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Proof if it were needed that the cloud has gone from being a nice-to-have to a business essential: 34 per cent of firms’ IT budgets will be spent on external cloud and hosting services this year - up from 28 per cent in 2017.
That’s the news from 451 Research, who polled more than 500 senior IT professionals for its Voice of the Enterprise report. It demonstrates just how much companies are shifting to external services for their IT, rather than using in-house teams.
The research also shows that while hosting and cloud providers are usually known as providers of infrastructure services, in fact, just 31 per cent of companies’ enterprise IT spending goes there. Almost 70 per cent of budgets for hosting and cloud are spent on other services:
42% on application services
14% on managed services
9% on security services
5% on professional cloud services
The firm said its findings indicated organisations’ “growing reliance” on external IT providers for their infrastructure, application, management and security services needs.
Firms’ use of external cloud services has been growing for some time. Separate research from ISG shows that cloud services now represent a third of the whole IT outsourcing market - almost double its share in 2014.
The 451 research also shows that firms using hosting and cloud services get them from a pretty broad range of suppliers: public cloud infrastructure providers, used by 69 per cent of respondents, are the most common, followed by managed hosting providers, used by 26 per cent of enterprises.
“The market for managed infrastructure and application services is a longer tail market, with greater opportunities for providers who emphasize expertise in operating, optimising and securing the infrastructure and application products they deliver,” said Liam Eagle, 451’s research manager and the lead author of the study.
“This includes opportunities to deliver services based on reselling infrastructure and application services from the largest IaaS and SaaS vendors.”
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