Roundup of Cloud Computing Forecasts and Market Estimates, 2011
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During the last four months of 2010 the pace of published forecasts on cloud computing, IaaS, PaaS and SaaS forecasts quickened, yielding an eclectic and at times conflicting view of this emerging market. From the daily Google Alerts, RSS feeds, e-mail subscriptions and offers to buy research reports on cloud computing received, the pace is being matched by the variety of research being completed.
I did a quick review of the term “cloud computing” on Google Insights for Search, which produced the following graphic. Google Insights for Search is an excellent analytical tool, as it will render a forecast based on previous results and show geographic concentrations. Please click on the image to expand it for easier viewing.
Cloud Computing Was Gartner’s Most Popular Inquiry Topic Last Year
Gartner analyst Ben Pring sums it all up when he writes in the report, The Influence of Cloud in Outsourcing, 2010-2011 that cloud computing was the #1 area of inquiry for the advisory firm in 2010. The Google Insights analysis and the proliferation of reports underscore that point.
Before reviewing all these forecasts, it’s good to also take a look at the latest Gartner Hype Cycle for Cloud Computing, 2010. Back in October 2010, Intel started offering it on their website for free. You can get a copy of the Gartner Hype Cycle for Cloud Computing, 2010 by clicking here.
2011: When Cloud Computing Customer Results Became King
You can debate which area of the hype cycle the industry is on, yet after reviewing all these forecasts and projections the urgent need for real-world results is clear. As 2011 begins, any software company who has measurable results from customers, not just projections, of their cloud and SaaS-based strategies will be much further ahead of the mainstream.
Hopefully this year the research firms will cite more users than ever before an anchor these forecasts, as varied as they are, back to customer results. That said, the energy and intensity going into forecasting the cloud computing and SaaS markets is impressive.
Here is the roundup of cloud computing forecasts and predictions for 2011:
- Experton Group is forecasting that the German cloud computing market is forecast to grow from EUR 1.14 billion in 2010 to EUR 8.2 billion in 2015. This is equal to average annual growth of 48 percent. In 2015, cloud computing will account for around 10 percent of total IT expenditure in Germany. Around half of revenue in 2015 will be generated from cloud services, with a third coming from investment in cloud infrastructure, mainly data centres. The use of so-called ‘private clouds’ by businesses will account for EUR 2.6 billion in revenues by 2015, up from EUR 400 million in 2010. Source: http://professional.wsj.com/article/TPDMEUR00020101007e6a700061.html
- Gartner predicts worldwide software as a service (SaaS) revenue within the enterprise application software market is forecast to reach $9.2 billion in 2010, up 15.7 percent from 2009 revenue of $7.9 billion. The market is projected for stronger growth in 2011 with worldwide SaaS revenue totaling $10.7 billion, a 16.2 percent increase from 2010 revenue. These market forecasts are included in the report Forecast Analysis: Software as a Service, Worldwide, 2009-2014, Update.
- Gartner analysts write in the report Predicts 2011: New Relationships Will Change BI and Analytics, that by 2013, 33% of business intelligence functionality will be consumed via handheld devices, and 15% of BI deployments will combine BI, collaboration and social software into decision-making environments. By 2014, 30% of analytic applications will use in-memory functions to add scale and computational speed. In addition, 30% of analytic applications will use proactive, predictive and forecasting capabilities and 40% of spending on business analytics will go to system integrators, not software vendors. All of this is predicated on the security and scalability of cloud-based analytics.
Source: Predicts 2011: New Relationships Will Change BI and Analytics
- Gartner predicts in the report, Top Predictions for IT Organizations and Users, 2011 and Beyond: IT’s Growing Transparency that by 2015, 80% of enterprises using external cloud services will demand independent certification that providers can restore operations and data. Also by 2015, 20% of non-IT Global 500 companies will be cloud service providers. Companies will generate 50% of Web sales via their social presence and mobile applications according to Gartner in this same report.
Source: Top Predictions for IT Organizations and Users, 2011 and Beyond: IT’s Growing Transparency
- Infonetics Research is forecasting spending on security-related SaaS applications will experience a compound annual growth rate of 31% through 2014. Source: http://www.infonetics.com/pr/2010/CRS-Data-Center-Deployment-Survey-Highlights.asp
- International Data Corporation (IDC) expects the automated software quality (ASQ) and emerging testing as a service (TaaS) segments of the market to generate a 35.9% CAGR from 2009 – 2014 and $954 million in projected revenue in 2014.
Source: Worldwide Automated Software Quality Software as a Service and Testing as a Service 2010–2014 Forecast and 2009 Vendor Shares: Driving Cloud Quality http://www.idc.com/research/viewdocsynopsis.jsp?containerId=225003§ionId=null&elementId=null&pageType=SYNOPSIS
- TechMarketView predicts the value of the UK cloud computing market will more than double between now and 2014 from £2.4bn to £6.1bn according to the study UK Software and IT Services Market Forecast published in December by the firm.
