Skip to main content

Cloud IaaS Service Revenue will Reach $43.6 Billion

Cloud computing services have experienced consistent growth over the last decade. Savvy IT vendors that transformed their portfolio have reaped the benefits of their strategic foresight. Others are still reacting to the diminished demand for their legacy product offerings.

Many CIOs now consider public cloud infrastructure as a service (IaaS) as a viable alternative to their on-premises IT infrastructure. A recent survey of over 6,000 IT organizations found that nearly two thirds of the respondents are either already using or planning to use public cloud IaaS by the end of 2016.

According to their latest worldwide market study, International Data Corporation (IDC) forecasts public cloud IaaS revenues to more than triple from $12.6 billion in 2015 to $43.6 billion in 2020 -- with a compound annual growth rate (CAGR) of 28.2 percent over the five-year forecast period.

Public IaaS Market Development Trends

"Public cloud services are increasingly being seen as an enabler of business agility and speed," said Deepak Mohan, research director at IDC. "This is bringing about a shift in IT infrastructure spending, with implications for the incumbent leaders in enterprise infrastructure technologies."

IDC believes growth of public cloud IaaS has also created new service opportunities around adoption and usage of public cloud resources. That being said, with changes at the infrastructure, architectural, and operational layers, public cloud IaaS is slowly transforming the enterprise IT value chain.

The public cloud IaaS market grew 51 percent in 2015. IDC expects this high growth to continue through 2016 and 2017 with a CAGR of more than 41 percent. However, the growth rate is expected to slow after 2017 as enterprises shift from cloud exploration to cloud optimization.

Furthermore, alternatives such as managed private cloud will grow in maturity and availability, providing IT organizations with more options as they plan their infrastructure evolution to support digital transformation projects.

Demand for Hybrid Cloud Infrastructure

Large enterprise leaders seek a flexible and adaptive business technology environment, therefore hybrid solutions that mix their existing on-premises IT infrastructure with public cloud infrastructure represents the optimal configuration.

In fact, hybrid cloud infrastructure adoption is already a common practice at many large enterprises across the globe, and IDC now predicts that 80 percent of IT organizations will be committed to embrace hybrid architectures by 2018.

Moreover, the dominance of the leading cloud service providers is expected to continue throughout the forecast period, as economies of scale and continued investment drive the cycle of adoption and growth.

Popular posts from this blog

How Savvy Pioneers Lead the Future of Work

Hybrid and fully remote work are inevitable in the Global Networked Economy where high-performance talent demands flexibility from employers. To enable these progressive work models, organizations are investing in a wide range of technologies to support more agile types of employment.  According to the latest worldwide market study by International Data Corporation (IDC), leading organizations will spend nearly $1 billion on the Future of Work (FoW) in 2023 -- that's an increase of 18.8 percent over 2022. Future of Work Market Development "Work models continue to evolve, but 37 percent of decision-makers in a recent global survey note that Remote and Hybrid work models will be an embedded part of accepted work practices, supported by a continued shift to the cloud, increasingly instrumented and interconnected physical workplaces, and intelligent digital workspaces," said Holly Muscolino, group vice president at IDC . According to the IDC assessment, organizations must mak

Human Resource Transformation Enabled by IT

Many senior executives are taking a proactive approach to digital business transformation in order to achieve their strategic goals. Delivering revenue growth and profitability is now imperative for every function, including Human Resources (HR). The top 3 priority HR technologies this year are skills management, learning experience platforms, and internal talent marketplaces, according to the latest worldwide market study by Gartner. "With a tumultuous global economy, HR technology leaders face a balancing act in 2023," said Sam Grinter, director at Gartner . "Leaders must anticipate greater levels of accountability and demand for measurable outcomes to justify new technology investments." HR Transformation Market Development Forty-four percent of HR leaders report driving better business outcomes is their number one strategic priority for HR technology transformation over the next three years. Growth in headcount and skills (26 percent) and cost optimization (17 p

Virtual Reality Market Set to Reach $100 Billion

Virtual Reality (VR) market growth is now finally coming to fruition. Thanks to current actions and market momentum, VR is approaching what can be considered critical mass. And, not a moment too soon. This growth momentum comes from new hardware and content releases, accelerating enterprise value recognition, and a significant metaverse wild card that could potentially lift adoption and usage. According to the latest worldwide market study by ABI Research, over 85 million VR Head Mounted Displays (HMDs) will be shipped in 2027 across consumer and enterprise segments, creating a $100 billion VR market that includes hardware, software, and services. Virtual Reality Market Development "Expectations have been high in VR for years, and even decades, without notable growth to show. That growth is finally coming over the next five years," said Eric Abbruzzese, research director at ABI Research . The barrier to entry is lower than ever, all while content performance and user experien