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Spending on cloud infrastructure has overtaken the money spent on legacy IT for the first time in the UK and the trend is set to speed up over the next few years.
Research from the Cloud Industry Forum (CIF) has revealed the spending shift and indicated that more legacy systems are going to be decommissioned over the next three years, with money being spent in areas like AI, IoT and blockchain.
UK firms are now earmarking 19% of their budgets to cloud infrastructure and 18% going to on-premise, but that level will drop to 12% by 2022.
The research paper, Cloud - the next generation, showed there is a slight problem though around skills and CIF has urged the channel and vendor communities to do more to increase their expertise and levels of support.
CIF found that shortages were a key barrier to digital transformation, with 50% of UK organisations currently reporting a lack of skills and 50% currently lacking cloud project management skills.
“UK businesses clearly recognise the need for transformation and are gradually leaving legacy technologies behind in favour of next generation technologies as they pursue competitive advantage. Cloud is critical to this shift, thanks not only to the flexibility of the delivery model, but also the ease with which servers can be provisioned, which reduces financial and business risk. Furthermore, cloud’s ability to explore the value of vast unstructured data sets is next to none, which in turn is essential for IoT and AI," said Alex Hilton, CEO of CIF.
Hilton said that the research had discovered that 15% of customers did not know where to find a partner to help them get involved with AI, IoT and blockchain and the channel had to do more to reach out to that constituency.
“Many of the barriers or objections to the adoption of AI, IoT and blockchain mirror those that we’ve historically seen with cloud, and it’s likely that they will subside as these technologies continue to mature and more off-the-shelf solutions emerge. The vendor community and the channel have a big role to play here, refining their service and support capabilities, and helping end users comprehend the transformative potential of these next generation technologies,” said Hilton.
Skills is not just a channel issue and recent research from EDT showed that there is heavy demand for IT expertise in most disciplines, with software development skills at the top of the pile.
“We are already aware of the genuine difficulty tech companies have in attracting people with the right skills. Unless we can work with education to significantly expand the number of young people who see tech as their career future, then we will miss the opportunity to consolidate the UK’s position as a world leader in tech," said Julie Feest, CEO for EDT.