Public Cloud To Enter Next Phase Of Growth

by CXOtoday News Desk    Apr 28, 2014

cloud growth

The public cloud computing market is set to enter the next phase of growth, according to a new Forrester report, which estimated that market is likely to reach a staggering $191 billion by 2020 from $58 billion in revenues in 2013.

The analyst firm states that strong growth and maturity over the past three years has and will continue to push this growth further ahead and recommends CIOs to start considering clouds as a core deployment option within their formal budgets.

“For CIOs, the shift has begun from exploration of cloud as a potential option, to rationalization of cloud services within the overall IT portfolio. And this shift to the second stage of technology adoption yields significantly higher market revenues than the exploratory phase,” said James Staten, senior analyst at Forrester in a blog post.

The Forrester report shows a chunk of the market’s revenues come from Software as a Service (SaaS) solutions which accounted for $36 billion in revenue in 2013, which is significantly more mature and well established in several application categories. According to the report, cloud platforms, led by Amazon Web Services, were only collectively $4.7 billion last year but are maturing quickly with traditional IT partners IBM, HP and Microsoft moving to the fore.

Some of the key findings of the study include:

SaaS will shift toward replacement of existing systems

According to the report, while SaaS has grown primarily in the form of new categories of applications that complement existing core, transactional solutions, in sales force automation, CRM, HRM and eProcurement, replacement of existing licensed software is fast happening. This trend will extend to other application categories, providing a next level for SaaS growth from 2014 through 2018.

Public cloud platforms will rival traditional infrastructure

The growth in use, maturity, and financial viability of public cloud platforms are proving their longstanding value as legitimate deployment options for enterprise applications. As the seismic shift in application portfolios progresses, public clouds will capture a significantly larger addressable market and this will prompt CIOs to start considering clouds as a core deployment option within their formal budgets.

Public cloud will rival traditional middleware

For applications and services built in an agile mode with modern architectures, discrete cloud services, such as database, storage, integration and other standalone cloud middleware components, will help companies maintain these components and reduce overall deployment footprint and cost, thereby maintaining pace with the changing desires of an empowered customer base.

“Despite the momentum, Forrester states that there remain legitimate concerns about the security of cloud solutions and consequently performance in certain markets and for certain use cases and data types,” explained Staten. However, he said that these will be overcome as there have been several examples in the recent past. The CIO will have to trigger an internal cultural and psychological change to take the cloud revolution to the next level of growth.