Cloud Services Market to Top $109B in 2012: Gartner

Led by strong growth in infrastructure as a service (IaaS) and software as a service (SaaS), the cloud services market could reach $109 billion in 2012, Gartner said.

The worldwide cloud services market shows no sign of slowing down, with IT research firm Gartner forecasting public cloud services to grow 19.6 percent in 2012 to total $109 billion, led by strong gains in the business process services (also known as business process as a service, or BPaaS), which represent 77 percent of the market and is forecast to grow to $84.2 billion in 2012, up from $72 billion in 2011. Another major contributor to cloud growth is infrastructure as a service (IaaS), which the Gartner report predicted would grow 45.4 percent in 2012.

Cloud advertising, which Gartner classifies as a subset of BPaaS, will continue to account for about 47 percent of total public cloud services spending, according to the report, while the software as a service (SaaS) market is expected to grow to $14.4 billion in 2012. The IaaS market, which was less than one-third the size of the SaaS market two years ago, is expected to almost equal the SaaS market in 2016. The cloud management and security services segment is forecast to grow to $3.3 billion in 2012, while growth in application infrastructure services (also known as platform as a service, or PaaS) is also forecast to be strong, reaching $1.2 billion in 2012.

"The total public cloud services market size in 2011 was $91.4 billion, and it will grow to $206.6 billion in 2016. As the market grows, IaaS will become a larger part of the overall market, while the market share of cloud management and security services will grow as well," Ed Anderson, research director at Gartner, said in a press statement. "When targeting specific markets within the cloud services marketplace, we recommend evaluating both potential market size and growth rates. These will vary by segment, subsegment, region and country."

With 61 percent of all growth from 2010 through 2016, North America is expected to lead all other regions in growth in the cloud services market, while Western Europe, still in the midst of a wide-reaching debt crisis, is forecast to grow the slowest. Gartner said it expects the highest regional growth rates in the emerging Asia-Pacific region (including India and Indonesia), greater China, Eurasia (including Russia) and Latin America (including Argentina, Mexico and Brazil). However, the report noted ongoing economic challenges in the Japanese market would temper overall growth in the Asia-Pacific region.

"The cloud services market is clearly a high-growth sector within the overall IT marketplace," Anderson continued. "The key to taking advantage of this growth will be understanding the nuances of the opportunity within service segments and geographic regions, and then prioritizing investments in line with the opportunities."