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Enterprise Cloud IT Spending to Grow 20% in 2014, Reaching $174.2B: IHS Research

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As enterprise businesses continue to see advantages in moving their information technology services, applications and infrastructure to a cloud-based architecture, global business are expected to spend $174.2 billion this year on cloud infrastructure and services, up a solid 20 percent from $145.2 billion in 2013, according to IHS Technology research.

In the new report, “The Cloud: Redefining the Information, Communication and Technology Industry”, researchers at IHS track cloud marketplace trends and predict overall market revenue in this segment to roughly triple from $78.2 billion in 2011 to $235.1 billion in 2017. Spending has been driven by cloud services, applications, security and data analytics as they continue to account for a growing portion of total enterprises IT spending, and the desire among businesses to remain relevant to consumers through more innovative technologies.

IHS senior director and principal analyst for the cloud and big data Jagdish Rebello said in a statement, “The robust growth will come as an increasing number of large and small enterprises move more of their applications to the cloud, while also looking at data analytics to drive new insights into consumer behavior.”

The vast amounts of data produced and consumed daily on mobile devices like smartphones, tablets and computers require larger storage solutions, but also the ability to leverage this data to drive cloud analytics engines, but also to protect it.

IHS is very optimistic about the cloud industry, however, earlier this year Forrester Research predicted slow cloud growth in 2014, citing economic uncertainty, conservative buyers, and cloud pricing models slowing adoption in 2014.

But there is reason for companies to adopt cloud solutions. IHS expects the number of global consumer cloud subscription seats to jump to 730 million this year, up from 630 million in 2013, representing a potentially vast base of users to which cloud suppliers can market their products and other non-cloud services. Wireless operators, for instance, have already lost out on opportunities for cloud-related revenue by lagging behind in cloud offerings compared to other stakeholders like Google and Amazon.

And still, there are challenges such as data management, security and compliance, and network access that need to be addressed when it comes to many cloud services.

However, as technologies and corporations work to overcome these challenges, cloud services might be able to provide the convenience, functionality and cost-savings that cause enterprises to spend more of their budgets on cloud services.


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About the Author

David Hamilton is a technology journalist and Contributing Editor of the WHIR. Based in Toronto, David has covered the hosting industry internationally for the WHIR with particular attention to innovative hosting solutions and the issues facing the industry. He has written for the National Post and other news outlets, and is a graduate of Queen’s University and the Humber College School of Media Studies.

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