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Roundup Of Cloud Computing Forecasts, 2017

  • Cloud computing is projected to increase from $67B in 2015 to $162B in 2020 attaining a compound annual growth rate (CAGR) of 19%.
  • Gartner predicts the worldwide public cloud services market will grow 18% in 2017 to $246.8B, up from $209.2B in 2016.
  • 74% of Tech Chief Financial Officers (CFOs) say cloud computing will have the most measurable impact on their business in 2017.

Cloud platforms are enabling new, complex business models and orchestrating more globally-based integration networks in 2017 than many analyst and advisory firms predicted. Combined with Cloud Services adoption increasing in the mid-tier and small & medium businesses (SMB), leading researchers including Forrester are adjusting their forecasts upward. The best check of any forecast is revenue.  Amazon’s latest quarterly results released two days ago show Amazon Web Services (AWS) attained 43% year-over-year growth, contributing 10% of consolidated revenue and 89% of consolidated operating income.

Additional key takeaways from the roundup include the following:

  • Wikibon is predicting enterprise cloud spending is growing at a 16% compound annual growth (CAGR) run rate between 2016 and 2026. The research firm also predicts that by 2022, Amazon Web Services (AWS) will reach $43B in revenue, and be 8.2% of all cloud spending. Source: Wikibon report preview: How big can Amazon Web Services get?
Wikibon Worldwide Enterprise IT Projection By Vendor Revenue

Wikibon Worldwide Enterprise IT Projection By Vendor Revenue

Rapid Growth of Cloud Computing, 2015–2020

Rapid Growth of Cloud Computing, 2015–2020

Worldwide Public Cloud Services Forecast (Millions of Dollars)

Worldwide Public Cloud Services Forecast (Millions of Dollars)

  • By the end of 2018, spending on IT-as-a-Service for data centers, software and services will be $547B. Deloitte Global predicts that procurement of IT technologies will accelerate in the next 2.5 years from $361B to $547B. At this pace, IT-as-a-Service will represent more than half of IT spending by the 2021/2022 timeframe. Source: Deloitte Technology, Media and Telecommunications Predictions, 2017 (PDF, 80 pp., no opt-in).
Deloitte IT-as-a-Service Forecast

Deloitte IT-as-a-Service Forecast

  • Total spending on IT infrastructure products (server, enterprise storage, and Ethernet switches) for deployment in cloud environments will increase 15.3% year over year in 2017 to $41.7B. IDC predicts that public cloud data centers will account for the majority of this spending ( 60.5%) while off-premises private cloud environments will represent 14.9% of spending. On-premises private clouds will account for 62.3% of spending on private cloud IT infrastructure and will grow 13.1% year over year in 2017. Source: Spending on IT Infrastructure for Public Cloud Deployments Will Return to Double-Digit Growth in 2017, According to IDC.
Worldwide Cloud IT Infrastructure Market Forecast

Worldwide Cloud IT Infrastructure Market Forecast

  • Platform-as-a-Service (PaaS) adoption is predicted to be the fastest-growing sector of cloud platforms according to KPMG, growing from 32% in 2017 to 56% adoption in 2020. Results from the 2016 Harvey Nash / KPMG CIO Survey indicate that cloud adoption is now mainstream and accelerating as enterprises shift data-intensive operations to the cloud.  Source: Journey to the Cloud, The Creative CIO Agenda, KPMG (PDF, no opt-in, 14 pp.)
Cloud investment by type today and in three years

Cloud investment by type today and in three years

AWS Segment Financial Comparison

AWS Segment Financial Comparison

  • In Q1, 2017 AWS generated 10% of consolidated revenue and 89% of consolidated operating income. Net sales increased 23% to $35.7 billion in the first quarter, compared with $29.1 billion in first quarter 2016. Source: Cloud Business Drives Amazon’s Profits.
Comparing AWS' Revenue and Income Contributions

Comparing AWS’ Revenue and Income Contributions

  • RightScale’s 2017 survey found that Microsoft Azure adoption surged from 26% to 43% with AWS adoption increasing from 56% to 59%. Overall Azure adoption grew from 20% to 34% percent of respondents to reduce the AWS lead, with Azure now reaching 60% of the market penetration of AWS. Google also increased adoption from 10% to 15%. AWS continues to lead in public cloud adoption (57% of respondents currently run applications in AWS), this number has stayed flat since both 2016 and 2015. Source: RightScale 2017 State of the Cloud Report (PDF, 38 pp., no opt-in)
Public Cloud Adoption, 2017 versus 2016

Public Cloud Adoption, 2017 versus 2016

  • Global Cloud IT market revenue is predicted to increase from $180B in 2015 to $390B in 2020, attaining a Compound Annual Growth Rate (CAGR) of 17%. In the same period, SaaS-based apps are predicted to grow at an 18% CAGR, and IaaS/PaaS is predicted to increase at a 27% CAGR. Source: Bain & Company research brief The Changing Faces of the Cloud (PDF, no opt-in).
60% of IT Market Growth Is Being Driven By The Cloud

60% of IT Market Growth Is Being Driven By The Cloud

  • 74% of Tech Chief Financial Officers (CFOs) say cloud computing will have the most measurable impact on their business in 2017. Additional technologies that will have a significant financial impact in 2017 include the Internet of Things, Artificial Intelligence (AI) (16%) and 3D printing and virtual reality (14% each). Source: 2017 BDO Technology Outlook Survey (PDF), no opt-in).
CFOs say cloud investments deliver the greatest measurable impact

