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Exploring the Evolution of Cloud 2.0 Market Scenarios

Most industry analysts agree, cloud computing applications have gained new momentum in the global networked economy because they serve a purpose that Line of Business leaders demand -- enabling the rapid deployment of compelling business models that are made possible via the adoption of digital transformation.

According to the latest worldwide market assessment by Technology Business Research (TBR), 2016 will mark a turning point in cloud computing adoption. Moreover, the market won't be dominated -- in market share or in the minds of customers -- by IT vendors delivering only stand-alone public cloud services.

Customer ability, skill and desire to use public, private and hybrid cloud options will accelerate the adoption of more complex, heterogeneous and integrated cloud computing use cases. This changing customer behavior, combined with mature services from IT vendors, will result in a 'Cloud 2.0' scenarios during 2016.

TBR believes that progressive CIOs already see value in the public, private and hybrid cloud service options, but they often encounter significant organizational obstacles to adoption. However, the combination of pre-sales consulting and cloud managed services will enable more customers to overcome these hurdles.

Summary of TBR Cloud Market Predictions for 2016

A major trend in 2015 was vendors exiting the public cloud space and partnering to deliver value around the large public cloud offerings from Amazon Web Services, Microsoft and Google.

Public cloud service provider M&A will continue in 2016. Vendors exiting the public cloud space will focus on enabling and supporting broader hybrid IT and digital transformation capabilities. Those that focus on how the technology can improve business efficiency will likely be most successful.

The number of public cloud IaaS vendors will shrink in 2016, but their presence in the global market will expand. Vendors such as Alibaba and smaller European providers will likely capitalize on more country-specific data sovereignty regulations.

Pure-play public cloud vendors -- such as Salesforce.com -- are winning in North America, but they face more competition abroad with more traditional and local IT vendors. As a result, they may have to expand their delivery ecosystem with local channel partners.

The public cloud computing market will continue to expand. With nearly all types of business including cloud initiatives in their planning, and the growing levels of cloud knowledge, TBR expects growth to remain steady at about 20 percent year-to-year for the next few years.

New growth will be driven by CIOs leveraging public cloud for a growing number of workloads within large companies. Startups have used cloud services for a decade, but one enterprise customer's cloud spend is often equivalent to the demand from numerous startups.

The hosted private cloud market is key to the overall cloud landscape, but growth will continue to be somewhat muted. Despite some of the largest traditional IT companies focusing on private options for cloud delivery, TBR doesn't expect any of them to control more than 10 percent of the market in 2016.

IBM is clearly the largest hosted private cloud vendor, but to date no single vendor can claim a clear leadership position. From an enterprise customer perspective, CIOs are struggling to figure out the right use cases for private cloud, and then select the right solutions that are based on their particular requirements.

TBR concludes that the growth in hosted private cloud will be generated by a combination of cloud service providers, systems integrators and more localized IT industry players. Collectively, they provide cloud infrastructure with the consulting, guidance and value-add services that will enable customers to achieve their desired business outcomes.

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