Cloud spending to grow 20% this year, corner 10% of enterprise app market: Gartner

Gartner Inc, the World’s leading IT research firm, has revealed that cloud computing or Internet based software already accounts for 10% of the global enterprise market.

The service, known also known as Software as a Service or SaaS, requires the user to log into his or her application through the Internet and is located at a remote location, instead of his own office or computer.

It is currently the hottest software trend as large companies try to cut costs by having their software hosted on huge collections of servers in remote locations (cloud) along with those of other companies, giving economies of scale to the maintainers of these systems.

According to Gartner, global spending on software by enterprises (companies) is around $268 billion this year, out of which around $100 billion is spent on buying applications. Applications are the top-level software that are used by the end consumer, while other software lie beneath the applications and enable them to function.

Cloud (in the traditional sense) will account for $89 billion spending across the globe this year. Out of this, around $10 billion will be spent by companies to buy access into cloud-based applications or SaaS, Gartner said.

“.. at about $10 billion, software as a service (SaaS) already accounts for 10 percent of enterprise applications software spending, and by 2015 this share is expected to increase to close to 15 percent and to exceed $20 billion in annual spending,” said Richard Gordon, research vice president at Gartner.

Gartner is predicting overall spending on the Cloud (including applications and base layers) to grow at four times the pace at which IT grows (or at around 20-25% per year.) It will grow 20% this year and will reach $177 billion by 2015, it predicted.

Numbers related to how much is being spent on creating the Cloud infrastructure, how much of it is spent on core or base levels and how much is spent on the application levels are all very hard to come by, with the new numbers shedding some welcome light on the segment.

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