Cloud Migration Is Back (If You Ignore the Actual Numbers)

The cloud migration narrative that powered tech valuations during the pandemic is attempting a comeback, but the underlying data suggests a more complex story.

UBS’s new survey of IT services reveals a striking disconnect between industry expectations and customer reality. While executives proclaim “2025 will be far better than what we’ve seen in 2024,” their enterprise clients report having migrated merely 15% of workloads to the cloud, with the remainder presenting increasingly complex challenges.

The numbers are particularly telling: Growth rates for major cloud providers AWS, Azure, and Google Cloud have declined from pandemic peaks of 40-50% to 10-20%. IT budgets for 2024, meanwhile, are projected to be “flattish to up very slightly, maybe a couple percent,” marking a significant departure from the explosive growth of recent years.

The industry is maintaining its optimistic stance, nonetheless, with partners highlighting “massive SAP deals coming through the pipeline.” Yet their own measure of customer sentiment around cloud spending registers just “6/6.5 out of 10,” suggesting a marked gap between aspiration and execution.

The digital transformation narratives of the pandemic era have given way to more measured discussions of “gradual” recoveries. As one enterprise client observed: “It’s like squeezing a lemon, it only gets harder to get more out over time.” The remaining migrations involve resource-intensive applications and mission-critical systems, requiring substantially more investment and planning than earlier projects.

For Indian IT services companies, this presents a strategic challenge. While positioned to benefit from renewed cloud migration activity, they face a more demanding environment than during the pandemic surge, when simpler lift-and-shift operations dominated the dynamics.