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August 8, 2017updated 09 Aug 2017 4:08pm

Cloud isn’t killing software – IT departments want both

Far from wiping out traditional software budget allocation, businesses are looking to have their cake and eat it too.

By James Nunns

Investment in cloud technologies over the next two years is expected to continue at a heady pace, with hybrid cloud becoming a greater priority.

While around 70% of organisations already invest in Infrastructure-as-a-Service, and Software-as-a-Service, only around 62% are currently investing in hybrid. That’s seemingly going to change over the next two years with 66% of organisations prioritising it for investment.

IaaS and SaaS remain the dominant forms of cloud consumption, with private cloud in use by around 68% of organisations, and considered by 65.5% as being an area of future investment, it is hybrid which is attracting more interest, other than IaaS.

That’s according to research by GlobalData, which asked 3,242 about which cloud computing solutions they currently have or use, and which they were prioritising for investment in the next two years.

Read more: IBM on winning the beauty contest of Cloud 3.0

UK organisations (150) were asked how their cloud computing budget was allocated across IaaS, SaaS, and PaaS, with respondents showing a fairly even split across the different categories, although SaaS comes out just on top.

SaaS budget allocation sat at 36.9%, with PaaS at 29.2%, and IaaS 33.9% for last year.

This year and there’s a slight shift in how budgets will be allocated, with SaaS allocation dropping to 34.4%, PaaS rising to 31.1%, and IaaS growing slightly to 34.4%.

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The UK appears to be on a similar track to that of the United States, where SaaS last year accounted for 35.3% of budget allocation, PaaS budget allocation was slightly ahead of the UK last year with 32.1%, and IaaS was at 32.6%.


IaaS budget allocation for the United States is expected to jump to 34.3% this year, with PaaS growing very slowly at 32.6%, and SaaS dropping to 33.2%.

SaaS now makes up 20.8% of the allocation of enterprise software budgets, only slightly behind software licenses.

Far from killing off software, it would appear that there’s still a healthy appetite for various forms of enterprise software.

Read more: Is AWS, Salesforce & Microsoft cloud dominance good or bad?

According to GlobalData, around 20% of the enterprise software budget was spent on enterprise applications, a figure that’s expected to grow to 21.2% this year. Similar figures can be seen across IT management software (18.7% -18.9%), information management (18.3% – 18.6%), security (18% – 18.6%), whilst software infrastructure is expected to see a decline in budget allocation this year, falling from 17.6% last year to 16.7% this year.

Far from signalling the demise of traditional software, cloud is seemingly being used to augment existing software offerings rather than for replacing an organisations entire software stack.

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