Hey there fellow tech enthusiast! With the new year upon us, it‘s time to peel back the layers on the biggest tech trend – cloud adoption. As cloud continues to transform businesses and entire industries, we need to dig into the numbers that tell the real story.
In this jam-packed guide, we‘ll explore the latest cloud adoption statistics, trends and insights you need for 2023. By the end, you‘ll have the full picture on where cloud adoption stands today – and where it‘s headed next. Let‘s get started!
Cloud Adoption is Accelerating: Key Stats
First, a quick snapshot of critical statistics on cloud adoption:
- 83% of enterprise workloads will be in the cloud by end of 2022, up from 41% in 2020. [1]
- Public cloud spending to hit $600 billion by 2023. [2]
- 63% of SMB workloads will be in public cloud within next year. [3]
- 31% of companies expect over 75% of their workloads to run in the cloud by end of 2023. [4]
- Manufacturing industry‘s cloud spend topped $5 billion in 2019. [5]
- 70% of financial services firms remain in early stages of adoption. [6]
It‘s clear that cloud adoption is picking up tremendous momentum. Let‘s unpack the details.
The Enterprise Cloud Migration is in Full Motion
The COVID-19 pandemic put cloud adoption into hyperdrive as remote work forced businesses to rapidly migrate online. Per Zippa, 61% of companies moved workloads to the cloud in 2020 alone! [7]
Flexera‘s 2022 State of the Cloud Report gives us further insights. Enterprises are consolidating their cloud footprint – the average company uses just 2.2 public and 2.7 private clouds, down from 3.1 public and 3.3 private in 2020. [8]
Consolidation enables better oversight and cost optimization of cloud resources. Moreover, an astonishing 83% of enterprise workloads are expected to be in the cloud in 2022, compared to just 41% in 2020. [1]
Looking ahead, Gartner forecasts worldwide public cloud spending will grow a whopping 20.7% to reach $591.8 billion in 2023, up from $490 billion in 2022. [2] The highest growth will come from cloud application infrastructure services (PaaS).
Multicloud Becomes the Norm, Not the Exception
For most enterprises today, operating a multi-cloud environment spanning across multiple public clouds and private data centers is now necessary, not just a strategic option.
Top drivers for a multi-cloud strategy include: [9]
- AI/ML workloads (39%)
- Application development & testing (39%)
- Database clustering (33%)
- Global service delivery (31%)
The flexibility offered by multicloud is also extremely appealing. 35% of companies say performance flexibility is their prime motivator for multi-cloud adoption. [9]
Industry-specific flexibility needs also emerge. 48% of retail and 45% of technology companies want multi-cloud for developer flexibility while 43% of finance firms want to mitigate vendor lock-in. [9]
Cloud Storage and Services Gain Widespread Use
In addition to infrastructure, cloud-based storage and software are massively mainstream.
- iCloud and Dropbox each boast 300 million users – that‘s huge! [10]
- In the EU, 66% use cloud for email and 53% for file storage. [11]
- The cloud ERP software market will grow from $19 billion in 2017 to a whopping $29 billion by 2028. [5]
Adoption of cloud-based AI and analytics tools is also climbing. Per IDC, AI cloud software will represent 14.2% of total enterprise software spending by 2023. [12]
Cloud Cost Optimization is Still a Challenge
While cost savings may be driving cloud adoption, unexpected costs remain a stubborn challenge.
Per CloudZero‘s 2022 survey, only 40% of firms report cloud costs aligned with initial expectations. The rest faced higher than expected costs! [3]
To optimize cloud costs, over 40% of companies now use auto-scaling, shutting down unused resources and hibernating lower priority workloads. [8]
However, FinOps still remains relatively immature. The FinOps Foundation‘s survey shows only 19.5% have mature FinOps practices. 37% are just establishing FinOps while 42% are still progressing. [14]
Clearly, companies have more work to do on managing cloud costs.
The Cloud Drives Innovation, Resilience and Growth
The cloud powers cutting edge innovations like AI, ML, IoT, VR and more by providing flexible infrastructure and services.
It also enables business continuity and resilience. The pandemic accelerated cloud adoption as companies managed remote operations using cloud apps, storage and security.
Going forward, Ignitech predicts public cloud market will expand by a massive $482 billion in 2022 alone! [15]
By 2026, public cloud is expected to account for over 45% of total enterprise IT spending. [16]
Overall, Gartner says over $1.3 trillion in IT spending could shift to the cloud by 2022. [17] The cloud revolution is here!
Industry Specific Cloud Adoption Trends
Banking: 74% of experts believe cloud will fundamentally transform banking by 2021. [18] Cloud enables new payment methods and reduces costs.
Manufacturing: Cloud spending already topped $5 billion in 2019. [5] Discrete manufacturing leads cloud investment.
Financial services: 70% of firms remain in early "trial and test" stages of cloud adoption. [6] But 60% plan for hybrid multi-cloud.
Retail and technology: These industries lead cloud adoption, prioritizing developer flexibility. [9]
Key Steps for a Successful Cloud Migration
Migrating to the cloud brings tremendous opportunities but also challenges around security, costs, compliance and culture.
Here are key best practices for a smooth and successful cloud migration:
- Take a phased approach – Prioritize the easiest workloads first and move in stages.
- Enhance skills – Train staff on cloud and DevOps methodologies.
- Evaluate costs – Model TCO over 3-5 years including tools and labor.
- Optimize costs – Rightsize resources, automate cost management, adopt FinOps.
- Address security – Assess risks and implement appropriate controls and tools.
- Monitor performance – Define KPIs aligned to business goals.
- Manage change – Clear communication, training and support enable cultural shift.
Cloudy Skies Ahead
As cloud adoption gains momentum across industries, companies must balance innovation with pragmatic strategy.
While the stats reveal phenomenal growth, prudent governance and management separates cloud leaders from laggards. Companies that build a resilient cloud foundation will gain the agility and innovation to thrive.
The future is certainly cloudy – but in the most promising way!
Sources
[1] Forbes[2] Gartner
[3] CloudZero
[4] Fortinet
[5] Manufacturing
[6] InformationAge
[7] Zippia
[8] Flexera
[9] Enterprise Strategy Group
[10] Software Testing Help
[11] Eurostat
[12] IDC
[13] Datometry
[14] FinOps Foundation
[15] Ignitech
[16] TechRepublic
[17] Gartner
[18] The Economist
