Enterprise cloud spending seen soaring

Staff writer
08 Apr 2014

Cisco’s recent announcement that it will construct the world’s largest network of clouds will allow the company to cash in on the global trend of rising expenditures among enterprises for cloud architecture and services.

According to a new report from IHS Technology, Cisco’s move is especially timely.

Enterprises will spend more than $235 billion on cloud architecture and services by 2017—a 35% gain from the $174 billion projected to be spent this year, and triple the $78 billion expended in 2011.

This year alone, cloud spending is pegged to rise 20% from $145 billion last year, as shown in the attached figure, the report said.

Jagdish Rebello, senior director for information technology at HIS, said “Enterprises today are trying to create faster, more efficient I.T. 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,” the analyst added.

Enterprises are simultaneously augmenting their on-site services and capabilities with the cloud and gradually transferring those functions to online competencies.

For businesses, the tasks at present center on developing initially limited sets of new apps and services that will live only in the cloud. Once they learn to create uniquely cloud-based services, apps and content, it’s likely that the new offerings will not only multiply but will also skyrocket in terms of customer acceptance, Rebello added.

To be sure, enterprises will have company in their move to the cloud. Mobile network operators seeking growth will head there, too, because global mobile handset market revenue will soon peak, prompting mobile carriers to seek other money-making sources.

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