Thursday, October 19, 2017

IaaS, PaaS, SaaS to lead $390bn cloud economy

48 out of the world’s Fortune 50 companies are using or plan to use cloud services as those previously concerned about cloud environments start to invest heavily.

Global cloud IT market revenues are set to more than double by 2020 with both public and private cloud hardware, software and services set to generate $390bn in revenues by the end of this decade.

According to Bain & Company’s “The Changing Faces of the Cloud” report, market revenues accounted to ‘only’ $180bn in 2015 and are now set to grow at a compound annual growth rate (CAGR) of 17% until 2020.

Of the $390bn estimated cloud market, public cloud services are set to represent the largest part of the sector, with Software as a Service (SaaS) predicted to grow at a CAGR of 18%. Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) are tipped for a 27% CAGR.

Public cloud infrastructure and enabling services are predicted to increase at a 12% CAGR while private cloud services, including managed private clouds (MPC) and dedicated private clouds (DPC), are predicted to grow at a 25% CAGR.

The CAGR for private cloud infrastructure and enabling services has been set at 15%.

The drive behind such growth comes as the industry has seen a shift in the last five years from a state of mind where cloud was mostly seen as a tool for startups that posed more questions around security than the ones it answered.

Today, the market has matured and despite security remaining as a concern, most enterprises, either large or small, are using the cloud.

Bain points out that of the Fortune Global 50 companies, 48 have publicly announced cloud adoption plans, many of which use the cloud for a broad swath of their IT environments.


Where’s business coming from in 2017/18?

For the first time ever, ‘slow-and-steady’ customers will account for the largest share of cloud spending which is estimated to top $165bn in 2018.

“These customers, for a range of reasons, were not yet ready to adopt cloud computing in a meaningful way,” Bain explains.

Slow-and-steady customers will be followed by ‘safety-conscious’, ‘transformational, ‘heterogeneous’ and ‘price-conscious’ customers.

Analysts said: “The demand for cloud computing services has shifted from a small number of transformational customers to later adopters coming off the sidelines.

“More than ever, technology providers need to take a step back and re-evaluate whether they are set up for success in this next wave of cloud computing.”

Bain has also shared three advices for cloud providers. These include: invest to win big in a focused set of cloud battlegrounds, target the customer segments that best fit with your assets and capabilities, and  reassess your offers, go-to-market model, organisation and people, processes, incentives and systems for the next wave of cloud computing.