Industry research analyst company IDC announced on Tuesday it has released a new report that projects that worldwide spending on public IT cloud services will reach $47.4 billion in 2013 and is expected to be more than $107 billion in 2017.
Titled “Worldwide and Regional Public IT Cloud Services 2013-2017 Forecast”, the IDC study forecasts revenue for five functional categories of IT offerings delivered via the cloud services delivery/consumption model across eight geographic regions.
The report comes a few weeks after 451 Research service Market Monitor released its own Cloud as a Service Overview report that projected that cloud market revenue will increase at a 36 percent compound annual growth rate to reach nearly $20 billion at the end of 2016.
The report projects that over the 2013 to 2017 forecast period, public IT cloud services will have a compound annual growth rate of 23.5 percent. This translates to five times greater that of the IT industry as a whole.
As cloud services are shifting into a “Chapter Two” phase in which the scale of cloud adoption will grow significantly larger, only with a more user and solution driven approach.
In this next phase, cloud and the other third platform technologies, such as mobile, social, and Big Dat, will find themselves more interdependent as they continue to drive growth and innovation across all IT-dependent industries.
“The first wave of cloud services adoption was focused on improving the efficiency of the IT department,” said Frank Gens, senior vice president and chief analyst at IDC. “Over the next several years, the primary driver for cloud adoption will shift from economics to innovation as leading-edge companies invest in cloud services as the foundation for new competitive offerings. The emergence of cloud as the core for new ‘business as a service’ offerings will accelerate cloud adoption and dramatically raise the cloud model’s strategic value beyond CIOs to CXOs of all types.”
An expanding range of cloud deployment choices in crucial in driving growth in public IT cloud services spending, says IDC, as the growing richness of these options serves as an accelerator for overall cloud services adoption.
Virtual private cloud offerings have also greatly helped to make the move from dedicated private cloud services toward public cloud services, specifically by addressing the attributes of public cloud with some of the privacy and control features associated with private cloud.
The report also states that “growing commoditization and competition is expected to bring about consolidation in basic cloud services (infrastructure as a service offerings), and will force vendors to expand their offerings toward higher value services.”
As the competition expands the addressable market of solutions and customers, providers will be forced to scale their cloud services toward an even wider range of customers.
The growing focus on cloud services as a business innovation platform will help to drive spending on public IT cloud services to new levels throughout the forecast period.
By 2017, IDC say it expects public IT cloud services will drive 17 percent of IT product spending and nearly half of all growth across five technology categories, which include applications, system infrastructure software, platform as a service, servers, and basic storage.
Software as a service will remain the largest public IT cloud services category throughout this four year period, capturing 59.7 percent of revenues in 2017.
Meanwhile, PaaS and infrastructure as a service will be the fastest categories of growth, with CAGRs of 29.7 percent and 27.2 percent, respectively.
The United States will continue to be the largest public IT cloud services market, despite seeing a sharp decline from 56.9 percent in 2013 to 43.9 percent in 2017. In contrast, the Western Europe, Latin America, and Asia/Pacific markets will each gain share throughout the forecast.
Cloud spending in emerging markets is expected to experience a CAGR of 37.3 percent for the 2013 to 2017 period, which is nearly double the rate of developed markets.