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The proportion of enterprise IT spending on public Cloud computing continues to increase.

Companies will be allocating even more of their IT budget on Cloud applications, according to industry analyst Gartner. According to their latest report, spending on public cloud services is going to grow 18.4% next year. This means a total of $304.9 billion, up from $257.5 billion in 2020

Analysts predict that the proportion of total enterprise IT spending that goes to cloud computing will grow rapidly. They forecast an increase from 9.1% in 2020 to 14.2% by 2024.

SaaS is largest source the growth

Software as a service (SaaS) remains the largest sector of the cloud computing market, according to Gartner. The amount enterprises spend on SaaS is going to grow to $117.7 billion in 2021, according to analysts. This represents a 16% year on year increase.

Platform as a service (PaaS), the segment that provides infrastructure for applications, will grow even faster. According to the Gartner analysts, the PaaS sector will jump 26.6% between 2020 and 2021.

The increased purchase of PaaS solutions is due to the need for remote workers to have access to high-performing, scalable infrastructure, according to Gartner. This means mostly relying on cloud-native applications.

The analysts also forecast an increase in Desktop as a service (DaaS). However, this growth will take place in the context of a lower base.

COVID-19 is driving increased Cloud consumption

“The pandemic validated cloud’s value proposition,” said Sid Nag, research vice president at Gartner. “The ability to use on-demand, scalable cloud models to achieve cost efficiency and business continuity is providing the impetus for organizations to rapidly accelerate their digital business transformation plans. The increased use of public cloud services has reinforced cloud adoption to be the ‘new normal,’ now more than ever.”

Gartner survey data indicates that almost 70% of organizations using cloud services today plan to increase their cloud spending in the wake of the disruption caused by COVID-19.

As enterprises increase investments in mobility, collaboration, and other remote working technologies and infrastructure, Gartner expects to see sustained growth in public cloud through 2024.

“As CIOs think more strategically about how to lay the foundations to support a return to growth, it is clear that the move to digital and associated services will play a big role for organizations in the future,” said Mr. Nag.

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