UK cloud spend growth 'to eclipse hardware and services'

Cloud SaaS

by Joe Curtis| 07 May 2014

Cloud budgets are increasing five times as fast as hardware budgets.

Cloud computing spend is set to grow up to 13 times faster than companies' outlay on IT hardware and services, according to research house Kable.

On average, UK cloud budgets are set to grow annually at a 34% compound annual growth rate (CAGR) until 2018, according to data made exclusively available to CBR.

That is more than five times as much as the predicted 4.5% CAGR annual growth in outlay on hardware and 13 times as much as the 2.6% CAGR annual growth in spending on IT services, according to the data.

However, while cloud spend will hit a high of £616m by 2018 (in the retail sector), hardware outlay regularly clocks in at more than a billion pounds in some industries (including retail banking), meaning cloud still has plenty of room to grow.

The question will be how much of hardware and service spending cloud will proceed to eat into.

CBR revealed last week that the British government is set to increase its budget by 35.6% year-on-year over the next four years, surpassing the combined spend of Britain's financial, pharmaceutical, manufacturing and insurance industries.

But outside the public sector, the biggest spenders on cloud is the retail sector - with a 36% CAGR annual spend, whose collective spend is set to grow from £176m this year to £616m come 2018.

Retail banking isn't far behind at 34.8%, after many high street banks' mobile apps experienced glitches as their aged mainframes struggled to keep up with user demand back in February.

Meanwhile, IT hardware spending is predicted to grow by 4.5% - 1.9% more year-on-year than the outlay on IT services - with financial markets due to increase their collective spend by 6.2% year-on-year until they hit £452m by 2018.

Financial markets will also lead IT services spend growth, according to Kable, expanding budgets by 4.8% year-on-year.

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