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Gartner offers insights into how cloud is disrupting traditional IT spending habits

Market watcher shines a light on how the adoption of off-premise technologies is shaking up enterprise IT spending trends

Gartner predicts that more than $1tn in IT spending will be directly or indirectly targeted away from traditional IT delivery models and to the cloud between now and the year 2020.

The market watcher coined the phrase “cloud shift” to describe this ongoing change in IT buying behaviour, with the rate of change determined by comparing the amount of money spent on cloud services with investments in on-premise technologies that fulfil the same role.

For example, Gartner predicts that $22bn of IT spending that was traditionally invested in on-premise hardware will be swallowed up by the infrastructure-as-a-service (IaaS) segment this year.

Meanwhile, the money that enterprises previously set aside to buy on-premise business applications will be used to purchase software-as-a-service (SaaS) applications instead, representing a cloud shift of $36bn.

Overall, the analyst house predicts the aggregate amount redirected to the cloud this year will hit $111bn, rising to $216bn in 2020.

Ed Anderson, research vice-president at Gartner, said the change in IT buying behaviour indicates that companies are coming to realise the important role cloud has to play in their digital transformations.

“Cloud-first strategies are the foundation for staying relevant in a fast-paced world,” said Anderson.

“The market for cloud services has grown to such an extent that it is now a notable percentage of total IT spending, helping to create a new generation of start-ups and ‘born in the cloud’ providers.”

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But these figures only take into account instances of “direct cloud shift”. Gartner claims the move to adopt off-premise technologies will affect investment trends in other areas too, creating “indirect cloud shift”.

Combining the two should ensure that cloud shift collectively results in $1tn being redirected from traditional IT spend by 2020.

“Cloud shift is not just about cloud,” said Anderson. “As organisations pursue a new IT architecture and operating philosophy, they become prepared for new opportunities in digital business, including next-generation IT solutions, such as the internet of things.

“Furthermore, organisations embracing dynamic, cloud-based operating models position themselves better for cost optimisation and increased competitiveness.”

Read more on Infrastructure-as-a-Service (IaaS)