Cloud infrastructure spending exceeds on-premise for the first time

By 2025, businesses will be spending 22% of their budget on cloud technologies

group of people stand around a table with multiple clouds around them

Businesses are spending more money on cloud infrastructure compared to legacy, on-premise environments for the first time, according to the Cloud Industry Forum.

The CIF's study, conducted by Vanson Bourne revealed that firms are more open to multi-cloud environments, with three-quarters of firms adopting the use of more than one cloud service to power their digital transformation process.

"UK businesses clearly recognise the need for transformation and are gradually leaving legacy technologies behind in favour of next generation technologies as they pursue competitive advantage," Alex Hilton, CEO of CIF said.

"Cloud is critical to this shift, thanks not only to the flexibility of the delivery model, but also the ease with which servers can be provisioned, which reduces financial and business risk. Furthermore, cloud's ability to explore the value of vast unstructured data sets is next to none, which in turn is essential for IoT and AI."

UK businesses are spending 19% of their IT budgets on cloud infrastructure, compared to 18% of budgets spent on-premise. Within four years, the CIF thinks the amount of money spent on the cloud will increase to become 22% of budgets. The firm is predicting the gap will widen as more organisations realise the benefits of cloud vs. on-premise architecture.

Although take-up is growing, there's still a way to go until more businesses can use the cloud to power their digital transformation journey, with the CIF highlighting skills shortages as a major barrier to both cloud and cloud-powered application adoption.

"It's clear that the majority of UK organisations are right at the start of this journey and many are being prevented from exploiting IoT, blockchain and AI due to skills shortages, a lack of vision, and, indeed, a lack of support from vendors," Hilton added.

"The research further supports this idea as 15% of respondents reported they would struggle to find the right partner to assist in the implementation process, suggesting that while there's a willingness to adopt these technologies, businesses are challenged by supply-side issues in the channel."

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