Gartner: Cloud computing is becoming 'a business necessity'

According to Gartner, the cloud will become a vital component of business development by 2028, with cloud computing necessary to maintain competitiveness

Cloud services are projected to become a business necessity by 2028, according to new research by Gartner.

The company has predicted that by this time, cloud computing will shift from being a technology disruptor, to becoming a necessary component for maintaining business development and competition. In addition, it anticipates that global public cloud services spending will total US$679bn in 2024 alone.

2023 has seen plenty of fast-moving changes for the data centre sector, from AI adoption to hybrid cloud solutions. As a result, companies will be keen to stay ahead in their developments and continue adopting new technologies to maximise value.

Unlocking real value with AI and the cloud

IT spending on public cloud services has continued to rise throughout 2023, according to Gartner. Next year in 2024, the company forecasts that worldwide end-user spending on public cloud services will total US$679bn, as well as being projected to exceed US$1tn in 2027.

“Organisations are actively investing in cloud technology due to its potential to foster innovation, create market disruptions, and enhance customer retention in order to gain a competitive edge,” says Milind Govekar, VP Analyst at Gartner. 

“While many organisations have started to seize the technical advantages of cloud, only a few have unlocked its full potential in supporting business transformation. As a result, organisations are using the cloud to launch a new wave of disruption driven by artificial intelligence (AI), enabling them to unlock business value at scale.”

The role of cloud is set to further expand, with Gartner seeing that the majority of companies are considering the cloud as a technology platform moving forward. Currently, organisations are using cloud computing either as a technology disruptor or capability enabler, but Gartner predicts that more than half of companies will start using industry cloud platforms by 2028 in order to accelerate business initiatives.

In the next five years (2028), Gartner believes that most organisations will be leveraging cloud technologies as a business necessity.

The Future of Cloud Computing Through 2028 (Image source: Gartner)

Moving forward: Revolutionising the data centre

Gartner sees that organisations already utilising the cloud as a technology disruptor are working to harness its transformative potential to revolutionise non-cloud, data centre oriented computing styles and technologies.

Govekar adds: “As businesses navigate through digital transformation journeys, movement to the cloud becomes a key decision point.”

Cloud spending is already rising, with a previous report from Gartner citing that cloud computing spending accounted for 33% of IT spend in 2020 and is rapidly growing to 45% by 2024. For many businesses in 2023, adopting a cloud model is more compelling in comparison to owning and operating on-premises data centres.

The cloud model boasts many advantages for enterprises, including lower costs, greater agility and faster innovation. Cloud technologies work to accelerate their digital efforts and provide businesses with greater capabilities. In addition, plenty of larger organisations are adopting a hybrid-cloud approach in order to achieve flexibility and faster transformation.

Gartner states that companies adopting cloud technology as a capability enabler are using its potential to enable new capabilities such as elasticity, rapid continuous integration/cloud delivery (CI/CD), serverless functions and AI-infused APIs. The aim is to improve processes that were difficult to achieve pre-cloud. The company states that businesses must evaluate factors carefully, such as investment into skills development, breaking down operational silos, and promoting collaboration among teams to seamlessly adopt automation.

With cloud computing as an innovation facilitator, Gartner says that organisations can distribute platform business concepts widely by using its underlying platform technology to provide interconnections, scale, aggregation and analysis capabilities, allowing the use of technology as a fundamental component of a business model.

“By leveraging the ecosystem of cloud providers, organisations can introduce innovative products and services, such as fraud prevention solutions for second-hand cars from tire manufacturers, or rapid vaccine development through cloud-based machine learning by pharmaceutical companies,” says Govekar.

By 2028, Gartner predicts that most organisations will fully transform into digital entities that are capable of sensing and responding to business and market conditions. 

Govekar continues: “With cloud computing becoming an integral part of business operations in 2028, CIOs and IT leaders will have to implement a highly efficient cloud operating model in order to achieve their desired business objectives.”

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