Cloud Fueling Next Rise in IT Spending, Innovation

In just a few short years, cloud has gone from an IT buzzword filled with promises of mega savings and simplified systems maintenance and control to the catalyst that will fuel IT spending through 2017.

The cloud, according to recent research, has successfully moved from nascent concept to a full-on force that touches nearly all aspects of both business and consumer experiences. It’s behind your mobile apps and your email and your company’s disaster recovery plans.

In fact, by 2017, IDC expects public IT cloud services to drive 17 percent of IT product spending and nearly half of all growth across five technology categories–applications, system infrastructure software, platform as a service (PaaS), servers and basic storage.

Software as a service (SaaS) is projected to remain the largest public IT cloud services category throughout the forecast, capturing 59.7 percent of revenues in 2017, according to an article on MidsizeInsider.com.

The fastest growing categories will be PaaS and Infrastructure as a service (IaaS), with CAGRs of 29.7 percent and 27.2 percent, according to the study, titled the “Worldwide and Regional Public IT Cloud Services 2013-2017 Forecast.”

The United States will remain the largest public IT cloud services market, although its share will decline from 56.9 percent in 2013 to 43.9 percent in 2017 while Western Europe, Latin America and Asia/Pacific will each gain share throughout the forecast. Cloud spending in emerging markets is expected to experience a CAGR of 37.3 percent for the 2013-2017 period, a rate almost twice that of developed markets, the report projected.

The annual survey on worldwide IT spending also pointed out that companies will slowly stop investing in legacy applications, including desktops and servers, and will push their resources toward the cloud, software-as-a-service (SaaS) solutions, big data and mobile apps instead. Additionally, impressive spending is predicted for the tablet market. Forrester predicts a 36-percent surge in tablet spending for a turnover of $21 billion this year, with Apple, Samsung and Microsoft leading the way.

IDC Senior Vice President and Senior Analyst Frank Gens said cloud computing is now entering “Chapter Two.” In this phase, the scale of cloud adoption will be larger and will be more user- and solution-driven. Gens says the cloud and other technologies, such as mobile, social and big data, will become more interdependent as well.

“The first wave of cloud services adoption was focused on improving the efficiency of the IT department. Over the next several years, the primary driver for cloud adoption will shift from economics to innovation as leading-edge companies invest in cloud services as the foundation for new competitive offerings. The emergence of cloud as the core for new ‘business-as-a-service’ offerings will accelerate cloud adoption and dramatically raise the cloud model’s strategic value beyond CIOs to CXOs of all types,” he said.

Patrick Burke is a writer and editor based in the greater New York area and occasionally blogs for Rackspace Hosting