451 Research service Market Monitor projects that revenue from the cloud-enabling technologies market will increase at a 21 percent compound annual growth rate (CAGR) to $22.6 billion in 2016.
The Market Monitor Cloud-Enabling Technologies overview report defines cloud-enabling technologies as “technologies that are installed, delivered and consumed on-premises.” The report examined 143 vendors divided into categories of virtualization, security, and automation and management.
Virtualization accounts for the largest share of market revenue, at 66 percent. However it is the lowest CAGR category, with only 16 percent growth expected, because it is “the most mature market segment.”
In the automation and management and security categories, growth rates are expected to be 28 and 29 percent, respectively.
“The drivers of growth are twofold,” Victoria Simons, Research Analyst at 451 Research said. “Initial adoption of the cloud is driven by the need for cost reduction and more efficient computing options. As the infrastructure is virtualized, customers then need tools to manage, control and secure their IT environments to fully realize the benefits of virtual/cloud environments. We see the cloud-enabling technologies market growing strongly as large enterprises and SMBs continue along the path of flexible computing.”
The report also notes that there have been 12 significant acquisitions in the past year, and predicts a continuation of this trend. IBM has acquired a trio of cloud-enabling companies in 2013 Q3, capped off by its purchase of CSL International.
Public companies accounted for 21 percent of the total companies in the cloud-enabling technologies field, yet earned 87 percent of the total revenue.
Despite this good news for the largest companies, the total number of companies generating less than $5 million fell from 58 percent in 2011 to only 44 percent in 2012, as the midmarket ($5 million – $25 million) grew from 27 to 32 percent of companies.
The report’s findings fit with the results of a MarketsandMarkets report released in August, which suggested the government cloud market alone will be worth $18.48 billion by 2018.