Public, Private Cloud Markets Set to Soar as Enterprise Adoption Grows

 
 
By Darryl K. Taft  |  Posted 2012-09-11
 
 
 

With enterprises continuing to adopt cloud computing, analysts see continued growth in both public and private cloud investment-with worldwide spending on public IT cloud services set to exceed $40 billion in 2012 and reach nearly $100 billion by 2016, according to IDC.

The research firm forecasts that from 2012 to 2016, public IT cloud services will see gains at a compound annual growth rate (CAGR) of 26.4 percent-five times that of the IT industry overall, as companies accelerate their shift to the cloud services model for IT consumption.

"The IT industry is in the midst of an important transformative period as companies invest in the technologies that will drive growth and innovation over the next two to three decades," Frank Gens, senior vice president and chief analyst at IDC, said in a statement. "By the end of the decade, IDC expects at least 80 percent of the industry's growth, and enterprises' highest-value leverage of IT, will be driven by cloud services and the other third-platform technologies."

By 2016, public IT cloud services will account for 16 percent of IT revenue in five key technology categories: applications, system infrastructure software, platform as a service (PaaS), servers and basic storage, IDC said. More significantly, cloud services will generate 41 percent of all growth in these categories by 2016.

Software as a service (SaaS) will claim the largest share of public IT cloud services spending over the next five years, but other categories-notably basic storage and platform as a service (PaaS), will show faster growth, IDC said. Accelerating PaaS rollouts over the next 12 to 18 months will be critical to maintaining strong cloud momentum, according to IDC.

Geographically, the United States will remain the largest public cloud services market, followed by Western Europe and the Asia-Pacific region (excluding Japan). But the fastest growth in public IT services spending will be in the emerging markets, which will see its collective share nearly double by 2016 when it will account for almost 30 percent of net-new public IT cloud services spending growth, IDC said in its study, Worldwide and Regional Public IT Cloud Services 2012-2016 Forecast.

IDC defines public IT cloud services as those offerings designed for, and commercially offered to, a largely unrestricted marketplace of potential users. The forecast does not include revenue from private cloud deployments, which are dedicated to a specific customer. While private clouds provide the customer with the ability to specify access limitations and the level of resource dedication beyond what is currently available in public cloud offerings, IDC's expectation is that public clouds will mature and eventually incorporate many of the capabilities-particularly security and availability-that  make private clouds an attractive option today.

Meanwhile, as the public cloud market will be seeing a CAGR of 26.4 percent through 2016, the private cloud market is expected to show a CAGR of 21.5 percent through 2015, according to research distributed by ReportLinker.com.

In the report from Renub Research entitled "Private Cloud Computing Market & Forecast to 2015: Worldwide Analysis," analysts said security is a big concern for enterprises that may be considering the use of public cloud. For such organizations, the private cloud represents an alternative with a tighter security model that would enable their IT managers to control the building, deployment and management of those privately owned, internal clouds.

The market for private cloud technology and integrated services is increasingly implemented by larger enterprises. Given the potential for significant cost savings, small and midsized organizations are also becoming early adopters of this technology, the report said. The emerging market for cloud services is being driven by continuing globalization, government edicts, consumer acceptance of technology and the growth of the extended enterprise.

Application virtualization tools is the leading segment in the private cloud with around 37 percent market share in 2011 followed by infrastructure virtualization and business purpose virtualization tools, the report said. The middleware virtualization tools segment is contributing a small fraction to the private cloud market, but it has very high potential to grow in the near future.

Moreover, in a further breakdown of private cloud application virtualization tools, infrastructure application is leading with a share of more than 50 percent in private cloud applications in 2011 and it is expected to continue to dominate through 2014. The IT infrastructure application is the second most popular private cloud-based application. And the application development and collaboration applications are the third and fourth most popular private cloud-based applications. In market sizing, the infrastructure application segment is expected to reach nearly $3 billion by 2014, the report said.

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