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More Enterprises Deploy Hybrid IT for Cost Optimization

As the impact of the global pandemic disrupted enterprise operations, more CIOs and CTOs determined that their highest priority was maintaining existing IT services. For many, that meant scaling-up public cloud services and enhancing the management of on-premises IT resources.

The worldwide public cloud services market is forecast to grow 6.3 percent in 2020 to reach a total spend of $257.9 billion -- that's up from $242.7 billion in 2019, according to the latest global market study by Gartner.

Also, infrastructure that supports remote working, such as SD-WAN and virtual workspace solutions, has gained new momentum as more organizations deploy the capabilities that enable their employees to connect to enterprise IT systems from their home-based office.

Public Cloud Services Market Development

Desktop as a service (DaaS) is expected to have the most significant growth in 2020, increasing 95.4 percent to $1.2 billion. DaaS offers an inexpensive option for enterprises that are supporting the surge of remote workers and their need to securely access enterprise applications from multiple devices and locations.

"When the COVID-19 pandemic hit, there were a few initial hiccups but cloud ultimately delivered exactly what it was supposed to," said Sid Nag, vice president at Gartner. "It responded to increased demand and catered to customers’ preference for elastic, pay-as-you-go consumption models."

Software as a service (SaaS) remains the largest market segment and is forecast to grow to $104.7 billion in 2020. The continued shift from on-premises license software to subscription-based SaaS models, in conjunction with the increased need for team collaboration tools, is driving new growth.


The second-largest market segment is cloud system infrastructure services -- or infrastructure as a service (IaaS) -- which Gartner has forecast to grow by 13.4 percent to reach $50.4 billion in 2020.

According to the Gartner assessment, the effects of the global economic downturn are intensifying organizations’ urgency to evolve from a dependency on legacy IT infrastructure operating models.

Public cloud services serve as the one bright spot in the outlook for IT spending in 2020. Cloud spending in many regions is expected to grow rapidly as economies reopen and more normal economic activity resumes, with regions such as North America expecting to return to higher spending levels as early as 2022.

"The use of public cloud services offer CIOs two distinct advantages during the COVID-19 pandemic: cost scale with use and deferred spending," said Mr. Nag.

CIOs can invest significantly less cash upfront by utilizing public cloud technology rather than scaling up on-premises data center capacity or acquiring traditional licensed software.

Outlook for Hybrid IT Infrastructure Growth

For the remainder of 2020, organizations that expand remote work functionality will prioritize collaboration software, mobile device management and distance learning investments -- as well as the hybrid IT infrastructure to rapidly scale and support additional capacity, when needed.

That said, I believe organizations that have already embraced a hybrid IT architecture -- where on-premises server and storage systems are combined with public cloud services -- will gain a strategic digital business advantage. This model offers superior flexibility and proven cost-containment.

Furthermore, advanced SD-WAN and application delivery solutions provide the required security and compliance that CISOs demand from new enterprise IT investments. The same criteria are valued by CFOs seeking assurance that branch offices and remote workers have cost-effective IT options.

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