Global end-user spending on public cloud services is forecast to grow 20.7% to total $591.8 billion (£513.3bn) in 2023.

This is an increase from $490.3bn (£425.3bn) in 2022, according to the latest forecast from Gartner. This is higher than the 18.8% growth forecast for 2022.

Sid Nag, Vice President Analyst at Gartner commented: “Current inflationary pressures and macroeconomic conditions are having a push and pull effect on cloud spending.

“Cloud computing will continue to be a bastion of safety and innovation, supporting growth during uncertain times due to its agile, elastic, and scalable nature.

“Yet, organisations can only spend what they have. Cloud spending could decrease if overall IT budgets shrink, given that cloud continues to be the largest chunk of IT spend and proportionate budget growth.”

Infrastructure-as-a-service (IaaS) is forecast to experience the highest end-user spending growth in 2023 at 29.8%, data suggested. All segments are expected see growth in 2023.

“Cloud migration is not stopping,” Nag continued. “IaaS will naturally continue to grow as businesses accelerate IT modernization initiatives to minimize risk and optimize costs.

“Moving operations to the cloud also reduces capital expenditures by extending cash outlays over a subscription term, a key benefit in an environment where cash may be critical to maintain operations.”

Gartner expects that PaaS and software-as-a-service (SaaS) will see the most significant impacts from inflation due to staffing challenges and the focus on margin protection.

However, data also indicated that both segments will still see continued growth, with Gartner forecasting 23.2% growth for PaaS and 16.8% for SaaS in 2023.

Recommended

• The art of leadership during uncertain times
• CodeClan’s incoming CEO announces plans to scale
• Scots rocket firm Orbex gains Sutherland Spaceport contract

“Higher-wage and more skilled staff are required to develop modern SaaS applications, so organizations will be challenged as hiring is reduced to control costs,” said Nag. “But since PaaS can facilitate more efficient and automated code generation for SaaS applications, the rate of PaaS consumption will consequently increase.”

He added: “Despite growth, profitability and competition pressures, cloud spending will continue through perpetual cloud usage.

“Once applications and workloads move to the cloud they generally stay there, and subscription models ensure that spending will continue through the term of the contract and most likely well beyond. For these vendors, cloud spending is an annuity – the gift that keeps on giving.”

Previous Gartner research projected that global IT spending across the board was to hit $4.5 trillion over this year, an increase of 5.5% from 2021.

Enterprise software was expected to have the highest growth in 2022 at 11.5%, driven by infrastructure software spending continuing to outpace application software spending.

DIGIT Expo 2022 | Join the Conversation

DIGIT Expo is Scotland’s largest gathering of senior technology personnel and an unmissable opportunity for knowledge exchange, networking and business opportunity.

The conference will feature an array of tech leaders, innovators and world-class speakers exploring key themes such as AI, DevOps, cyber security, digital leadership, cloud computing, Web3 and data innovation.

Find out more at: www.digit-expo.com