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    Public Cloud Services Market Expected to Grow

    Written by

    Nathan Eddy
    Published July 8, 2014
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      The worldwide public cloud services market reached a size of $45.7 billion in 2013, and the market is expected to grow at a compound annual growth rate (CAGR) of 23 percent until 2018, according to a report from IT research firm IDC.

      In IDC’s software taxonomy, the total public cloud services market comprises three major product groups: software as a service (SaaS), infrastructure as a service (IaaS) and platform as a service (PaaS).

      On a regional basis, the United States holds almost 68 percent of the market, which is much more than what it holds for traditional technologies.

      Western Europe holds 19 percent, and the other six regions IDC tracks hold 5 percent or less each.

      However, IDC forecasts that by 2018, the U.S. share will drop to 59 percent, while the Western European share will grow to 23 percent; emerging regions are also expected to grow above worldwide average.

      “We are at a pivotal time in the battle for leadership and innovation in the cloud. IDC’s Public Cloud Services Tracker shows very rapid growth in customer cloud service spending across 19 product categories and within eight geographic regions,” Frank Gens, senior vice president and chief analyst at IDC, said in a statement. “Not coincidentally, we see vendors introducing many new cloud offerings and slashing cloud pricing in order to capture market share. Market share leadership will certainly be up for grabs over the next 2-3 years.”

      SaaS accounts for 72 percent of the total public cloud services market and is forecast to grow at a 20 percent CAGR over the forecast period.

      This market segment is dominated by enterprise application cloud solutions, including enterprise resource management (ERM) and customer relationship management (CRM).

      Comprising two major segments, server and basic storage, IaaS drove $3.6 billion in 2013 spending and is projected to grow at a 31 percent CAGR through 2018.

      The top vendors in the IaaS market are Amazon, which holds the first position with more than 40 percent of market share, Rackspace, IBM, CenturyLink and Microsoft.

      Finally, the PaaS market, composed of a wide variety of highly strategic cloud app development, deployment and management services, accounted for 14 percent of the public cloud services market in 2013 with a forecast CAGR of 27 percent.

      From a market share standpoint, the 2013 PaaS market was also led by Amazon, followed by Salesforce.com and Microsoft, which are both tied for second place in market share, while GXS and Google hold the fourth and fifth positions.

      The report also noted that in 2013 and this year, PaaS spending has been largely driven by integration and process automation solutions, data management solutions, and application server middleware services.

      Nathan Eddy
      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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