Report: Cloud income progress far outpaces on-premises


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Battery Ventures’ State of the OpenCloud 2022 report examines the panorama of cloud infrastructure and open-source software program and presents operational greatest practices for cloud corporations.

Cloud giants like Amazon Net Companies (AWS), Microsoft Azure and Google Cloud have demonstrated vital progress sturdiness — and profitability — at large scale, regardless of the present macroeconomic surroundings. Billion-dollar companies like Databricks (a Battery portfolio firm) and Snowflake are constructed on prime of those large cloud distributors, and there may be vital room to develop, as digital transformation accelerates throughout industries and extra workloads shift to the cloud.

Heavy cloud progress

Throughout 4 main infrastructure-software corporations (MongoDB, Confluent, Elastic and Splunk), cloud income CAGR was at the very least 72% and as a lot as 200% from 2018 to 2022. On-premises CAGR, in contrast, ranged from 4% to 55%.

Total, Battery predicts cloud spend at the moment represents about 25% of the $919 billion general enterprise IT market spend in 2022, a proportion that may little doubt improve within the months and years to return given the potential for market disruption. Amid rising strain to enhance productiveness and effectivity and a high-inflation surroundings, Battery predicts we’ll see a step-change improve in cloud adoption throughout each trade and economic system.


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Picture supply: Battery Ventures

“Many cloud corporations are demonstrating sturdy progress and even profitability because the broader IT market stays comparatively under-penetrated by cloud; there’s nonetheless loads of room to develop,” mentioned Danel Dayan, Battery vice chairman and one of many report’s authors.

“Whereas it stays to be seen what is going to occur within the subsequent few months within the expertise trade, given the market downturn, we’re assured that the cloud, and open-source software program, will quickly rework industries in methods we’ve got by no means seen earlier than,” Dayan added.


The Battery Ventures 2022 OpenCloud report depends upon publicly obtainable information from Gartner, Pitchbook, the U.S. Bureau of Labor Statistics, CapIQ and firm earnings reviews. (Battery’s investments and exits are listed right here.)

Learn the full report from Battery Ventures.

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