Roundup of Cloud Computing Forecasts Update, 2013

by Louis Columbus on November 24, 2013

Time-to-market, more flexible support for business strategies by IT, and faster response time to competitive conditions are combining to accelerate cloud computing adoption today.

Of the enterprises I’ve spoken with over the last several months including several Fortune 500 corporations to small businesses just beginning to evaluate cloud-based CRM and manufacturing systems, one message resonates from all of them: they need enterprise applications that keep pace with how fast they want to move on new business strategies. The latest round of cloud computing forecasts reflect the urgency enterprises have of making IT a foundation for strategic business growth.

The following is a summary of the latest cloud computing forecasts and market estimates:

Gartner predicts that the bulk of new IT spending by 2016 will be for cloud computing platforms and applications with nearly half of large enterprises having cloud deployments by the end of 2017. Source: Gartner Says Cloud Computing Will Become the Bulk of New IT Spend by 2016.

The worldwide cloud-based security services market will be worth $2.1B in 2013, rising to $3.1B in 2015, according to Gartner. Source: Gartner Says Cloud-Based Security Services Market to Reach $2.1 Billion in 2013.

McKinsey & Company’s report Disruptive technologies: Advances that will transform life, business, and the global economy projects that the total economic impact of cloud technology could be $1.7 trillion to $6.2 trillion annually in 2025. Of this total, $1.2 trillion to $5.5 trillion could be in the form of surplus from use of cloud-enabled Internet services, while $500 billion to $700 billion could come through productivity improvements for enterprise IT. The following graphic from the study summarizes the results. Source in PDF form: Disruptive technologies: Advances that will transform life, business, and the global economy.

IDC predicts public IT cloud services will reach $47.4B in 2013 and is expected to be more than $107B in 2017. Over the 2013–2017 forecast period, public IT cloud services will have a compound annual growth rate (CAGR) of 23.5%, five times that of the IT industry as a whole. 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 expects public IT cloud services will drive 17% of IT product spending and nearly half of all growth across five technology categories: applications, system infrastructure software, platform as a service (PaaS), servers, and basic storage. Software as a service (SaaS) will remain the largest public IT cloud services category throughout the forecast, capturing 59.7% of revenues in 2017. The fastest growing categories will be PaaS and Infrastructure as a service (IaaS), with CAGRs of 29.7% and 27.2%, respectively. Source: IDC Forecasts Worldwide Public IT Cloud Services Spending to Reach Nearly $108 Billion by 2017 as Focus Shifts from Savings to Innovation.

IDC Forecast Public IT Spending

Informatica’s presentation titled Enable Rapid Innovation with Informatica and MicroStrategy for Hybrid IT by Darren Cunningham, Informatica Cloud and Roger Nolan, Informatica Data Integration and Data Quality contains a useful series of cloud market overviews supported by 451 Research Gartner, Forrester and IDC data. A summary of the statistics section is shown below:

KPMG’s latest study of cloud adoption, The cloud takes shape Global cloud survey: the implementation challenge shows 70% of respondent organizations believe that cloud computing is delivering operating efficiencies and cost savings today. The report also predicts cloud-enabled services adoption by functional area, and is shown below. Source: The cloud takes shape Global cloud survey: the implementation challenge.

Gartner predicts that in the next five years enterprises will spend $921B on public cloud services, attaining a CAGR of 17% in the forecast period. Darryl Carlton, Research Director, APAC with Gartner recently presented Cloud Computing 2014: Cloud Computing 2014: ready for real business? His presentation is full of insightful analysis and market forecasts from Gartner, with specific focus on Asia-Pacific.

Visiongain predicts the Platform-as-a-Service (PaaS) submarket is valued at $1.9B in 2013 growing to $3.7B in 2018, attaining a 14.3% CAGR for the period 2013-2018. The following figure shows the firm’s forecast. Source: Visiongain on Slideshare.

Gartner predicts that in the next five years enterprises will spend $921B on public cloud services, attaining a CAGR of 17% in the forecast period. Darryl Carlton, Research Director, APAC with Gartner recently presented Cloud Computing 2014: Cloud Computing 2014: ready for real business? His presentation is full of insightful analysis and market forecasts from Gartner, with specific focus on Asia-Pacific.

Visiongain predicts the Platform-as-a-Service (PaaS) submarket is valued at $1.9B in 2013 growing to $3.7B in 2018, attaining a 14.3% CAGR for the period 2013-2018. The following figure shows the firm’s forecast. Source: Visiongain on Slideshare.

IDC predicts the global cloud services market is $9.6B in 2013, attaining a five year 24.8% CAGR through 2018. A free downloadable copy of IDCs latest MarketScape for Worldwide Cloud Professional Services report as available at the link here. Source: IDC MarketScape: Worldwide Cloud Professional Services 2013 Vendor Analysis.

Boston Consulting Group writes that SaaS is a $15B market, growing at three times that rate of traditional software. BCG estimates that SaaS is 12% of global spending on IT applications. BCG interviewed 80 CIOs and found they were willing to consider SaaS solutions for 35% to 60% of their application spending. BCG also evaluated how the economics of cloud software adoption vary for on-premises versus SaaS customers. The following two charts from the completed study. Source: (Free, opt-in required) Profiting from the Cloud: How to Master Software as a Service