In a ZDNET article today, a group of the world’s largest suppliers of on-premises and cloud software signalled alarm bells for the decline of on-premises server-based IT investment. The group, including Microsoft, IBM, SAP, Oracle, and Intel, have all seen significant downturn in on-premises investments and an accelerated pursuit of cloud solutions.
In explaining what has happened in IT spending, the article says:
“It has been clear for a while that traditional IT spending was going to go cloud first. The COVID-19 pandemic accelerated that shift. Today, CIOs are tasked with digital transformation, supporting a decentralized workforce and being agile and data driven enough to satisfy customers anywhere. Licensing software and buying data center [sic] gear with three-year time horizons just doesn’t add up.”
Christian Klein, CEO of SAP, said:
“… For our on-premises business, we have seen significant investment delays in 2020 in several hard-hit industries and across all industries and geographies, we see an increasing demand to accelerate the move to the cloud.”
While the companies in question are all huge enterprises themselves, supplying the largest enterprises in the world, their concerns are felt widely and reach even the smallest parts of the business community.
The article goes on to say “the risky CIO move is spending the IT budget on-premises. Simply put, no one is going to be fired for going to the cloud”.
Our own view on the shift to cloud mirrors this scenario, except we saw the shift beginning long before Covid forced people’s hands. The need to accommodate a work-from-anywhere workforce is critical to functioning effectively in uncertainty. It also means you don’t have the risk and overhead of expensive hardware and support services, and ensures you retain your key staff and attract the best in the future. Cloud software is the solution and it’s time to act if you haven’t already.
Total Synergy CEO, Scott Osborne, said we are seeing smaller, more agile businesses moving to cloud software extremely quickly.
“Work-from-anywhere is different to work-from-home,” he said.
“Working from anywhere is about being untethered and it often involves using multiple cloud applications together. We’re seeing lots of our Synergy customers connect Synergy to other software like SharePoint, CRM, accounting software, business intelligence, and specialist, industry-specific apps — it’s a group of complementary cloud products working together wherever the user wants or needs to be.
“Couple that with the reduced total cost of ownership and the only surprise is how long it’s taken many businesses to realise these benefits.”
The ZDNET article concludes with commentary from IDC, a technology and business analyst firm:
“Through 2023, coping with technical debt accumulated during the pandemic will shadow 70% of CIOs, causing financial stress, inertial drag on IT agility, and ‘forced march’ migrations to the cloud.”
Read the full article here: On-premise IT spending showing cracks as cloud first, digital transformation rules