Cloud Adoption Statistics for 2020
Cloud computing is what the business world and Hosting Tribunal call a “no-brainer”.
It offers enhanced security and stability, helps cut costs, and gives companies greater flexibility. The latter comes in handy when you need to navigate the ever-changing terrain of doing business – which most companies appreciate.
Cloud services are taking the business world by storm and cloud adoption statistics tell the same story.
Here is a taste of what’s to come:
Incredible Cloud Adoption Stats (Editor’s Choice):
- The public cloud service market is expected to reach $623.3 billion by 2023 worldwide.
- 83% of enterprise workloads will be in the cloud by 2020.
- 94% of enterprises already use a cloud service.
- 30% of all IT budgets are allocated to cloud computing.
- 66% of enterprises already have a central cloud team or a cloud center of excellence.
- Organizations leverage almost 5 different cloud platforms on average.
- 50% of enterprises spend more than $1.2 million on cloud services annually.
The cloud is already a big deal and it’s only going to keep growing for any foreseeable future.
Fascinating Cloud Adoption Facts
Let’s hit it off with some awe-inspiring cloud adoption numbers.
1. The global public cloud service market is projected to reach $266 billion in 2020.
This spells out a projected growth of 17.3% since 2018. According to Gartner’s forecast, infrastructure-as-a-service (IaaS) will be the fastest growing segment of the market with 24% predicted growth. It is expected to reach $50 billion by the end of 2020, up from $31 billion in 2018.
Gartner also expects that by 2022, 90% of enterprises who purchase public cloud IaaS will do so from an integrated IaaS and platform-as-a-service (PaaS).
2. More than $1.3 TRILLION in IT spending will be affected by the shift to the cloud by 2022.
Gartner hints that technology providers should use indicators of growth in cloud adoption as a measure for market opportunity. They divide the market into four cloud categories: system infrastructure, infrastructure software, application software, and business process outsourcing.
Currently, the largest shift of IT spending is in application software – 36% of companies that have used other means to host their software, have now moved to the cloud.
In 2019, the shift in system infrastructure was the smallest portion with 13%. The application software will be most prominent in 2022 as well, with a projected 40%, while system infrastructure will shift by 20% toward cloud solutions.
3. $20 billion was the Quarterly SaaS spending in Q2 2018.
Not only did the software-as-a-service (SaaS) market generate $20 billion for the examined quarter, but there was also an yearly growth of 37% in revenue for software vendors.
Microsoft is the world leading SaaS vendor with a market share of over 17% and an annual revenue growth of 45%. Second is Salesforce with a market share of nearly 13%, which has been growing annually by 25%. Adobe comes in to round up the top 3, with a market share just below 10% and an annual growth of 32%.
4. 83% of enterprise workloads will be in the cloud by 2020.
The prediction is that 41% of enterprise workload will be run on public cloud platforms by 2020. Another 20% will be private-cloud-based, while 22% will rely on hybrid cloud adoption.
Further data cited by Forbes, suggests only 27% of workloads will be on-premise by 2020. This would spell a 10% drop in absolute terms in just one year – as the same number for 2019 is at 37%.
5. 94% of enterprises use cloud.
According to Right Scale’s annual State of the Cloud Report for 2019, 91% of businesses used public cloud and 72% used a private one. Most enterprises actually utilize both options – with 69% of them opting for a hybrid cloud solution.
Cloud adoption trends suggest there’s an advantage to using both public and private cloud solutions as this gives more flexibility and variety of options. Just 22% use the public cloud exclusively, and only 3% use a private one exclusively.
6. 30% of all IT budgets were allocated to cloud computing in 2018.
Roughly, 48% went to SaaS, 30% to IaaS and 21% to PaaS.
Naturally, bigger enterprises spend more money on cloud computing. Companies employing more than 1,000 people spent an average of $3.5 million. In contrast, the average spending of smaller companies was at $889,000.
7. 66% of enterprises already have a central cloud team or cloud center of excellence.
Another 21% plan on having one in the near future.
The main responsibilities of these central IT departments shape up to be optimizing cloud costs (for 68% of enterprises), figuring out which applications should run on which cloud (for 62%), and finally – setting policies for cloud use (for 59%).
