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Shift to Cloud Computing Creates a Disruptive Transition

Line of Business leaders and forward-thinking CIOs have applied cloud computing services to deliver new applications quickly. At first, IT industry analysts were really unsure of the long-term impact -- because they had assumed that organizations would move cautiously to adopt this progressive business technology.

Meanwhile, most traditional IT vendors were monitoring the enterprise shift to cloud computing, particularly SaaS offerings, as the trend started to impact their enterprise software and hardware revenues. Yes, they anticipated change, but they didn't foresee the speed of disruption to their legacy business models.

Ultimate Cost of IT Vendor Complacency

More than $1 trillion in IT spending will be directly or indirectly affected by the shift to cloud during the next five years, according to the latest worldwide study by Gartner. According to their market assessment, this transition will make cloud computing one of the most disruptive forces of IT spending across the globe.

"Cloud-first strategies are the foundation for staying relevant in a fast-paced world," said Ed Anderson, vice president at Gartner.

Truly, the impact has been remarkable. The market for cloud computing services has grown to such an extent that it is now a very significant percentage of total IT spending, helping to create a new generation of start-up vendors and niche cloud service providers.

IT spending is already shifting from traditional IT offerings to cloud services at an alarming rate. The aggregate amount of the shift in 2016 is estimated to reach $111 billion, increasing to $216 billion by 2020. The total impact of these shifts are determined by comparing IT spending on cloud services with traditional non-cloud services within the same market categories.


In addition to the direct effects of the shift to cloud, many markets will be affected somewhat indirectly. Gartner says identifying indirect effects can help IT managers ensure they are getting the best value from new expenditures and are protected against risk -- as well as enabling them to exploit the many benefits.

Cloud Shift will Gain New Momentum

For example, instead of buying operating systems for each computer user in the traditional way, many will be provided as OS images -- particularly with the use of containers for next-generation applications. And, data storage needs can be met by a shift to cloud storage services, instead of buying dedicated storage systems.

"Cloud shift is not just about cloud. As organizations pursue a new IT architecture and operating philosophy, they become prepared for new opportunities in digital business, including next-generation IT solutions such as the Internet of Things (IoT)," said Mr. Anderson.

Furthermore, Gartner analysts believe that organizations embracing dynamic, cloud-based operating models position themselves better for cost optimization and increased competitiveness. Therefore, the velocity of the shift to cloud services is likely to accelerate as more enterprise organizations discover the inherent strategic value.

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