- MarketsandMarkets.com in their report, Cloud Computing Market – Global Forecast (2010 -2015) predicts that the global cloud computing market is expected to grow from $37.8 billion in 2010 to $121.1 billion in 2015 at a CAGR of 26.2% from 2010 to 2015. SaaS is the largest contributor in the cloud computing services market, accounting for 73% of the market’s revenues 2010. Source: http://www.marketsandmarkets.com/Market-Reports/cloud-computing-234.html
- Market Intel Group has published the report, The Future of Virtualization, Cloud Computing and Green IT – Global Technologies & Markets Outlook – 2011-2016. In this report, they predict that the North American and European Virtualization Market Forecast are both going to grow by a healthy 8.5% CAGR over 2010 – 2016 period, creating aggregate markets of $123.8 Billion in North America and $94.7 Billion in Europe over the same period. Source: http://www.researchandmarkets.com/reportinfo.asp?report_id=1402312&t=d&cat_id=
- Pike Research has released the report, Cloud Computing Energy Efficiency which is one of the most ambitious to date in quantifying the sustainability advantages of cloud computing. The analysis states that the adoption of the cloud computing services will lead to a 38% reduction of the worldwide data center energy expenditures by 2010. Data center energy cost reductions will lower total data center energy costs from $23.3bn in 2010 to $16.0bn in 2020, and cause a 28% reduction in GHG emissions from 2010 levels is another key finding of the report. Source: http://energyefficiency.cleantechnology-business-review.com/news/cloud-computing-to-cut-38-of-data-center-energy-costs-by-2020-pike-research-071210
- Renub Research has made the following predictions in their latest report titled Cloud Computing – SaaS, PaaS, IaaS Market, Mobile Cloud Computing, M&A, Investments, and Future Forecast, Worldwide.Here are the key take-aways from the summary sent to me of the study:
- Worldwide Cloud Computing market is growing at a rapid rate and it is expected to cross $25 Billion by the end of 2013
- Renub predicts the Platform as a Service (PaaS) market size will reach US$ 400 Million by the year 2013
- Renub also predicts that Infrastructure as a Service (IaaS) market will increase at a CAGR value of 52.53% for the period spanning 2010 – 2013
- US Federal IT budget devoted to Cloud Computing Spending will reach nearly US$ 1 Billion by 2014
You can also find additional market forecasts in my post from July 19, 2010 titled Sizing the Cloud Computing Market and IDC Predicts SaaS Will Re-Order Software Landscape by 2012.
Happy New Year and I hope you find these links useful. I’ve been tracking this activity a while and thought this would be a good time to publish the list.
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Very nice compendium. Thanks!
Thank you for stopping by my blog. I find all these forecasts and sources of data fascinating. Thanks for the kind words too.
Have a good afternoon,
Thanks for sharing all this information. It was very helpful. Keep up the good job.
You might also want to look at ITCandor’s sizing of Cloud Computing at http://wp.me/PubL5-sg, We’ve published sizing and forecasts for the UK, Holland and Japan. We;ve also defined the subject clearly.
I believe I was also the first analyst to write about Cloud Computing when CRO of IDC Europe,
thanks for sharing this info.. was very helpful..
Most interesting. Next time you’re wondering how to use up some valuable time and the sun’s not shining, it would be great to see an update. The estimates I’ve been looking at just get wider and wider. I like to contrast Steve Ballmer’s comment that the industry has invested $3.3TN in Cloud with present estimates of the global revenue of (well, what?), assume say a 20% profit on those revenues and a 25% CAGR and see how long before ‘the industry’ gets its investment back.
Thanks for stopping by and also for your comment. It’s been a somewhat rainy winter here in California and I was able to put the time spent indoors to good use and do this update for 2012:
I suspect there will be more aggressive market forecasts from Microsoft in general and Steve Ballmer specifically during the coming week, when their Convergence Conference happens in Houston. All of those hyper-aggressive growth figures are meant to front-end load the value proposition of reselling their cloud applications, of course.
Yet in reality, to be profitable reselling cloud and SaaS-based apps it’s been my experience a CFO, CMO and CEO really have to know what they are doing. Cloud pricing and reselling are the black diamond slopes of enterprise software profitability analysis; experts only can make it down the slope without breaking something. I need to write more about the economics of cloud and SaaS, as I see a huge gulf in the ability of many companies to navigate these very difficult decisions and stay profitable as software businesses. The entire space, to me, is fascinating. Thanks for stopping by and have a good weekend!