Why Forrester’s Latest Cloud Spending Predictions Will Be Outpaced Again

New data from Forrester, first published by Bloomberg Businessweek, finds spending on cloud-computing services, software and related resources will reach $191 billion by 2020, putting the market on track to outpace earlier expectations by about 20%. Businesses are expected to spend $14 billion more on cloud systems and services in 2014 than in the previous year.

This “hypergrowth” comes as more businesses replace on-premises software licenses from legacy providers like Microsoft with subscription-based SaaS alternatives like Google Apps and Salesforce.com. Adding to this spending is the reluctance by many businesses to build out their own in-house data centers. Instead, more companies are embracing public cloud solutions like those offered by Google Compute Engine and Amazon Web Services.

A Move Completely to the Cloud is Inevitable

Despite astronomical growth in the cloud sector, Forrester adds that, “while the public cloud is growing quickly, it will never totally replace in-house computing resources.” Adding, “Companies want to continue to run applications that are unique to them on their own equipment, and there is some older software that isn’t worth the cost of updating.”

While it’s true that larger business will likely always rely in part on some proprietary software, it’s shortsighted to believe that these enterprises will fail to realize the advantages and cost savings a complete move to the cloud can provide. The benefits of migrating or replicating proprietary systems in the cloud, either with the help of an experienced cloud services brokerage or through in-house development, will be too large to ignore in the near future.

If Forrester’s latest study fails to take into account the inevitable move completely to the cloud, perhaps these latest spending predictions will be outpaced yet again.