A new report by Gartner forecasts IT spending will reach $3.8 trillion in 2015, increasing 2.4 percent from the previous year. And, according to IDG, a strong share of IT budgets are allocated to cloud with IT decision makers increasing their cloud spend in the IT budget by 42 percent in the next year. A few key factors heavily influencing the sea change in IT spending also offer a glimpse into the future of cloud spending:
IT Now Brokers Technology Services Via the Cloud
Now, more than ever before, IT is partnering with business units to understand enterprise needs and help drive strategy. Then, IT acts as a service broker—identifying and directing IT budget resources (internal and from vendors) to address specific workload demands and business imperatives. As enterprises put IT in this position to drive growth, they create a shared focus on improving service and generating new revenue streams. Case in point, more than 80 percent of cloud spend is now managed by enterprise IT departments, according to Verizon's State of the Market: Enterprise Cloud 2014 report. Over half of that is managed by the CIO.
Increasing Importance of Risk Management and Governance
Security is important, but from a cloud perspective enterprises are focused on risk management and compliance. Not all enterprise data and applications will be put in the cloud. Some will always need to reside in the company’s data center. If business units and IT are working together as mentioned above they will be able to create and risk and compliance profile for each workload and design IT systems that support requirements. This will guide security and access protocols, as well as reporting and help address security compliance requirements.
The Goal is Business Transformation
Cloud is the tool. Business transformation is the goal. Innovative solutions are driving business transformation. This enables IT budget leaders to work with business units and focus spending on facilitating product development that anticipates and exceeds customer demands. In fact, Verizon’s Cloud report states that 71 percent of enterprises expect to be using cloud for external-facing production applications by 2017.
Rise of IT Services
Delivery of services has evolved to accommodate expanding corporate priorities, which include greater transparency, support tiers and various levels of professional services. Enterprises require heightened performance, flexibility and agility from cloud providers to tackle complex initiatives, such as big data analytics. In fact, 72 percent of enterprises expect to put more than half their workloads in the cloud, including SaaS, by 2017 (451 Research, 2014).
While the notion of growth fueled by business strategy, security, solutions and service is nothing new for enterprise leaders, cloud is in a unique position to positively impact each of these areas. In turn, this is emboldening enterprise IT and empowering lines of business. For these reasons, cloud will continue to be an IT budget priority in 2015 and well into the future.
