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    Home Cloud
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    Private Cloud Market to Reach $69 Billion by 2018

    By
    Nathan Eddy
    -
    July 3, 2014
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      cloud spending forecast

      The preference for third party delivered, or managed, private cloud will increase over the next two years as hybrid integration, increased complexity of clouds and security concerns challenge enterprise IT skills and capabilities, according to a report from Technology Business Research (TBR).

      This migration is expected to result in customers using a systems integrator or private cloud vendor to save time and reduce costs—overall the $41 billion private cloud market in 2014 will grow at a 14 percent compound annual growth rate (CAGR) to $69 billion vendor opportunity by 2018.

      The report, which identifies leaders and laggards and opportunities for buyers and providers in the private cloud market, also guides vendors toward building strategic go-to-market plans.

      The company’s analysts offer a critical view of the opportunities in private cloud, both self-built and third-party delivered, examining the landscape through a business-centric lens and highlighting customer buying behavior.

      “Though they top the leaderboards, IBM, Microsoft and HP—vendors with broad cloud portfolios—have lower satisfaction scores than those with more focused portfolios like Cisco,” Cassandra Mooshian, a TBR cloud analyst, said in a statement. “Trying to be all things to all people deters customers that want those tailored and specialized solutions; think of Walmart versus a grocery store.”

      The study found the split between adoption of self-built and third-party-delivered private cloud has held steady at 30 percent and 70 percent, in 2013 and 2014.

      “As private cloud matures, growth is entering a different phase that is driven more by the flexibility and ease of management than by just security or cost savings,” Allan Krans, TBR cloud practice manager and principal analyst, said in a statement. “The skills gap in implementing, migrating and managing private cloud is driving customers to seek vendors that deliver clear and end-to-end migration road maps.”

      The report suggested one thing that has not changed for cloud is that security remains top of mind for private cloud adopters.

      Vendors with continually advancing security offerings and expertise will find ongoing success in the private cloud space, as 59 percent of respondents pegged security as a top concern and/or pain point around adopting cloud technology, and 19 percent indicated they would hire a third party to help mitigate their security concerns.

      The cloud-based security services market will be worth $2.1 billion in 2013, rising to $3.1 billion in 2015, and the top three most sought-after cloud services moving forward will remain email security, Web security services and identity and access management (IAM), according to a recent report from IT research firm Gartner.

      Gartner expects acceptance of, and reliance on, cloud-based security-as-a-service offerings to increase, based on organizations gaining more experience with SaaS and more consumer-grade technology being made available to corporate systems as a result of trends, such as bring your own device (BYOD).

      Nathan Eddy
      A graduate of Northwestern University's Medill School of Journalism, Nathan was perviously the editor of gaming industry newsletter FierceGameBiz and has written for various consumer and tech publications including Popular Mechanics, Popular Science, CRN, and The Times of London. Currently based in Berlin, he released his first documentary film, The Absent Column, in 2013.

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