Worldwide spending on hosted private cloud services will exceed $24 billion in 2016

Hosted Private Cloud Spending to Reach $24B in 2016: IDC Report

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Worldwide spending on hosted private cloud services will exceed $24 billion in 2016, according to a new report from International Data Corporation released on Thursday.

According to the report, Worldwide Hosted Private Cloud Services 2012-2016 Forecast: New Models for Delivering Infrastructure Services, hosted private cloud spending will experience a compound annual growth rate of more than 50 percent between 2012 and 2016.

Hosted private cloud has two private cloud services deployment models, IDC says, which offer customers and service providers different choices about resource dedication, tenancy cost, user access/control of assets and security structures. The two deployment models are dedicated private cloud and virtual private cloud.

Dedicated private cloud offers dedicated 1:1 physical compute and storage resources, which offer the greatest customer control over resources. Examples of this model include Amazon EC2 Dedicated Instances, IBM SmartCloud Enterprise and Rackspace Cloud: Private Edition.

Recently, Rackspace was named a top performer by Forrester Research in its report, “The Forrester Wave: Hosted Private Cloud Q1 2013.” Last year, Rackspace enhanced its support offering around its hosted private cloud.

Virtual private cloud is a model that combines public cloud services with shared virtualized resources and a variety of customer control and security options different from most public cloud services. Examples of the virtual private cloud model include Amazon VPC, IBM SmartCloud Enterprise Plus and Rackspace RackConnect.

IDC expects virtual private cloud to grow steadily because of its similarity to public cloud, and many IT buyers already use IaaS.

When dedicated private cloud grows, IDC expects the winners to be providers building single-vendor stacks. Alternatively, if virtual private cloud becomes the dominant provider-based model as it expects, it will mean a “vastly different set of vendors” will benefit.

“Not even the largest technology incumbents can sustain IT market leadership without achieving leadership in cloud services. Quite simply, vendor failure in cloud services will mean stagnation,” Robert Mahowald, research vice president, SaaS and Cloud Services said in a statement. “Vendors need to be doing everything they can – today – to develop a full range of competitive cloud offerings and operating models optimized around those offerings.”

Talk back: Are you prepared for the growing demand of dedicated private cloud or virtual private cloud services? What do you think of the new IDC research on hosted private cloud spending? Let us know in a comment.

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