CFOs say cloud investments deliver the greatest measurable impact

Cloud investments are fueling new job throughout Canada

Cloud investments are fueling new job throughout Canada

  • APIs are enabling persona-based user experiences in a diverse base of cloud enterprise As of today there are 17,422 APIs listed on the Programmable Web, with many enterprise cloud apps concentrating on subscription, distributed order management, and pricing workflows.  Sources: Bessemer Venture Partners State of the Cloud 2017 and 2017 Is Quickly Becoming The Year Of The API Economy. The following graphic from the latest Bessemer Venture Partners report illustrates how APIs are now the background of enterprise software.
APIs are fueling a revolution in cloud enterprise apps

APIs are fueling a revolution in cloud enterprise apps

Additional Resources:

Five Ways CPQ Is Revolutionizing Selling Today

CPQ, Salesforce CPQ, enosiX SAP to Salesforce Integration Configure-Price-Quote (CPQ) continues to be one of the hottest enterprise apps today, fueled by the relentless need all companies have to increase sales while delivering customized orders profitably and accurately. Here are a few of the many results CPQ strategies are delivering today:

  • Companies relying on CPQ are growing profit margins at a 57% greater rate year-over-year compared to non-adopters.
  • 89% improvement in turning Special Pricing Requests (SPRs) into sales by automating them using a cloud-based CPQ system.
  • 67% reduction in reworked orders at a leading specialty vehicle manufacturer due to quotes reflecting exactly what customers wanted to buy.
  • 23% improvement in upsell and cross-sell revenue by having the CPQ system intelligently recommend the optimal product or service that has the highest probability of purchase and best possible gross margin.
  • CPQ strategies excel when they are designed to reach challenging selling, pricing, revenue and operational performance goals versus automating existing selling workflows.

Another factor fueling CPQs’ rapid growth is how quickly results of a pilot can be measured and used for launching a successful company-wide launch.  Pilots often concentrate on quote creation time, quoting accuracy, sales cycle reduction, automating Special Pricing Requests (SPRs), up-sells and cross-sells, perfect order performance, margin improvements and best of all, winning new customers. These are the baseline metrics many companies use to measure their CPQ performance. Throughout 2017 these metrics across industries are accelerating. There is a revolution going on in selling today.

5 Ways CPQ Is Revolutionizing Selling Today

Cloud- and SaaS-based CPQ solutions are quicker to implement, easier to customize to customers’ requirements, and available 24/7 on any Internet-enabled device, anytime. Many are designed to integrate into Salesforce, further accelerating adoption seamlessly.  The following five factors are the primary catalysts revolutionizing selling today:

  1. Designing in excellent user experiences (UX) is the new normal for CPQ apps – CPQ vendors are competing with the quality of user experiences they deliver in 2017, moving beyond packing every feature possible into app releases. This is having a corresponding impact on adoption, increasing the number of sales representatives and entire teams who can get up and running fast with a new CPQ app. The net result is reduced sales cycles, growing pipelines, and more sales reps actively using CPQ apps to increase their selling effectiveness.
  2. Integrating with legacy CRM, ERP and pricing systems in real-time are using service-oriented frameworks gives sales teams what they need to close deals faster – Legacy CPQ systems in the past often had very precise field mappings to 3rd party legacy CRM, ERP and pricing systems. They were brittle and would break very easily, slowing down sales cycles and making sales reps resort to manually-based approaches from decades before. In 2017 there are service-oriented frameworks that make brittle, easily broken mappings thankfully an integration practice in the past. With a loosely coupled service framework, real-time integration between CRM and ERP systems can be quickly be implemented and sales teams can get out and close more deals. Leaders in the area include enosiX, who are enabling their customers’ sales forces to enter sales orders into SAP directly from Salesforce, saving valuable selling time and increasing order accuracy.
  3. Competing for deals using Artificial Intelligence (AI), machine learning and Intelligent Agents are force multipliers driving greater salesSalesforce’s Einstein is an example of the latest generation of AI applications that are enabling sales reps and teams to gain insights that weren’t available before. Combining customer data with these advanced predictive data analytics technologies yields insights into how selling strategies for different accounts can customize to specific prospect needs. Selling strategies are more effective and focused when AI, machine learning, and Intelligent Agents are designed in to guide quoting, pricing and product configuration in real-time.
  4. CPQ apps optimized for mobile devices are enabling sales reps to drastically reduce quote creation times, sales cycles and increase sales win rates – For many companies whose sales teams are in the field calling on accounts the majority of the time, mobile-based CPQ apps are how they get the majority of their work done. Salesforce’s Force.com is one of the leading platforms CPQ software companies are relying on to create mobile apps, further capitalizing on the already-established levels of familiarity sales teams have with the Salesforce platform.
  5. The vision many companies have of synchronizing multichannel and omnichannel selling as part of their CPQ strategies is now attainable – One of the greatest challenges of expanding sales channels is ensuring a consistently high-quality customer experience across each. With on-premise CPQ, CRM and ERP selling systems, this is very challenging as there are often multiple database systems supporting each. This is a breakout year for omnichannel selling as cloud-based CPQ systems and the platforms they are built on can securely scale across all selling channels a company chooses to launch. Being able to track which CPQ deals emanated from which marketing program, and which channels are the most effective in closing sales is now possible.
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