Skip to main content

Worldwide Public Cloud Market Reaches $208.6 Billion

Cloud computing application demand is growing, but challenges remain. According to the latest market study by Gartner, the worldwide public cloud computing market is projected to grow 17.2 percent in 2016 to reach $208.6 billion -- that's up from $178 billion in 2015.

The highest growth will come from cloud system infrastructure services (IaaS), which are projected to grow 42.8 percent in 2016. Cloud application services (SaaS), one of the largest segments in the global cloud services market, is forecast to grow 21.7 percent during 2016 to reach $38.9 billion.

Growth of public cloud is partly because organizations are saving 14 percent of their IT budgets as an outcome of public cloud adoption. However, the typical CIO aspiration for using cloud services outpaces actual adoption.

Ongoing Market Development Challenges

Gartner believes that while many organizations have assessed the need for cloud services, they resist the change. In fact, a large number of organizations still have no current plans to use any cloud services.

IT modernization is currently the top driver of public cloud adoption, followed by cost savings, innovation, agility and other benefits. The focus on IT modernization indicates a more sophisticated and strategic use of public cloud services.

According to the Gartner assessment, public cloud services are being used to recognize the tactical benefits of IT cost savings, and they are also being used to establish a more strategic IT environment -- i.e. one that can serve as a foundation for digital business transformation.

That being said, security and/or privacy concerns continue to be the top inhibitors to public cloud adoption -- despite the strong security track record and increased transparency of leading public cloud service providers.

More education is needed to help organizations overcome their perceived security concerns. This should be a key area of focus for IT infrastructure vendors and cloud service providers that offer professional guidance.

Hybrid Cloud and Multi-Cloud Brokerage

Most organizations use a combination of cloud services from different providers. While public cloud usage will continue to increase, the use of private cloud and hosted private cloud services will also increase through 2017.

The use of multiple public cloud providers, plus growth in various types of private cloud services, will create a multi-cloud environment in most enterprises and a need to coordinate cloud usage using hybrid cloud platforms.

Although these hybrid cloud scenarios will dominate, Gartner says adoption of Hybrid IT is a work in progress. Many organizations need vendor guidance on their 'systems of record' integration challenges, application incompatibilities, a perceived lack of management tools and a lack of common APIs.

"Of course in the case of hybrid cloud, these top concerns also highlight some of the top opportunities for providers," said Ed Anderson, research vice president at Gartner. "Therefore, vendors must focus on the top challenges to be successful in meeting the growing demand for hybrid cloud solutions."

Popular posts from this blog

Why Healthcare and Smart City Apps Drive 5G IoT

Fifth-generation (5G) wireless technology for cellular networks is a successor to fourth-generation (4G) wireless technology. By 2023, Juniper Research anticipates that there will be over 1 billion 5G connections globally. The technology will provide the data infrastructure for the advancement of wireless communications and for new developments in the Internet of Things (IoT) -- including smart cities and healthcare. 5G IoT Market Development According to the latest worldwide market study by Juniper Research, 5G IoT connections will reach 116 million globally by 2026 -- that's increasing from just 17 million connections in 2023. Juniper analysts predict that the healthcare sector applications and government or other smart city services will drive this outstanding 1,100 percent growth over the next three years. Juniper examined 5G adoption across key industry sectors -- such as the automotive, mobile broadband, and smart homes -- and forecasts healthcare and smart cities will accoun

How Savvy Leaders Re-Imagine Work in 2023

As we look to the year ahead, there will be significant challenges and opportunities facing the Chief Human Resource Officer (CHRO) role. In order to be successful, savvy HR leaders must be prepared to take proactive steps that adapt and evolve. "HR leaders have faced an increasingly unpredictable environment amid many organizations mandating a return to office, permanently higher turnover and burnt out employees," said Emily Rose McRae, senior director at Gartner . HR Innovation Market Development One of Gartner's key predictions for 2023 is that the use of artificial intelligence (AI) and automation will continue to increase within the enlightened digital workplace. This transition will require HR leaders to develop new skills and competencies in order to effectively manage and lead teams that are increasingly relying on these enabling technologies. Additionally, HR leaders will need to ensure that their organizations are investing in the necessary infrastructure and re

Top 10 CFO Priorities Require Rethinking Finance

The Chief Financial Officer (CFO) role is essential to digital business growth. While CFOs do not get closely involved in the tactical details of the digital transformation of their functions, they still recognize its strategic importance. According to the latest survey by Gartner, CFOs are faced with the challenge of balancing the need for substantive digital business innovation with financial cost control and risk management. "CFOs will be stretched thinly across many activities in 2023. The survey revealed a wide range of actions CFOs plan to either lead or be significantly involved with," said Marko Horvat, vice president at Gartner. Survey Findings: The Top Ten Priorities Cost Optimization - Cost reduction remains the top priority for CFOs as they look for ways to cut costs and improve efficiency in their operations. This includes identifying cost-saving opportunities through automation, outsourcing, and business process improvement. Business Continuity - The global C