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Cloud spending picking up after blip

Spending on cloud technologies had dipped but is back on the growth path, says a report on a Wall Street Journal blog. Corporate spending is likely to increase on it further this year, even as overall budgets for IT decline.

The forecasts come from Gartner Research, and suggest that spending will go up 16 per cent to $204.2 billion this year, compared with 13.8 per cent growth in 2015 and a 17.7 per cent rise in 2014. Overall technology spend is expected to be $3.49 trillion in 2016, down 0.5% from last year.

The overall decrease is not a surprise as the trend towards the cloud is often seen as a cost saving measure, with economies of scale available to co-hosted and co-located data and applications that wouldn’t be possible if every organisation were to host its own systems.

The interesting thing is going to be how the contracts are drafted in an environment in which, for example, European legislation makes more demands on the data owners even as they push their technology out to third parties. It’s possible to outsource the technology but not the legal responsibility for the information; the contracts are going to have to be watertight.