Gartner: Technology service providers risk becoming 'obsolete' if they do not adapt to cloud shift
New research shows that that enterprise IT spending on public cloud computing will overtake spending on traditional IT in 2025
Gartner has warned that technology service providers that fail to keep pace with a shift to cloud risk becoming "obsolete", with new research showing that enterprise IT spending on public cloud computing will overtake spending on traditional IT in 2025.
Gartner's ‘cloud shift' research found that by 2025, 51 per cent of IT spending across enterprise IT categories that can transition to cloud within their software will have shifted from traditional solutions to the public cloud, compared to 41 per cent in 2022.
Almost two-thirds (65.9 per cent) of spending on application software will be directed toward cloud technologies in 2025, up from 57.7 per cent in 2022, it added.
"The shift to the cloud has only accelerated over the past two years due to COVID-19, as organisations responded to a new business and social dynamic," said Michael Warrilow, research vice president at Gartner.
"Technology and service providers that fail to adapt to the pace of cloud shift face increasing risk of becoming obsolete or, at best, being relegated to low-growth markets."
Gartner's research also found that, in 2022, traditional offerings will constitute 58.7 per cent of the addressable revenue but growth in traditional markets will be much lower than cloud.
More than $1.3 trillion in enterprise IT spending is at stake from the shift to cloud, growing to almost $1.8 trillion in 2025.
"Enterprise adoption of distributed cloud has the potential to further accelerate cloud shift because it brings public cloud services into domains that have primarily been non-cloud, expanding the addressable market," Gartner added.
"To capitalise on the shift to cloud, Gartner recommends technology and services providers target segments where the shift is occurring most aggressively, in addition to seeking new high-growth cloud opportunities."