Cloud Adoption Among Enterprises
Cloud adoption statistics for 2020 give us unprecedented insights into the future. We only need to know where to look.
Just to clear up the lingo – we call companies with more than 1,000 people “enterprises”. Those with less than 1,000 employees we refer to as “small or medium businesses” (SMB).
8. Cost-cutting tops the list of the reasons why enterprises choose to adopt the cloud.
A survey among 166 IT leaders shows there are various reasons why enterprises might move their computing to the cloud. The top one, with 61%, is the companies’ cost-cutting initiative.
Second comes the desire for new features and capabilities with 57%.
For 30% of enterprises, their current warehouses filling up has pushed them toward adopting the cloud.
23% of enterprises simply cite “executive mandate” as a reason, and only 12% of them have cited any other reason at all.
9. Slowly, but surely, enterprises are becoming more proficient in using cloud technology – 68% now consider themselves “intermediate” or “advanced”.
50% of enterprises spend between $1.2 million and $2.4 million per year, while another 38% spend more than $2.4 million. They mostly opt for a multi-cloud strategy with 84% of enterprises relying on one. This is an increase from 2018 when it was 81%. Hybrid cloud strategy also grew from 51% to 58% between 2018 and 2019.
If we look at the state of cloud adoption, we will also see an increase from the previous year. The proportion of enterprises in the intermediate and advanced stages was 68% in 2019, compared to 66% a year earlier. There is a drop in the percentage of enterprises at the beginner stage from 19% to 16%.
Also, more enterprises are actively observing the industry, even though they haven’t taken action – 12%, compared to 9% in 2018.
10. The hybrid cloud is the weapon of choice for 45% of enterprises.
In 2019, 45% of enterprises prioritized some sort of hybrid solution. 31% of enterprises see the public cloud as their top priority. 9% of enterprises prioritize an on-premises private cloud, while 6% will strive for a hosted private cloud.
According to public cloud adoption statistics, the leader among providers for yet another year is Amazon Web Services with a 67% adoption rate. However, its competitors are slowly gaining ground.
Microsoft Azure comes in second with a 60% adoption rate (a rise from 58% in 2018), followed by Google Cloud with 20% (rising from 19%). Other providers are also growing compared to 2018 – Oracle Cloud jumped to 16% from 10%, while Alibaba Cloud doubled its market share, rising from 2% to 4%.
As far as private cloud utilization goes, the leader is VMware vSphere with a 61% adoption rate. Second is VMware vCloud Director with 37%, closely followed by OpenStack with 36%.
Microsoft System Center and Microsoft Azure Stack also show a strong presence with 33% and 28% respectively.
Cloud Adoption Among SMBs
Companies with less than 1,000 employees are the driving force of the economy. They are more flexible and they adapt to changes more easily. This is why, more often than not, they become the test bed for innovations in any market. The challenges with cloud adoption for SMB are, therefore, vastly different.
Luckily, there are managed cloud computing solutions that don’t require any in-house technical expertise and are not overly costly.
11. 94% of SMBs appreciate the upgrade in security that comes from adopting the cloud.
The cloud is cost-effective, more secure and it allows you to do some serious computing without buying infrastructure or hiring trained staff. It’s a perfect fit for smaller businesses. And the numbers prove it.
94% of SMBs report security benefits after moving to the cloud.
59% of SMBs using cloud services report significant productivity benefits from IT, compared to 30% of those not yet in the cloud.
82% of SMBs report reduced costs as a result of adopting cloud technology. 70% are reinvesting the saved money back into their business.
12. 41% of SMBs favor the public cloud.
The workload of small businesses is less than that of enterprises. It’s expected for them to have smaller budgets allocated on cloud services. 51% of SMBs spend less than $120,000 per year. However, 11% still spend more than $1.2 million.
So, how do the size and the restrictive budget shape cloud adoption among small businesses? In contrast to enterprises, SMBs rely more on public clouds. 44% prefer either a single or multiple public clouds. 24% rely solely on a single public cloud. 61% have a multi-cloud strategy, of which only 6% focus on multiple private clouds.
Regardless of the chosen type, 78% of small businesses will fully adopt cloud computing by 2020.
13. AWS is the favorite cloud services provider of SMBs with a 53% adoption rate.
Unlike enterprises, SMBs’ main workload runs in public clouds (43%) vs. private clouds (35%).
