Research: Enterprise Spending is Shifting to Cloud 451 Research has released a new report that examines IT budget trends. It finds that enterprise spending on managed hosting and cloud services is growing faster than overall spending. The study found that Microsoft Azure and Amazon Web Services Inc. (AWS), clouds are being adopted by the largest proportion of respondents to its survey. However, nearly half of those responding are choosing a provider other than the top 10 industry leaders. These findings were highlighted by 451 Research today in its recent for-pay report, Voice of the Enterprise: Hosting, Cloud Managed Services and Budgets, as well as other information. Many other reports indicate that AWS is the clear cloud leader. Azure is its main competitor, experiencing faster growth and greater market penetration in some niches. 451 Research also found the same. 451 Research released a statement today saying that AWS and Azure lead respondents’ budget allocations by a substantial margin. AWS (24.8%) was ahead of Azure (20.2%) by several percentage points. “Respondents plan to increase spending for both these vendors on average.” Several other vendors are also planning to increase spending, including managed hosting and public cloud vendors. “However, customers’ plans to increase spending on any vendor’s trail hosting and cloud spend increases overall, suggesting enterprises will spread their growing hosting or cloud services budget over a wider range of providers over time. According to the researcher, the main factors that drive organizations to increase their cloud/hosting spend vary by company size. These drivers are:

  • Migration of workloads from on premises environments to the cloud
  • Business growth requires the addition of new resources.
  • New IT initiatives
  • Businesses purchase additional services that they didn’t previously have

A recent Uptime Institute report found that despite the general trend towards moving operations to the cloud and the increasing popularity of cloud computing, “the vast majority” of enterprise IT workloads are still hosted in colocation datacenters. These driving factors are not evenly distributed across the range of organizations that responded to the 451 Research study. According to 451 Research, these drivers differ by company size. Small businesses (up to 249 employees), medium businesses (250-999 employees), and large businesses (over 10,000) are more focused on new capacity due to growth. The company size also influences overall spending trends. Cloud/hosting spending will outpace overall IT spending by 12 to 25.8 percent. The research firm stated that although this trend is applicable to all vertical markets and companies of any size, it is most evident in large businesses (1,000-9999 employees) which expect an average 33.3 percent increase in cloud services and hosting spending. 451 Research stated that its report was based upon research with approximately 1,000 IT professionals around the globe, as well as survey responses from more than 60,000.

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