Public cloud market set to double in four years

The latest cloud market report from Synergy Research Group shows that revenue from cloud services now far exceed cloud infrastructure hardware and software revenues.

Synergy predicts that the cloud market will double in size over the next four years, but the rate of growth will slow down.

The Synergy half-yearly review reported that $150bn was spent on cloud services and infrastructure, with cloud services growing more rapidly than the infrastructure market.

Synergy said cloud revenues for the first half of 2019 passed the $150bn mark, increasing by 24% compared with the first half of 2018.

The half-yearly review found that in the cloud service segments, IaaS and PaaS (infrastructure-as-a-service and platform-as-a-service) had the highest growth rate at 44%, followed by enterprise SaaS (software-as-a-service) at 27%, UCaaS (unified communications-as-a-service) at 23% and hosted private cloud infrastructure services at 20%.

According to Synergy, spending on hardware and software for public, private and hybrid infrastructure grew by just over 10%, while cloud provider spending on colocation and datacentre leasing increased by 17%.

The report identified Microsoft, Amazon/AWS, Dell EMC, Cisco, HPE and Google as the market leaders in cloud services. Other major players include Salesforce, Adobe, VMware, IBM, Digital Realty, Equinix and Rackspace.

“Cloud-associated markets are growing at rates ranging from 10% to well over 40% and annual spending on cloud will double in under four years,” said John Dinsdale, a chief analyst at Synergy Research Group. “Cloud is increasingly dominating the IT landscape.”

Dinsdale added: “Cloud has opened up a range of opportunities for new market entrants and for disruptive technologies and business models. Amazon and Microsoft have led the charge in terms of driving changes and aggressively growing cloud revenue streams, but many other tech companies are also benefiting.

“The flipside is that some traditional IT players are having a hard time balancing protection of legacy businesses with the need to fully embrace cloud.”

According to Synergy, infrastructure investments of $55bn by cloud service providers helped them to generate more than $90bn in revenues from cloud infrastructure services (IaaS, PaaS, hosted private cloud services) and enterprise SaaS. The new infrastructure also supported revenue from internet services such as search, social networking, email, e-commerce, gaming and mobile apps.

As Computer Weekly has reported previously, CIOs see public cloud computing and IaaS, PaaS and SaaS services provided by the major cloud companies very much as a strategic part of their company’s enterprise IT roadmap, and many are embarking on a cloud native approach to developing new systems.

According to a recent global survey of 800 CIOs from Vanson Bourne for Dynatrace, organisations are already using, or are planning to deploy, microservices (88%), containers (86%), serverless computing (85%), PaaS (89%), SaaS (94%), IaaS (91%) and private cloud (95%) in the next 12 months.

But IT departments recognise the risk of being locked into one provider’s public cloud services. AWS, Azure and Google Cloud Engine all offer compelling PaaS offerings to make their cloud unique, but tying applications too closely to these PaaS services and platforms leads to lock-in.

This can be limited, as one cloud manager told Computer Weekly, by documenting and isolating the parts of the application that rely on the PaaS. If it is necessary to change cloud providers at a future date, then the organisation only has to develop workarounds for the code that uses the PaaS application programming interfaces.