Amazon Web Services is the leader when it comes to Public Cloud services adoption rate amongst SMBs with 53%. However, this marks a significant decrease from 2018 when it was at 60%. At the same period, Azure grew from 32% to 41% and although it’s still second, it’s closing the gap with Amazon. Next is Google Cloud with 18% (with no change since 2018).
The leader in private cloud adoption for small companies is VMware vSphere with 35% (33% in 2018). Second most popular are OpenStack with 17% (up from 15% in 2018) and Microsoft System Center with 17% as well. They’re followed by VMware vCloud Director with 15% (up from 11%).
Cloud Adoption Among Government Organizations
Government agencies are also reaping the benefits of this new type of computing. The cloud really does have something to offer everyone.
14. 50% of US government organizations are now using the cloud.
Global cloud computing adoption statistics all point to one thing – the cloud is a good fit for almost every use case and it’s here to stay. More and more government agencies around the world are adopting cloud services, and the US is no exception. Almost 50% of US government organizations are actively using cloud services.
Delivering services efficiently and achieving cost savings are the top two drivers behind this widespread cloud adoption.
According to Gartner, the growth in government use of public cloud services will be in the double digits soon. Their spending will grow at an average of 17.1% per year until 2021.
15. Government organizations still favor the private cloud, even though recently they’ve been increasingly interested in spending on public infrastructure.
(Source: Macquarie Government)
Cloud computing is clearly a part of government technology utilization programs. Significant part of agencies’ workload is already in the cloud – between 20-60% for most agencies. This entails high average spending for cloud services. Most government agencies spend between $2 million and $3 million per year.
According to the Macquarie research paper, lately there has been a significant increase in the investment on public cloud SaaS. Still, the private cloud is still the most significant area of investment. This usually involves IaaS and SaaS workloads.
That’s why experts predict the adoption of private cloud services in the public sector will grow at twice the rate of the public cloud until 2021.
16. 60% of government agencies use an internal team to handle migration to the cloud, with the rest relying on an external service provider.
(Source: Macquarie Government)
Although government agencies acknowledge the quality of the service external vendors provide, they still rely on internal resources to lead the cloud migration projects. 60% of agencies use an internal team, while 40% hire an external service provider.
As a result, 44% of agencies report their cloud implementation went as expected, 20% say it was easier than expected, and 36% claim it was harder.
Cloud adoption statistics show government agencies still prefer private cloud services.
As to the cloud providers, the government relies on the recognized global players – Amazon Web Services and Microsoft Azure. Third and fourth as most preferred are Google and IBM Cloud. Local providers, such as Macquarie Government and Vault, also make a strong showing.
Cloud Adoption in Different Industries
Cloud adoption by industry stats show each sector develops at a different pace. No surprise there, given the different needs and budgets, which lead to the creation of a vast diversity of cloud services. Let’s have a look at the numbers.
17. 90% of experts expect the cloud to revolutionize the banking sector by offering new ways to make payments.
(Source: The Economist Intelligence Unit)
How important is cloud technology for the banking industry? According to a research by The Economist, 74% of experts say the cloud will be a major factor in this sector by 2020. 15% say it will “only” be a moderate factor. However, those stats don’t paint the complete picture.
Cloud adoption in the banking industry is most obvious in the supporting sectors. 68% of experts say the cloud is very important when it comes to “new ways to make payments” and 21% think its somewhat important.
60% say cloud services are very important in “lowering banking costs” and 57% say the same when it comes to “banking for remote populations”.
18. 70% of experts expect the cloud to become a major factor in the retail sector by 2020.
(Source: The Economist Intelligence Unit)
Cloud technology makes retailing more consumer friendly. It is mainly used to increase access, lower prices and reduce costs for customers. 70% of experts say cloud will be a major factor in the industry in 2020, with a further 23% saying it will be a moderate factor. In a period of 5 years, the importance of cloud services in retail grew five-fold.
How important is cloud in supporting sectors of the retail industry? 58% of experts say it’s very important in “reducing costs of goods and services”, 49% place the same importance for “helping new companies grow” and 48% for “increasing access to retail”.
