An energy crisis, inflation and fears of recession: the economic headwinds could not be greater. Nevertheless, they are not affecting all sectors to the same extent. In the technology world there are trends that can escape the unfavourable circumstances at least to some degree. One of them is the cloud. The market researchers from Gartner, for instance, expect investment in the IT sector to continue shifting to the digital realm. And not without reason: the invisible infrastructure of data centres has now penetrated just about all areas of life. From medical provision through the supply of foodstuffs to online banking and the home office, the cloud has become indispensable. According to forecasts, spending just on software in this sector will climb by 11.3% next year. And that's not the whole story: more than half of the outlay by companies on technology in key market segments are set to move to the cloud by 2025.
Among the critical IT categories that are making the move to the data cloud, Gartner cites application and infrastructure software, business process services and system infrastructure. The market researchers reckon that 51% of IT spending in these four categories will have shifted from traditional solutions to the public cloud by the middle of the decade. To compare, the figure this year will only be 41%. “The shift to the cloud has only accelerated over the past two years due to COVID-19, as organisations responded to a new business and social dynamic,” said Michael Warrilow, research vice president at Gartner. Anyone failing to adapt, the expert goes on, faces the risk of being relegated to low-growth markets.
This epochal change is filling the coffers of providers of cloud infrastructure services, known as IaaS in the jargon, among others. According to Gartner, in 2021 the corresponding market globally appreciated 41.4% to reach USDbn 90.9 in total. “The IaaS market continues to grow unabated,” states Sid Nag, VP analyst at Gartner. The experts at Allied Market Research are seeing this too. Their forecast indicates that the global market for infrastructure as a service will expand at an average rate of a good quarter every year until 2030 – a positive outlook for the big players in the sector, then. The number one in the IaaS market, according to calculations of the Synergy Research Group, is tech giant Amazon, which had a 34% market share in the second quarter of 2022, followed by Microsoft (21%) and Alphabet subsidiary Google (10%). Overall, spending on global cloud infrastructure services rose to USDbn 55 April to June, bringing the total outlay for the sector over the last twelve months to more than 200.
Another key factor in the data cloud is the issue of security. While data communication between a local computer and the internet is encrypted, the possibility that unauthorised parties can hack into traffic thought to be secure cannot be excluded. Quite the contrary, in fact: cyber criminality is rising along with the growing number of cloud services. Security software offers a possible way out of this dilemma. That this is another growth market is demonstrated by the forecasts of Mordor Intelligence. The experts project an average annual growth rate of 19.5% for the market in cloud-based database security between 2021 and 2026. Other heavyweights in this sector include Oracle and Fortinet. The latter offers a broad spectrum of services, from email protection in the SaaS segment through a web application firewall to a virtual network firewall in the hybrid cloud. Demand for the products of the US group is high, with the now almost 600,000 customers ensuring strong growth in sales and profits. Fortinet has posted a double-digit percentage increase in earnings every year since its IPO in 2009, the operating margin improving from 14% to 26% over the same period.
Source: Statista