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Cloud computing growth: The future is floating on the cloud

Cloud computing enabled companies to thrive during the COVID-19 pandemic and will continue to revolutionize how organizations conduct business.

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Quantumrun Foresight
February 27, 2023

Insight summary

The growth of cloud computing has allowed businesses to improve their operations and increase efficiency while providing a scalable and cost-effective data storage and management solution. The demand for skilled professionals with cloud expertise has also increased dramatically.

Cloud computing growth context

According to research firm Gartner, public cloud services spending is estimated to have reached $332 billion USD in 2021, a 23 percent increase compared with USD $270 billion USD in 2020. In 2022, cloud computing growth is expected to surge 20 percent to $397 million USD. Software-as-a-Service (SaaS) is the biggest contributor to spending, followed by Infrastructure-as-a-Service (IaaS).

The 2020 COVID-19 pandemic drove an accelerated public and private sector mass migration to cloud services to enable remote access and maintenance of software, desktop tools, infrastructure, and other digital systems. Cloud services were also heavily used for pandemic management, including tracking vaccination rates, transporting goods, and monitoring cases. According to market research firm Fortune Business Insights, cloud adoption will continue to increase rapidly and have a market value worth $791 billion USD by 2028.

According to Forbes, 83 percent of workloads are using cloud services as of 2020, with 22 percent using a hybrid cloud model and 41 percent using a public cloud model. The adoption of cloud services has allowed businesses to improve their operations and increase efficiency by reducing the need for on-premises infrastructure and enabling remote work. Another factor contributing to the growth of cloud computing is the increasing demand for data storage and management. The cloud provides a scalable and cost-effective solution for data storage, as businesses only pay for the storage they use. In addition, the cloud offers a secure environment for data storage, with advanced security measures in place to protect data from cyberattacks.

Disruptive impact

There are several other reasons behind the unprecedented cloud computing growth. The primary motivator is the long-term savings on labor and maintenance of software and IT infrastructure. Since these components can now be purchased on a subscription basis and are highly customizable based on a company's needs, businesses can focus on their growth strategies instead of building their in-house systems.

As the world emerges from the pandemic, the use case of cloud services will also evolve, becoming even more necessary to support online connectivity, such as 5G tech and the Internet of Things (IoT). The IoT refers to the interconnected network of physical devices, vehicles, and other objects equipped with sensors, software, and connectivity, enabling them to collect and exchange data. This interconnectivity generates a large amount of data, which needs to be stored, analyzed, and managed, making cloud computing an ideal solution. The industries that are most likely to accelerate cloud adoption include banking (a faster and more streamlined way to conduct transactions), retail (e-commerce platforms), and manufacturing (the ability to centralize, operate, and optimize factory operations within one cloud-based tool).

The growth of cloud computing has also had a major impact on the job market. The demand for skilled professionals with cloud expertise has increased, with roles such as cloud architects, engineers, and developers in high demand. According to the job site Indeed, cloud computing is one of the most in-demand skills in the job market, with job postings for cloud-related roles increasing by 42 percent from March 2018 to March 2021.

Wider implications for cloud computing growth

Potential implications for cloud computing growth may include:

More cloud service providers and startups being established to take advantage of the high demand for SaaS and IaaS.

Cybersecurity firms experiencing growth as a necessary component of cloud safety. Conversely, cyberattacks can also become more common, as cybercriminals take advantage of small businesses that don't have sophisticated cybersecurity systems.

Government and essential sectors, like utilities, relying heavily on cloud services to scale up and provide better automated services.

A gradual increase in new startup and small business creation metrics globally as cloud services make starting new businesses more affordable for entrepreneurs.