The IT industry's dissatisfaction toward localized data storage dominated the latter part of this decade. It’s a traditional type of infrastructure that doesn’t have the direct benefits of the internet. The “cloud”—a blanket term referring to computing that runs on the internet—provides a modern solution for businesses around the globe.
Cloud Solution Spending Trends
Year after year, organizations spend a sizeable amount of IT/Tech budget dollars to implement and improve their cloud-based solutions. The cloud industry is now so large that by 2018 the global market for cloud equipment is expected to surpass 79.1 billion. Gartner claims the industry is expected to affect more than $1 trillion in IT spending by 2020.
The reasons are varied: environmental caution, cost-effective storage volume, and the outsourcing of infrastructure maintenance. This is due to the rising cost of IT infrastructure and the vast number of new cloud companies increasing competition within the marketplace. No matter the cause, the forecast is looking bright for tech companies who sell cloud-based services and security.
So how do the numbers stack up? Is IT still forging ahead with the cloud’s promise to alleviate storage woes?
The short answer? Absolutely. RainKing Solutions ran analytics on the cloud landscape, and the graphs below tell that story:
As you can see, cloud storage and cloud management are far and away the highest IT spends across the industry. Even across revenue bands, cloud services tower above the rest. Interestingly, the smaller and the more massive conglomerates have the highest spend rates. Cloud services in general are easy to use, making it attractive for start-up and scale-up companies, as well as larger companies that can experiment with storage solutions without the worry of financial risk.
Why Cloud Services are Doing Well
Is there an explanation as to why cloud services are doing so well? Yes. Cloud services are shaking up the marketplace due to mobility. Mobile applications increased by 58% last year, according to TechCrunch, amounting to $35 billion in spending.
Mobile applications spending is consistently one of the highest spending areas in IT. This is because mobility and cloud services go hand-in-hand; cloud computing provides an elasticity where external devices can, in theory, provide better user experiences on both desktop and mobile environments.
Are there risks?
Implementing the cloud within an organization seems like a no-brainer these days. However, one caveat to this enormous spending focus is the looming threat of security breaches. As the world of technology grows and evolves, so too does the sophistication and skill of internet hackers. Companies across many different industries store more and more sensitive data in the cloud: medical records, credit card information, social security numbers, W-2’s, and more—a virtual goldmine for hackers to sell on the black market. This year, by the middle of July, the Identity Theft Resource Center already reported 522 security breaches according to CRN.com. Some of 2016’s largest breaches include everyday household names like: ADP, LinkedIn, Verizon, and Yahoo.
However, benefits of the cloud obviously outweigh any reservations companies may have as they continue to convert to the internet-based solution among growing reports of security breaches, ransomware attacks, and more. In 2016, RainKing found that cloud-based security solutions spending fluctuated anywhere from 25% all the way up to more than 50% of a company’s quarterly IT budget. Cloud security spending is expected to grow through Q4 and ultimately become the highest IT security spend in 2017—good news for companies offering cloud-based security solutions and services.
Despite the regular internet attacks, it looks like we’re in for a cloudy future. Check back with us next quarter as we monitor IT/Tech’s biggest investments including the cloud and security solutions.
Trends analyzed by Jake Forman and Dorie Phillips, content written by the Analytics Team