Cloud hosting has become an indispensable part of the operations of most businesses today and increasingly, even amongst consumer markets.
This is especially true with the rapid growth of generative AI, which leans heavily on cloud infrastructure. Understanding it as a trend and its current challenges is important for all tech-oriented people.
A 2021 report by O’Reilly predicted that by 2023, over 90% of US enterprises were expected to have adopted some form of cloud hosting. And, according to tech research firm Gartner, the global growth in the cloud hosting market share will be even more dramatic:
“Gartner predicts that by 2027, more than 70% of enterprises will use industry cloud platforms to accelerate their business initiatives, up from less than 15% in 2023.”
With more sensitive data and critical systems moving to the cloud, it is important to understand some of the key statistics around adoption, usage, costs, and security.
This article will explore just some of the many statistical highlights that showcase this rapid growth, as well as the evolving challenges and future trends around cloud hosting.
Adoption and Usage
As we noted above, the adoption of cloud hosting services continued its blistering growth in 2023. According to the same Gartner study referred to above, public cloud services spending is estimated to reach $564 billion globally this year—a 21% year-over-year increase. In 2024, they expect it to grow to a total spend of $679 billion, continuing its +20% annual growth rate.
In Europe, 58% of organizations report heavy cloud usage, which is just slightly less than the 63% global average.
Another study found that remote work, particularly during the COVID-19 measures, has been a key factor in accelerating this trend. For instance, 61% of companies said that their cloud usage was higher than planned during COVID-19 restrictions.
The sheer number of services that businesses and their employees are using may be what is most striking. On average, enterprise employees are now using 36 different cloud applications daily. As of 2019, in a report by NetSkope, companies themselves leverage over 1,300 distinct services in the cloud.
While Gartner had predicted back in 2019 that 45% of enterprise IT spending would shift to the cloud by 2024, it has surpassed that. Instead, it will cross the 51% threshold by the end of 2024, thus demonstrating the accelerating uptake of cloud solutions.
Costs and Optimization
With such rapid growth in cloud-based solutions for enterprise IT needs, there has been an almost inevitable struggle with rapidly rising costs. In a 2022 study, Anodot found that almost half of all businesses are finding it difficult to get costs under control.
The reasons for that are waste, fragmentation of services, complex pricing models, and more. Not surprisingly, then, 61% of businesses intend to optimize their cloud infrastructure costs in 2024 as a key priority.
This has become such a large problem that the internet is filled with articles discussing ways to reduce budgets and streamline the services that are being used.
In an article in Dataconomy discussing the rapid growth of cloud computing and associated problems, Anodot’s co-founder, David Drai, said the following: “Shifting to the cloud requires a delicate balance between the speed of workload migration and cost control.
Today, cloud cost management, which is all the more crucial as businesses strive to mitigate wasted resources and shore up revenues, should be based on four key elements: visibility, insights, recommendations, and automated actions.”
Nonetheless, cost challenges should not obscure the fact that 82% of companies in a Microsoft survey reported that cloud technology had saved them money.
Security and Compliance
Challenges of controlling costs aside, security and compliance also present obstacles to cloud success and should be reviewed and strengthened with best practices. Just take a look at some of these numbers.
93% of businesses identify security as their number one concern, especially around potential data leakage. While cloud server infrastructure can provide heightened security as a component of its service proposal, it isn’t infallible.
According to some surveys, 80% of companies experienced security incidents in 2023, and 27% of organizations. A full 45% of security breaches were cloud-based. That suggests both good and bad elements.
Nonetheless, the critical nature of data and its security have led to growing anxiety. A survey by Dimensional Research of IT professionals found that 87% were anxious that a lack of cloud visibility was obscuring threats to organizational security.
The solution is improved visibility, so it’s not surprising that 70% of organizations have deployed management solutions. These improve both cost overhead and security.
Read: WPA2 Password, the Safest Form of Wifi Password?
Key Trends and Trajectories
Although we have noted some challenges, the headline is that these are growing pains and that they have done next to nothing to slow the massive uptake of cloud services.
Studies suggest that the cloud computing market will see a 16.4% CAGR between 2024-2029 reaching almost $1.5 trillion globally.
According to the 2021 O’Reilly study that was quoted at the top of this article, there will continue to be an aggressive process of app migration: “Almost half (48%) of companies surveyed said they plan to migrate 50% or more of their applications to the cloud in the coming year. 20% plan to migrate all of their applications.”
This is clearly an irreversible process and one that will require COOs and IT departments to adjust to over the next decade or more. It is a rapidly evolving and growing space.
Conclusion
Statistical measures make it clear that cloud hosting is entering a new stage of maturity, underscored by prolific adoption and game-changing innovation.
Nonetheless, issues around costs, visibility, and security persist as urgent threats. Mastering statistical insights in these areas will separate the leaders of tomorrow. Companies that focus on transparency and optimization around hosting stand to build a potent competitive edge.
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