Global cloud spending to hit $495bn in 2022, Gartner says

Global spending on public cloud services is expected to jump 20.4 per cent annually to $495 billion this year, as businesses expedite the pace of their digital transformation in the post-Covid era, US researcher Gartner has said.

Total spending is nearly $84bn more than the amount spent in 2020 and is expected to surge nearly 21.3 per cent yearly to almost $600bn next year.

“Cloud is the powerhouse that drives today’s digital organisations,” said Sid Nag, research vice president at Gartner.

“CIOs [chief information officers] are beyond the era of irrational exuberance of procuring cloud services and are being thoughtful in their choice of public cloud providers to drive specific, desired business and technology outcomes in their digital transformation journey.”

For businesses, moving to a cloud system hosted by a specialised company — such as Oracle, Amazon Web Services or SAP — is more economical than creating their own infrastructure of servers, hardware and security networks, industry experts said. It also brings down the overall cost of ownership.

In overall cloud spending, infrastructure-as-a-service software is forecast to experience the highest end-user spending growth this year at 30.6 per cent. It will be followed by desktop-as-a-service at 26.6 per cent and platform-as-a-service at 26.1 per cent, Gartner predicted.

In cloud industry, businesses pay only for those selective services or resources that they use over a period of time.

The new reality of hybrid work is prompting organisations to “move away from powering their workforce with traditional client computing solutions, such as desktops and other physical in-office tools” and opt for the latest cloud solutions, the Connecticut-based market researcher said.

In the Middle East and North Africa, end-user spending on public cloud is forecast to reach $5.8bn this year, growing 18.8 per cent year-on-year.

Several global players are establishing data centres in the region as the cloud market picks up.

In 2020, IBM unveiled two data centres in the UAE, making its first foray into the Middle East and Africa cloud storage market. In 2019, Amazon Web Services opened three data centres in Bahrain.

Germany's SAP has centres in Dubai, Riyadh and Dammam, which house servers for local cloud computing clients.

Alibaba Cloud — a comparatively smaller player and the cloud computing arm of the Chinese e-commerce company — opened its first regional data centre in Dubai in 2016.

“Public cloud services have become so integral that providers are now forced to address social and political challenges, such as sustainability and data sovereignty,” Mr Nag said.

“IT leaders who view the cloud as an enabler rather than an end state will be most successful in their digital transformational journeys … the organisations combining cloud with other emerging technologies will fare even better,” he added.