Government ‘to surpass private sector cloud spend’

Cloud SaaS

by Joe Curtis| 28 April 2014

Kable predicts that UK public sector will splash the cash on cloud.

Governments are set to spend proportionally more on cloud computing than private industries as expenditure is predicted to increase 35% year-on-year until 2018.

The UK government's annual budget for cloud services will grow by 35.6% year-on-year over the next four years, according to the latest statistics released exclusively to CBR by research firm Kable.

That outlay is 4.5% more than the combined predicted cloud spend of Britain's financial, pharmaceutical, manufacturing and insurance industries.

Kable also pegs the UK government to lead international public sector spend on cloud, ahead of the US (34.7% year-on-year), Denmark (30.5%), and Canada (30.1%), hitting $8.4bn by 2018.

The British government's G-Cloud, an initiative to open up public sector procurement to SMBs, is now in its third year and has helped boost public sector spending on SMB cloud services to around 20% of total procurement, with a target of 25% by March 2015.

Spain propped up Kable's table of European and US governments, with a spend increase of just 24.6% a year.

Communications and IT companies are set to grow cloud spending by 42.5% year-on-year in the UK - the highest of any country - followed by retailers with 36.1% year-on-year growth and insurance companies at 32.8%.

The results come a week after Forrester Research predicted private sector cloud spending will hit $191bn by 2020 as firms turn to virtualisation to replace old IT infrastructure, also predicting a rise in spending from $58bn in 2013 to $72bn this year.

However, Zahl Limbuwala, the CEO of data centre experts Romonet, warned: "Even if a service is moved to the cloud, running a data centre, fully utilised or not, still costs money. If an enterprise doesn't know those exact in-house costs, and how they will change if services move to the cloud, they can't be certain that adopting cloud services actually gives the greatest savings and makes the most financial sense."

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