As cloud spending spikes, here's where to invest

Overall cloud spending is growing faster than expected, but what matters most is investing in the right areas

Corporate spending on cloud computing will continue to explode, according to a report from IHS Technology, reaching $235.1 billion in 2017, triple the $78.2 billion spent in 2011.

We have a winner! Although that's the highest prediction I've seen so far, it's pretty much in line with the growth I'm witnessing.

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Of course, we still have the "What is cloud computing?" aspect of this situation, including enterprise technology companies tossing everything but the kitchen sink under the "cloud" banner to show big adoption and revenue numbers. Plus, a significant aspect of cloud growth comes from displacing traditional IT systems. That's not new money, just moved money.

The question that matters most, though, is how that $235.1 billion will be spent. They'll of course include:

  • Infrastructure
  • Application hosting
  • Data analytics

Infrastructure will receive the majority of the spending, including enterprise-to-cloud storage migration and compute. Simple data center services will be hosted in public clouds. Although there will be a surge in private cloud growth in the next few years, the expanding use of public IaaS clouds will account for the largest increase.

The pattern for application hosting will be a bit different, in that it is about moving applications from the enterprise to public cloud hosts. Enterprises will use either a direct and simple port (lift-and-shift) or more-complex rebuilds, where the applications are modified to use specific cloud services. It's harder to identify that spending for the cloud, because it's not as discrete from your internal application development spending as, say, public cloud adoption costs are from data center investments.

As I noted in a recent post, we'll see significant investments in data-as-a-service offerings because they offer so much clear business value. This cloud spending will be easy to identify.

The massive uptick in cloud computing will start to separate into specific areas of expansion, and they'll be easier for us to understand. Yes, keep an eye on the overall direction and magnitude of cloud growth, but focus on the specific aspects and the value they bring to your business -- that's where you want to align your own investments.

This article, "As cloud spending spikes, here's where to invest," originally appeared at Read more of David Linthicum's Cloud Computing blog and track the latest developments in cloud computing at For the latest business technology news, follow on Twitter.

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