Global end-user spending on public cloud services is forecast to grow 20.7% to total $591.8 billion in 2023, according to the latest forecast from Gartner.

Originally published at Capacity Media

The prediction is up from $490.3 billion in 2022 and is higher than the 18.8% growth forecast for 2022.

“Current inflationary pressures and macroeconomic conditions are having a push and pull effect on cloud spending. Cloud computing will continue to be a bastion of safety and innovation, supporting growth during uncertain times due to its agile, elastic, and scalable nature

Sid Nag, vice president analyst at Gartner

“Yet, organisations can only spend what they have. Cloud spending could decrease if overall IT budgets shrink, given that cloud continues to be the largest chunk of IT spend and proportionate budget growth.”

Infrastructure-as-a-service (IaaS) is expected to experience the highest end-user spending growth in 2023 at 29.8%, while all segments are expected see growth for the year.

“Cloud migration is not stopping. IaaS will naturally continue to grow as businesses accelerate IT modernisation initiatives to minimise risk and optimise costs”

Sid Nag, vice president analyst at Gartner

“Moving operations to the cloud also reduces capital expenditures by extending cash outlays over a subscription term, a key benefit in an environment where cash may be critical to maintain operations.” 

Platform-as-a-service (PaaS) and software-as-a-service (SaaS) will experience the impact from inflation due to staffing challenges and margin protection. However, both segments predicted growth of 23.2% growth for PaaS and 16.8% for SaaS in 2023.

“Higher-wage and more skilled staff are required to develop modern SaaS applications, so organisations will be challenged as hiring is reduced to control costs. But since PaaS can facilitate more efficient and automated code generation for SaaS applications, the rate of PaaS consumption will consequently increase”

Sid Nag, vice president analyst at Gartner

“Despite growth, profitability and competition pressures, cloud spending will continue through perpetual cloud usage. Once applications and workloads move to the cloud they generally stay there, and subscription models ensure that spending will continue through the term of the contract and most likely well beyond. For these vendors, cloud spending is an annuity – the gift that keeps on giving.”