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Multi-Cloud Usage will Gain New Momentum in 2017

High growth continues within the public cloud sector. CIOs report that growth in their hosting and cloud computing services spending will outpace growth in their overall IT spending, according to the latest worldwide market study by by 451 Research.

This growth trend applies across almost every vertical market and company size category, but is most pronounced among very large businesses, which expect an average of 33.3 percent growth in hosting and cloud services spending this year.

Among survey respondents, 88 percent will increase their hosting or cloud budgets in 2017 vs. 2016 -- that's compared to 70 percent that expect to increase total IT budgets year-over-year. In contrast, just 9.5 percent expect a decrease in hosting or cloud spending -- that's compared to 22.3 percent that expect a decrease in their total IT spending.

Public Cloud Service Market Development

"We see the pace of investment in hosting and cloud services exceeding investment in IT overall, meaning those services are becoming a focus of IT investment, via both new projects and the migration of existing workloads," said Liam Eagle, research manager at 451 Research.

Their analyst also believes that even CIOs that are reducing IT spending overall are still investing in cloud computing. Therefore, public cloud service providers should pursue them, and offer to help reduce existing legacy IT costs. Moreover, the study found that a variety of drivers are leading to increased spending.

Those key drivers include strong representation for the migration of workloads from on-premises environments to the public cloud; adding new resource capacity due to business growth; new IT initiatives; and businesses buying additional services they previously did not have.

These drivers vary significantly by company size, with small businesses strongly emphasizing new capacity due to growth, and medium and very large businesses primarily focused on migrating on-premises workloads to a public cloud service provider.

"Significant adoption profile differences among different company sizes in terms of adoption rates and drivers reinforce the idea that company size is not just a category difference but indicative of markets with totally different hosting and cloud services characteristics," says Mr. Eagle.

According to the 451 Research assessment, this gives cloud service providers a compelling business case for specialization and is one of the reasons the cloud compute and storage market is served by such a wide variety of different vendors.

451 Research finds that public cloud and SaaS providers -- such as Microsoft Azure and Amazon Web Services (AWS) -- are being adopted by the largest portion of respondents. However, approximately 50 percent of the survey respondents indicate they're using another service providers.

Outlook for Multi-Cloud Service Growth

Survey respondents on average say they intend to increase their overall cloud compute and storage spending. Besides, that increase is also planned with several vendors, including public cloud and managed hosting vendors in aggregate.

However, CIO plans to increase spending for an individual vendor still trail the hosting and cloud spending increases overall, suggesting that over time enterprises will spread their growing budget across a larger number of qualified public cloud service providers. That's why the multi-cloud market is the one to watch.

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