10 Reasons Why Enterprise Cloud Computing Is Ready to Boom

The cloud is primed for a “boom” period, according to IDC. Here’s a look at why enterprises will pick up the pace of their move to a cloud platform over the next few years.

Cloud services will be in high demand by 2019, IDC found in its study of CIOs’ IT spending plans. The company found that by 2019, a combined $141.2 billion will be spent on public cloud services, at a compound annual growth rate of 19.4 percent. Out of that, $91.6 billion will be spent on software as a service (SaaS), followed by $27.8 billion for infrastructure as a service (IaaS). Platform as a service (PaaS) will nab $21.9 billion in total spending.

For companies hoping to nab some of that revenue, doing business in the U.S. might be a good idea. IDC found that nearly 60 percent of all cloud revenue in 2019 will be generated in the U.S., followed by 22 percent in Western Europe. Interestingly, Canada and Japan, two advanced economies, will represent just a fraction of total public cloud spending by 2019.

As noted, the cloud might be preparing for an explosion in revenue growth, but we are way past the pilot project stage. Already, 80 percent of businesses have either deployed or are “fully embracing” the cloud. Another 12.5 percent of businesses are at least evaluating a move to the cloud.

Despite all of the interest in the cloud, there are still some holdouts. In fact, IDC found in its evaluation of more than 11,000 businesses that 8 percent “have no interest in, or plans for, cloud computing at this time.” However, that figure is down substantially from the 21 percent of companies who said in 2014 that they had no interest in the cloud.

Today, about half of a company’s IT budget is dedicated to traditional, in-house deployment of technology. However, within the next two years, that figure will drop to 40.7 percent of a total IT budget. Meanwhile, in two years public cloud spending will increase to 13.6 percent of a total IT budget, compared with 10.5 percent now, and dedicated hosted public cloud will rise significantly from 6.1 percent of spending to 9.6 percent.

IDC took a deeper dive into cloud budgets and how their distributions will change in the coming year. The company found that there will be 11 percent growth in a dedication of resources from private, customer-side cloud to provider-side cloud. In addition, a whopping 44 percent of the budget will migrate from offline solutions to cloud-based delivery solutions within the next few years.

The IT side is slowly but surely migrating to the business side, IDC found. The company’s research shows that 61 percent of business funds are currently dedicated to technology projects, including 21 percent that are joint IT and business projects. The business side, in other words, is taking a stronger role than ever in determining how the IT budget is spent.

Chief information officers might soon find themselves in different positions. In fact, 57.4 percent of the more than 200 CIOs surveyed said that within three years, they will transition to chief innovation officers who focus on IT projects that drive revenue growth. About a third of CIOs say their positions will transition to the role of a “business service broker” who focuses on expanding service capabilities.

IDC discovered that public cloud spending will grow at six times the rate of in-house IT spending in the coming years. In addition, the overall cloud market’s revenue will reach $500 billion by 2020.

IDC evaluated cloud customers’ “maturity,” or their self-described knowledge of and ability to adapt to the cloud. The research firm found that more than 9 percent of respondents said they have an “optimized” understanding of the cloud and how to leverage it, compared with 23.3 percent who are at the lowest level of maturity. The greatest number of respondents said they are “managed” customers, meaning they have extensive cloud knowledge but still need some help getting to where they want to be.