Roundup of Cloud Computing & Enterprise Software Market Estimates and Forecasts, 2013

When the CEO of a rust-belt manufacturer speaks of cloud computing as critical to his company’s business strategies for competing globally, it’s clear a fundamental shift is underway.

Nearly every manufacturing company I’ve spoken with in the last ninety days has a mobility roadmap and is also challenged to integrate existing ERP, pricing and fulfillment systems into next-generation selling platforms.

One of the most driven CEOs I’ve met in manufacturing implemented a cloud-based channel management, pricing, quoting and CRM system to manage direct sales and a large distributor network across several countries.  Manufacturers are bringing an entirely new level of pragmatism to cloud computing, quickly deflating its hype by pushing for results on the shop floor.

There’s also been an entirely new series of enterprise software and cloud computing forecasts and market estimates published.  I’ve summarized the key take-aways below:

• Enterprise sales of ERP systems will grow to $32.9B in 2016, attaining a 6.7% CAGR in the forecast period of 2011 to 2016.   CRM is projected to be an $18.6B global market by 2016, attaining a CAGR of 9.1% from 2011 to 2016.   The fastest growing category of enterprise software will be Web Conferencing and Team, growing at a 12.4% CAGR through the forecast period.  The following graphic compares 2011 actual sales and the latest forecast for 2016 by enterprise software product category.  Source:  Gartner’s Forecast Analysis: Enterprise Application Software, Worldwide, 2011-2016, 4Q12 Update Published: 31 January 2013

•  Enterprise application software spending will reach $158B by 2016, with 20.8% being spent on ERP systems, 13.4% for Office Suites and 11.7% on CRM.  The following table breaks out spending by category and CAGRs for 2011 – 2016.  Gartner is projecting that 38% of revenues in the forecast period will be from maintenance revenues, 17% from subscription payments.  Source:  Gartner’s Forecast Analysis: Enterprise Application Software, Worldwide, 2011-2016, 4Q12 Update Published: 31 January 2013

• Cisco is forecasting cloud spending in small and medium busineses (SMB) will reach $16B in 2015 growing from just under $5B in 2010.  The company has published two studies on SMB cloud adoption that are worth reading.   Source: SMB Public Cloud Adoption: Opening a Hidden Market Source: http://www.cisco.com/web/about/ac79/docs/sp/IBSG_RE_SMB-Public-Cloud-Adoption.pdf Sequel: http://www.cisco.com/web/about/ac79/docs/re/IBSG-RE_SMB_Cloud-Adoption_Sequel.pdf

•  SaaS and cloud-based business application services revenue will grow from $13.5 billion in 2011 to$32.8 billion in 2016, achieving a  five-year CAGR of 19.5%. Source:  Gartner’s Forecast Analysis: Enterprise Application Software, Worldwide, 2011-2016, 4Q12 Update Published: 31 January 2013

• By 2014, IT organizations in 30% of Global 1000 companies will broker (aggregate, integrate and customize) two or more cloud services for internal and external users, up from 5% today.   Source:  Predicts 2013: Cloud Computing Becomes an Integral Part of IT Published: 4 December 2012 ID:G00230929.

• In 2012, 36% of CRM applications in the CRM software market were delivered on software as a service (SaaS) infrastructure. Gartner forecasts that SaaS use will increase to 40% in 2013, and that the crossover point to more than 50% SaaS in the CRM market will be reached during 2016.  Source: Predicts 2013: CRM Goes More Cloud, Becomes an App, Has a New Leader and Changes Nam Published: 4 December 2012.

• SaaS-based CRM will grow three times as fast as on-premises solutions. The compound annual growth rate (CAGR) for all CRM software is forecast to be 9.1% from 2012 through 2016, and 15.4% for SaaS-delivered CRM during the same period. Source: Predicts 2013: CRM Goes More Cloud, Becomes an App, Has a New Leader and Changes Nam Published: 4 December 2012.

• Gartner predicts worldwide spending on Platform-as-a-Service (PaaS) will grow from $1.58B in 2013 to $3.05B in 2016, attaining a 17.9% CAGR.   Software-as-a-Service (SaaS) will grow from $19.8B in 2013 to $32.8B in 2016, attaining a 13.4% CAGR.  Infrastructure-as-a-Service (IaaS) will grow from $9B in 2013 to $24.2B in 2016, attaining a 28.02% CAGR.  Gartner’s latest public cloud computing forecast is provided below. . Source: Public Cloud Services End-User Spending by Segment for Region, 2010-2016 (Millions of Dollars)  Source: Gartner (December 2012)  Please click on the image to expand it for easier reading. 

 

•  In the latest Forrester Wave™: Enterprise Cloud Databases, Q4 2012, Microsoft, Amazon RDS, Amazon DynamoDB and Database.com were ranked market leaders.   Source and free downloadable reprint, courtesy of Microsoft:  The Forrester Wave™: Enterprise Cloud Databases, Q4 2012

• IDC is predicting Cloud Services and enablement spending will hit $60 billion, growing at 26% through the year and that over 80% of new apps will be distributed and deployed on cloud platforms.  Their predictions also are saying that 2.5% of legacy packaged enterprise apps will start migrating to clouds.  Source: Top 10 Predictions, IDC Predictions 2012: Competing for 2020 by Frank Gens. You can download a copy of the IDC Predictions here: http://cdn.idc.com/research/Predictions12/Main/downloads/IDCTOP10Predictions2012.pdf