Cloud Services Spending Beats Data Center Spending

Brian Eugen
By Brian Eugen 4 Min Read
4 Min Read

The expenditure made by companies on data center hardware and software is now less than that spent on cloud services. This phenomenon, which took a decade to occur, saw companies spend $130 billion worldwide on cloud infrastructure in 2020, compared to only $90 billion on data center products – as found by the Synergy Research Group.

The researchers stated that although some companies are maintaining hardware, it is being placed into colocation facilities or being consolidated into a smaller number of sizable data centers. Chief Analyst, John Dinsdale, reported that “cloud is growing like gangbusters, while enterprise investments in their own data center infrastructure are being heavily constrained.” What are companies spending their cloud budgets on, and what is driving the growth of this technology?

Adapting To The Times

As stated here by cloud services specialists, the global cloud computing market is expected to continue its impressive growth rate. In fact, a Research and Markets study indicates that it is expected to grow from $371.4 billion in 2020 to $832.1 billion by 2025. This can be attributed to many factors – including the boom in digitization, ‘forced’, as it were, by the global health crisis that commenced in 2020. The researchers state, “The sudden shutdowns of offices, schools, and enterprises have increased the demand for cloud solutions and services.” Just a few industries that have seen a big demand for cloud services include IT, media and entertainment, and banking, financial services and insurance.

Cloud Services In Demand

The Synergy Research Group reports that some of the most in-demand services are those for virtualized IT software via IaaS, Paas, and most dramatically, SaaS. Businesses can choose to either contract a service from one provider or mix and match chosen services from different providers. Larger companies contracting a wide range of services sometimes need cloud management software, but the pros outweighs the cons. Businesses are now able to access and analyze data for work in intelligence and analytics easily and quickly.

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They are also able to simplify monitoring via cloud orchestration and to process log files via cloud logging. The overall picture is one in which businesses can obtain deeper insights from big data while also ensuring their data is well maintained. Cloud services have the additional advantage of affordability, since companies only pay for the services they use. Moreover, the range of services they contract can be expanded as their needs grow and change.

Spending on cloud services has officially dwarfed that of data center spending. Recent world events and the boom in remote work has led companies from a wide range of sectors to require scalable cloud services that can be purchased from different providers. Today, businesses are relying on cloud tech for analytics, as well as to maintain and patch issues as they arise. Cloud services are the ideal solution for businesses wishing to pay only for what they use and to purchase additional services as required.

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Brian Eugen is a tech-savvy wordsmith with a knack for captivating readers through his expertly crafted tech blog articles. His passion lies in dissecting the intricacies of technology, particularly in the realms of Android, Windows, internet, social media, gadgets, and reviews. With a deep understanding of the latest trends and a talent for simplifying complex concepts, His articles offer readers valuable insights and up-to-date information. His expertise in writing and genuine love for all things tech make him a trusted source in the digital landscape.
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