19. The manufacturing industry was projected to spend more than $5 billion on cloud services in 2019.
The manufacturing industry was expected to spend $5.18 billion on cloud computing platforms in 2019. This helped it maintain a 23% growth rate over the past few years. At the same time, global spending on cloud enterprise resource planning (ERP) software is predicted to increase from $19.1 billion in 2017 to $28.8 billion by 2028, attaining a CAGR of 7%.
The cloud adoption rate in manufacturing is simply staggering. According to IDC, the biggest spender on public cloud services in 2018 was discrete manufacturing with nearly $20 billion. Process manufacturing also spent more than $10 billion. As cloud computing brings greater speed and accuracy to manufacturing operations, the numbers are expected to grow further.
20. 70% of the companies that offer financial services are still in the early stages of cloud adoption.
Financial services lag behind other sectors in this regard. Around 70% of organizations say their cloud projects are in the initial “trial and testing” stage.
Still, they already have clear strategies for the future in place. 60% of all businesses in the sector expect their IT environment to be multi-cloud, integrating both on-premises and externally hosted cloud infrastructure. Only 18% say they will solely rely on the public cloud.
Companies still expect to process most of their workload internally – using one or more private cloud solutions. Specialists also agree that a multi-cloud architecture will help with application performance (62%), meeting regulatory needs (43%) and reducing costs (40%).
Despite the seeming hesitancy in adopting the cloud, businesses in the financial services sector actually demonstrate higher cloud adoption rates compared to overall survey samples – for public IaaS (51% compared to 46%), on-premises private cloud (49% to 37%), and PaaS (39% to 31%).
Cloud Adoption in Different Countries
Cloud computing is penetrating the business world on a global scale. Let’s take a look at the cloud adoption statistics by country to see how this plays out in detail.
21. Only 2% of UK businesses have yet to utilize the cloud.
88% of UK businesses were using cloud services in 2018 (an increase from 85% in 2017). Further 10% were at the trial stage and only 2% weren’t using cloud computing in any way.
81% of respondents in this survey believe that the cloud will become even more prominent in the next year.
And it’s not only private entities who spend on cloud services. According to Statista, in 2018 the UK government spent approximately 650 million GBP on cloud computing services, provided by small and medium-sized enterprises.
22. Cloud Adoption in the EU is at just 26%.
EU as a whole is not yet a fan of cloud adoption. Only 26% of EU enterprises used cloud computing in 2018 – mostly for email hosting and file storage. However, 55% of those entities also used some of the more advanced cloud services. EU companies find the cloud a good place to run financial, accounting and CRM software.
In the EU, public cloud services get more attention (18%) than their private counterparts (11%). 68% of cloud users used these services for storing files, 48% find them a good place to host their database, while 53% reported using it for office software.
These numbers varied significantly across member-states. In Finland, Sweden, Denmark, the Netherlands, Ireland, the United Kingdom, and Belgium at least 40% of enterprises used cloud computing. On the other hand, only less than 10% of businesses relied on cloud services in Bulgaria and Romania.
23. Cloud adoption in Asia and the Pacific is showing great progress – only 10% of businesses are yet to appreciate its benefits.
(Source: 451 Research)
More than 90% of businesses in the region use, or plan to use a multi-cloud environment. 52% of those either plan to use a fully integrated hybrid environment – or they are using one already. This allows them to establish consistency in terms of security policy and reduce the total cost. Finally, it also gives them more agility in how they respond to changing requirements.
Over 50% of enterprises focus on migrating workloads from their internal environments when deploying into a public cloud. 28% are focused on a ‘lift and shift’ approach, while another 28% will undergo refactoring first. A slight majority of enterprises (55%) will use the help of a service provider to execute their hybrid cloud plans. They will rely on the provider either during the deployment and/or migration (21%), or to support the ongoing operations (35%).
The main concern in the process is security. 95% of enterprises think security is important to hybrid cloud decisions. 56% go even further and state it is critically important and a hard requirement.
Cloud computing forecasts point to one thing – the future of computing is indeed in the cloud.
Cloud services are convenient, fast, secure – and cheaper to boot. This makes their rise inevitable, as they have something to offer to businesses of all sizes. And not just businesses, as we already discovered.
This is all from us for today.
Hope you’ve enjoyed these cloud adoption statistics!
See you soon!