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April 14, 2014

Enterprise cloud spending ‘to rise 35% by 2017’

How many billions of dollars will companies spend on cloud in three years’ time?

By Joe Curtis

Enterprise spend on cloud is set to hit $235bn by 2017, research firm IHS has stated.

The sum represents a 35% rise from the $174bn projected to be spent this year on cloud architecture and services, said the IHS, and is triple the $78bn outlay in 2011, as companies seek to drive business innovation by using the cloud as a big data store.

Senior director for information technology at IHS, Jagdish Rebello, said: "Enterprises today are trying to create faster, more efficient IT environments to ensure more responsive, agile and successful businesses.

"In these cloud-based settings, enterprises also want to integrate the deep analytical power of big data, which will give them competitive advantages through insights about present and prospective customers."

Cisco last month announced plans to invest $1bn in creating the world’s largest network of clouds with partners as it looks to make money from the increasing budget spend on the technology among big businesses.

This year alone IHS estimates the amount of cash available to spend on cloud is set to rise 20% on last year’s $145bn.

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It contends that mobile phone operators will also move to the cloud as the handset market revenue is due to peak.

"Mobile operators are desperately searching for the next innovation," Rebello said. "Software and cloud services could be the next wave of differentiation that turns the downward mobile handset revenue curve back up."

However, businesses will also experience challenges when picking cloud providers including performance, differences in service and the evolution of multiple cloud eco-systems.

Enterprises’ efforts may lead to new cloud business models, believes IHS, as location becomes less of a concern with more data being stored in virtualised environments.

Its report comes after research and insight firm Kable’s own report last March that predicted a global 29% compound annual growth rate (CAGR) rise in cloud spend between 2013 and 2017.

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