Spending on cloud services made up most of the growth in the UK public sector technology market last financial year (FY) – despite it staying “effectively flat” with a small growth of just 1.8%.
New data from research firm GlobalData’s latest market sizing for the UK public sector ICT market shows that £20.1bn was spent in the 2021-22 FY.
“Spending on cloud has swelled the most, we saw that grow by around 29% in the last financial year compared to the year before,” Robert Stoneman, service director for public sector at GlobalData, said in a recent podcast from the firm.
“We have also seen spending on services and IT staff grow around 10% each compared to the previous year as well.”
It wasn’t all growth last year however, as Stoneman explained that some areas like telecom services and hardware saw a decline of around 10% and 5% respectively.
“Some of this makes sense considering the existing spending priorities of public sector organisations,” Stoneman added, “there is a general shift moving things towards the cloud.”
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Covid19’s impact on the market was “fairly subtle”
The challenges faced by the pandemic could have had an impact on the market, but Stoneman said the impact it had would have been a “fairly subtle” one.
Stoneman explained: “A lot of that is down to the fact that, whereas private businesses might have some real big problems due to people [being] unable to go outside or buy certain services, public services had to continue.”
The pandemic also “didn’t really make a massive difference” to spending, according to Stoneman. However, some areas like notebooks and on premises servers saw highs in FY 2021 – but that has reportedly returned to normal since the pandemic has died down.
“The annual growth rate for the last five years has been around 1.6%, [and] we anticipate that’s going to continue at the moment,” Stoneman said.
Something to be aware of over the next five years is a potential change in government at sometime late 2024/2025.
“Generally, when it comes to public sector organisations’s spend in IT it’s related to what their general funding is,” Stoneman said.
GlobalData is the parent company of Verdict and its sister publication.