More than half of enterprise IT spending will shift to the cloud by 2025 according to Gartner, overtaking spending on traditional IT.

Gartner said its ‘cloud shift’ research only includes enterprise IT categories that can transition to cloud within the application software, infrastructure software, business process services, and system infrastructure markets.

Over half - 51 per cent - of IT spending in these four categories will have shifted from traditional solutions to the public cloud by 2025 according to Gartner, compared to 41 per cent in 2022.

The analyst house predicted that almost two-thirds - 65.9 per cent - of spending on application software will be directed toward cloud technologies in 2025, up from 57.7 per cent in 2022.

In 2022, traditional offerings will constitute 58.7 per cent of the addressable revenue, but growth in traditional markets will be much lower than in cloud according to Gartner.

The research said demand for integration capabilities, agile work processes, and composable architecture will drive the continued shift to the cloud, as long-term digital transformation and modernisation initiatives are brought forward.

In 2022, more than $1.3 trillion in enterprise IT spending is at stake from the shift to cloud, which will grow to almost $1.8 trillion in 2025 according to the analyst firm.

Gartner said ongoing disruption to IT markets by cloud will be amplified by the introduction of new technologies, including distributed cloud, and many of these will further blur the lines between traditional and cloud offerings.

“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. “Technology and service providers that fail to adapt to the pace of cloud shift face increasing risk of becoming obsolete or, at best, being relegated to low-growth markets.”

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