billion this year and beyond the year’s 18.8 per cent growth forecast.

The highest end-user spending is forecast to be seen in Infrastructure as a Service (IaaS), which is set to grow 29.8 per cent next year, with continued growth also expected for cloud application infrastructure services (PaaS – expected to grow 23.2 per cent) and Software as a Service (SaaS - set to grow 16.8 per cent).

However, Gartner added that PaaS and SaaS are expected to see the most significant negative effects of rising inflation. Gartner Vice President Sid Nag said: “Current inflationary pressures and macroeconomic conditions are having a push and pull effect on cloud spending.”

“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.”

Nag continued that firms will only be able to spend money within their IT budgets and that spending could decrease if they are reduced. He added that, with cost-effective cloud services making up the bulk of IT spending, spending is likely to fall.

He commented: “Cloud migration is not stopping. IaaS will naturally continue to grow as businesses accelerate IT modernisation initiatives to minimise risk and optimise costs. Moving operations to the cloud also reduces capital expenditures by extending cash outlays over a subscription term, a key benefit in an environment where cash may be critical to maintain operations.”

Nag says that organisations may find developing SaaS applications challenging if hiring is limited in order to cut costs, with skilled, higher-waged staff needed to implement such applications. However, he feels that the rate of PaaS consumption will continue to increase, due to the efficiencies it can deliver for SaaS applications.

He concluded: “Once applications and workloads move to the cloud they generally stay there, and subscription models ensure that spending will continue through the term of the contract and most likely well beyond. For these vendors, cloud spending is an annuity – the gift that keeps on giving.”