AWS and Azure have the most to gain from pandemic-driven IT spending. Cloud computing’s Top 2 Amazon Web Services (AWS), and Microsoft Azure are the biggest beneficiaries of the 2021 IT spending boom. This is due largely to the rise in remote workers in the COVID-19 pandemic. Flexera’s recent “State of Tech Spend Report”, which surveyed more than 470 organizations in North America and Europe with 2,000 to 10,000 employees, found that almost half (49%) expect to increase their IT-related spending in 2021, compared to 2020. One in 10 respondents expects that this increase will be “significant.” Nearly half (48%) of respondents consider cloud/cloud migration to be a top IT initiative. This is up from 40 percent in 2020. Unsurprisingly, 42 percent of organizations have been more open to the idea of moving to the cloud in the wake the pandemic. Respondents plan to allocate 30 percent of their budgets to IaaS/PaaS/SaaS, and only 24 percent to on-premises applications. The enthusiasm for public cloud is high for 2021. 71% of those surveyed expect to increase their public clouds spending by at least some amount this year. This will be a “significant” change for 29 percent. Flexera stated in its report that cloud promises to help businesses cut costs. Therefore, it is not surprising to see increased interest in cloud technologies. “Accelerating cloud migration makes it easier to work remotely. It helps offset the negative effects of revenue declines or budget cuts caused by the cost reductions that cloud can deliver. AWS and Microsoft are the top cloud vendors in the market. However, Microsoft has a significant advantage over AWS because, unlike cloud-only AWS, its offerings “touch virtually every aspect of the IT stack.” Flexera says. Nearly half (47%) of organizations spend more on Microsoft products than on AWS (22%). Flexera reports that AWS has seen significant growth since 2020 when 19% of respondents ranked it as the second or first largest vendor. AWS topped SAP by 34 percent this year and is now ahead of Oracle and Salesforce. A majority of organizations expect to increase their spending on Microsoft Azure cloud in 2021. 19% plan to make “significant” changes. AWS is close behind, with 54 percent of organizations planning to increase their spending on AWS to some degree, and 19 percent significantly. [Click on the image to see a larger version.] Source: Flexera. Other findings from the Flexera Report:

  • Over half (55%) of organizations intend to shut down their datacenters in the next two-years, with 7 percent aiming to completely eliminate them.
  • When asked to name their top three IT initiatives, most respondents replied “digital transformation” (56%), “cybersecurity”, (50%) and “cloud/cloudmigration” (48%).
  • The most popular (74%) pandemic-related impact on organizations was “Work from Home”.
  • 64 percent of IT spending is directed at “running the company,” while 36 percent are aimed at growth/innovation.

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