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Cloud spending on the rise

According to a recent report published by the International Data Corporation (IDC), cloud spending represented nearly 30% of overall IT infrastructure spend during Q1 2015, rising from 26.4% during Q1 2014.

The market research firm found that vendor sales of private and public cloud infrastructure – including storage, servers and Ethernet switches – grew by a staggering 25.1% year-on-year during Q1 to reach almost $6.3bn (£4.02bn), CRN news reports.

Private cloud spending grew 24.4% to $2.4bn during Q1, while public cloud spending increased by 25.5% to $3.9bn. Kuba Stolarski, research manager of server, virtualization and workload research at IDC said the rise in cloud spending suggests that “customers are open to a broad array of hybrid deployment scenarios as they modernise their IT for the third platform, begin to deploy next-generation software solutions, and embrace modern management processes that enable agile, flexible, and extensible cloud platforms.”

In its Worldwide Quarterly Cloud Infrastructure Tracker report, IDC predicts that overall cloud infrastructure spend will rise by 26.4% this year, reaching £33.4bn and representing one third of overall IT spend. In particular, public cloud spend will grow by 32.2% year-on-year to $21.7bn, while private cloud spend will increase by 16.8% to $11.7bn.

IDC forecasts that cloud spending will rocket over the next five years and will account for nearly half (46.5%) of all IT infrastructure spending by 2019, reaching $54.5bn.

Meanwhile, according to Computerworld’s annual forecast survey, 43% of firms plan to increase their overall IT budgets this year, by an average of 13%. A total of 194 IT professionals were polled for the survey, with 40% stating that cloud computing will take the lion’s share of their budget increase, closely followed by software as a service (SaaS).

Cloud computing was rated as the most important consideration among IT departments this year, cited by 16%. Firms which have already adopted cloud strategies will this year seek to streamline services and improve functionality in order to reap the full benefits of the cloud.

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UK’s Tech Businesses Set To Soar

2015 is predicted to see an increase in IT equipment finance, as UK tech businesses expect to grow four times quicker than Gross Domestic Product (GDP), according to an article on the Asset Finance International website.

Members from the Finance & Leasing Association (FLA) reported 5% growth in IT equipment finance during 2014, taking the total to £1.624 billion. During the final quarter of last year, however, the pace picked up significantly: a total £570 million of IT equipment was financed, which is a 25% increase compared with the same period in 2013. It is expected that this growth will continue throughout this year and beyond.

Meanwhile, Barclays’ Fast Growth Tech survey revealed that UK tech businesses are expecting solid growth this year. After polling CEOs and owners of tech firms, the results revealed that the average company predicts 11% growth during 2015 – four times the GDP prediction for this year (2.6%).

Over half (58%) of firms expect growth of up to 10% this year, while 18% predict growth of between 10% and 20%, and 9% predict notable growth of more than 20%.

IT firms remain optimistic about the state of their business, with many expecting growth beyond 2015. The average company in the survey expects additional growth of 15% in 2016, while 16% predict growth of over 20%.

Sean Duffy, managing director of Barclays’ Technology, Media and Telecoms division, said that the growth predictions “reveal the optimism and drive of the UK’s work-leading technology sector,” before adding that the UK is a “real launch pad for innovative tech businesses.”

“Investors are seeing the UK as an international talent magnet and a platform to grow or launch their business for a number of compelling reasons, including the culture, light-touch regulation, supportive Government policies and access to finance,” he added.

When asked the reasons behind previous growth, 79% of companies cited strong leadership. Going forward, those companies saw strong leadership and a focus on marketing and advertising as both critical factors for growth.

According to the companies, the two main challenges that could impede growth are increased competition (29%) and the ability to attract and retain talented employees (25%).