Public Cloud Services to Hit $208.6B in Revenue by Year-End: Gartner

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By the end of 2016 the public cloud services market will reach $208.6 billion in revenue, up 17.2 percent from $178 billion in 2015, Gartner said this week. Cost savings and benefits to innovation and agility are causes for public cloud adoption, but Gartner notes that IT modernization is the top driver of growth.

IaaS is projected to grow by 42.8 percent, while SaaS will grow by 21.7 percent to $38.9 billion.

“Growth of public cloud is supported by the fact that organizations are saving 14 percent of their budgets as an outcome of public cloud adoption, according to Gartner’s 2015 cloud adoption survey,” said Sid Nag, research director at Gartner. “However, the aspiration for using cloud services outpaces actual adoption. There’s no question there is great appetite within organizations to use cloud services, but there are still challenges for organizations as they make the move to the cloud. Even with the high rate of predicted growth, a large number of organizations still have no current plans to use cloud services.”

SEE ALSO: Not So Fast: Microsoft Azure Could Surpass AWS as Most Used Public Cloud by 2019

Among those adopting public cloud, the focus on building an environment to support future applications and digital business processes is a sign of developing sophistication and strategy in public cloud service use. Despite a strong track record of security and increased provider transparency, Gartner says security and privacy concerns are still the top barrier to adoption.

“More education is needed to help organizations overcome the hype associated with security concerns,” said Gartner research vice president Ed Anderson. “This should be a key area of focus for providers in working with their clients to unlock the benefits of public cloud services.”

Gartner also projects private cloud and hosted private cloud services to increase through 2017, at least. Most organizations already use multiple services from multiple cloud providers, and Gartner sees multi-cloud environments increasing the needs and challenges associated with hybrid scenarios.

An IDC report released in August forecasts only $96.5 billion in public cloud services spending for 2016, rising to $195 billion by 2020. Synergy Research Group said last year that IT companies’ quarterly revenue from public cloud was nearly $22 billion.

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  1. For those who are taking public cloud in account , the aim should be on building an environment to bear future applications and business processes. It is a mark of developing sophistication and strategy in public cloud service use.