Is Digital Demand Setting Course for the Next Stage of Cloud Computing?

Did you know that even though cloud computing has been pervasive for the best part of almost two decades now, investment in its infrastructure by big companies still remains sluggish, as several industries cling on to old technologies? But that’s expected to change soon!
digital demand sets cloud computing

According to industrial data, in markets such as the UK, North America and Germany, where cloud use among large companies is set to enter a new stage, old technologies will soon be replaced. Cloud computing is widely seen as an essential tool for companies that are looking to become more agile and hoping to embrace artificial intelligence and data mining. This has led to an additional requirement for computing power, for which many companies have turned to cloud providers such as Amazon’s AWS, Microsoft’s Azure and Google Cloud, as well as other local players.

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According to Simon Hansford, chief executive of British cloud provider UKCloud, since 2011 UK’s spending on cloud technologies has grown at significant pace. He said, “As even more businesses implement digital transformation and look to the future, this trend shows no sign of slowing.” Clearly the pandemic has heightened the importance of the cloud, as industries adapt it with high speed to support a more digital workforce as also to cater to digitally-focused customer needs.

Yet, in other markets, analysts believe that larger enterprises have underinvested in the cloud technology. From what data has been collected by Omdia, a technology consultancy, it was found that by 2025, the portion of overall technology spend allocated to cloud computing by big businesses will remain below 20%. That and the average proportion of IT spending on the cloud will rise from 8.9% in 2020 to 12.4% in 2025, with the remaining bulk of IT spending consumed by infrastructure, network, applications and staffing costs.

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In fact, it was discovered that start-ups and smaller companies have found it easier to run businesses from the cloud and large enterprises faced more difficult to move away from their legacy systems. For them, the transition to cloud solutions could even take 5-10 years!

However, large enterprises are making progress. That said, telecom companies were found to be one of the firsts to offer cloud-like services in Europe, but soon lost the battle to “hyperscalers” from Silicon Valley including giants like Amazon, Google and Microsoft. Nevertheless, telecoms companies have started to consider how they can harness the cloud themselves, as also demonstrated by Vodafone’s tie-up with Google to co-develop cloud-based technologies to sell to their respective customer bases. Similarly, Dish, a soon-to-launch US network, will run its entire network on AWS servers.

It has been predicted that North America, the UK, the Nordic countries, Benelux, France, Germany and Australia will all soon become “late majority” markets, where the average spend on cloud computing will reach between 17-20%.

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