Gartner Predicts $111B In IT Spend Will Shift To Cloud This Year Growing To $216B By 2020

Author

Louis Columbus

August 1, 2016
  • More than $1 trillion in IT spending will be directly or indirectly affected by the shift to the cloud during the next five years.
  • Business Process Outsourcing spending will shift at a 43% rate to the cloud by 2020.
  • Application software spending will shift at a 37% rate to the cloud by 2020.

Supporting new business models, revamping business processes to be customer focused, and staying in step with how customers are changing where and how they buy is driving a shift in IT spending towards the cloud.

Key takeaways:

  • $42B in Business Process Outsourcing IT spend, or 35% of the total market, is forecast to shift to the cloud this year. 25% of the application software spending is predicted to shift to the cloud this year, or $36B. The following graphic compares total market sizes and the shift to cloud spending this year.


cloud shift by segment 2016

  • The greatest shifts in IT spending to the cloud include Business Process Outsourcing (BPaaS) and application software. Nearly half (43%) of all IT spending on Business Process Outsourcing (BPaaS) will be cloud-based by 2020. 37% of application software spending will shift to the cloud, and 10% of application infrastructure software. The following graphic compares IT spending cloud shift rates through 2020.


shift percent

  • Gartner’s enterprise clients are expanding their IT spending beyond enterprise software to IT Services and Business Process Outsourcing (BPaaS). For many enterprises, cloud-based applications are the new normal. SaaS-based applications are now pervasive throughout many companies globally, especially those with complex supply chains, distribution channels, and customer relationships. Enterprises are shifting their focus in the next five years to IT Services and BPaaS to replace processes that no longer add value to business models and get in the way of responding to customers.


shift to cloud

Source:  Gartner Says by 2020 “Cloud Shift” Will Affect More Than $1 Trillion in IT Spending

This article was written by Louis Columbus from Forbes and was legally licensed through the NewsCred publisher network.

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