Why IT Leaders Are Spending More on Cloud Solutions

As they anticipate a slowing economy, many executives are looking for places to cut spending — travel, real estate, and hiring budgets are all on the chopping block. But how are chief information officers responding? By spending more money on software, especially cloud-based services. 

A survey by Gartner predicts that enterprise spending on software will grow nearly 10% worldwide this year to about $807 billion. Datacenter operators that host cloud-based software are also expected to grow, with spending on servers increasing nearly 17%.

Even as tech spending moderates in the face of rising prices and higher interest rates, cloud solutions remain a focus for IT leaders. The Wall Street Journal reports that enterprises are looking beyond basic data center migrations to providers that can help maximize the value of their business data.

CIOs Embracing Strategic Roles

That level of growth spotlights the key strategic role that CIOs and their technology decisions are increasingly playing in companies of all sizes. By investing in flexible cloud technologies, CIOs are keeping their businesses competitive and lean, and better able to adjust to changing market conditions.

Projections for rising IT spending into 2023 — despite widespread recession fears — indicate a revolutionary period of greater cloud adoption is ahead. The question isn’t whether businesses should lean into the cloud, but how best to manage becoming cloud-first — including security and compliance, internal enablement plans, and a sound overall strategy.

Doing More With More

Cloud-based infrastructure allows for prepackaged solutions at scale with lower up-front costs. For this reason, the number of companies specifically adopting subscription software is accelerating. 

According to Gartner, nearly 45% of IT spending is expected to shift to cloud solutions by 2024 — adding to the reasons software-as-a-service remains one of the largest cloud service segments in the market. 

“Business is pretty fast-moving, so cloud makes more sense. We don’t have a single application that’s on-premises,” says Arya Rana, senior director of business technologies at ZoomInfo. 

“When economic times get difficult, hiring plans change. The advantage of most cloud applications we use is that installation is pretty simple,” Rana says. “I can have one person with basic knowledge supporting it, instead of having to deal with an on-prem setup — maintaining that is huge.”

A Future in the Cloud

The adoption of cloud infrastructure will likely grow exponentially over the next few years, increasing the corporate need to embrace full digital transformation. 

Growth in a cloud-based future can only happen when there’s alignment across process, data, and technology as one source of truth to drive business motions. These three key ingredients should always be at the forefront of any movement to the cloud.

“All three have to merge together to have a successful business system that drives growth,” Rana says.