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Market Monitor Report: Cloud Market to Reach $20B by 2016

By Laura Stotler

The cloud computing market will soar to new heights over the next few years, according to a new report from Market Monitor. The new overview forecasts an overall market worth of nearly $20 billion by the end of 2016, with a 36 percent compound annual growth rate (CAGR), indicating sunny skies are ahead for cloud services.

The findings from Market Monitor, a service of 451 Research, specifically examine the market size and five-year growth rates for cloud-as-a-service. This includes infrastructure-as-a-service (Iaas), platform-as-a-service (PaaS) and software-as-a-service (SaaS).

The research also presents a competitive landscape for each of the categories, with revenue forecasts generated by 309 cloud service providers and technology vendors across 14 sectors. Findings include unique traits, and an analysis of the strengths and weaknesses of each participant.

IaaS dominated the total market revenue last year, accounting for more than half of the total public cloud market share and 37 percent CAGR through 2016, according to Market Monitor. The PaaS segment followed closely, at 24 percent of total public cloud revenues for 2012. And that layer is expected to grow quickest of all the segments with a 41-percent projected CAGR between 2012 and 2016.

Other report findings show the SaaS sector (excluding enterprise SaaS revenue), comprised 25 percent of total cloud revenues last year with an expected 29 percent CAGR through 2016. 

"Cloud computing is on the upswing and demand for public cloud services remains strong," said Yulitza Peraza, analyst, quantitative services, 451 Research and coauthor of the report. "However, public cloud adoption continues to face hurdles including security concerns, transparency and trust issues, workload readiness and internal non-IT-related organizational issues."

"Several vendors currently included in the cloud 'midmarket' are titans in their core IT sectors," said Greg Zwakman, research director, quantitative services, 451 Research. "It is still early days for the cloud divisions at these vendors, and running the same revenue distribution analysis against our 2016 forecasts paints a different picture."

ITEXPO Las Vegas is going on this week with several events and conference sessions focused on cloud computing and its numerous benefits. The "Cloud Computing 3.0 Unfurled" conference session takes place today at 11 a.m. PDT and will examine a new era of cloud computing based on automated, granular application workloads.

The "QoS in the Cloud: Your Revenue Guarantee" conference session is also on tap today, beginning at 2:45 p.m. PDT. The session, moderated by MSPToday's own Doug Barney, will examine best practices to ensure quality of service within the cloud, leading to revenue assurance.




Edited by Alisen Downey

MSPToday Contributing Editor

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