Thursday, November 23, 2017

Cloud nets $148bn in 2016

Barriers to cloud adoption branded as a thing from the past as 2016 gets labelled as the year when cloud dominated IT market segments.

The rapid adoption of cloud services worldwide has driven the market to grow 25% year-on-year and to reach $148bn in operator and vendor revenues.

Of the highest growing services, IaaS and PaaS registered the biggest growth rate at 53%, followed by hosted private cloud infrastructure services at 35% and enterprise SaaS at 34%.

According to Synergy Research Group, “2016 was notable as the year in which spend on cloud services overtook spend on cloud infrastructure hardware and software”.

The think tank says that aggregate cloud service markets are now growing three times more quickly than cloud infrastructure hardware and software.

cloud-2016AWS, Microsoft, HPE, Cisco, IBM, Salesforce and Dell EMC feature as the main market segment leaders for the year 2016.

Synergy has also unveiled that between Q4 2015 and Q3 2016 the total spend on hardware and software to build cloud infrastructure exceeded $65bn, with spend on private clouds accounting for over half of the total but spend on public cloud growing much more rapidly.

Cloud service providers generate almost $30bn in revenues from cloud infrastructure services (IaaS, PaaS, hosted private cloud services) and over $40bn from enterprise SaaS due to capital expenditures on infrastructure.

The revenues are in addition to supporting internet services such as search, social networking, email and e-commerce.

The research firm has also highlighted that despite being a different type of market, Unified Communications as a Service (UCaaS) is also growing steadily and driving some radical changes in business communications.

Synergy Research Group’s founder and Chief Analyst Jeremy Duke, said: “We tagged 2015 as the year when cloud became mainstream and I would say that 2016 is the year that cloud started to dominate many IT market segments.

“Major barriers to cloud adoption are now almost a thing of the past, especially on the public cloud side.

“Cloud technologies are now generating massive revenues for technology vendors and cloud service providers and yet there are still many years of strong growth ahead.”