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Application Container Revenue will Reach $2.7B by 2020

Data center server virtualization and cloud computing requirements are evolving. More CIOs and IT managers will be deploying Linux container based solutions in 2017, as the market matures and the vendors gain new momentum with their go-to-market strategies.

The market will grow from $762 million in 2016 to $2.7 billion by 2020, according to the latest worldwide market study by 451 Research. Despite making up a relatively small portion of the overall Cloud-Enabling Technologies (CET) market, application containers will  experience a CAGR of 40 percent through 2020.

The entire CET market  -- which includes virtualization, containers, Private PaaS, and other automation and management software -- is estimated to be worth approximately $23.1 billion in 2017. It is expected to grow at a 15 percent CAGR to $39.6 billion at year-end 2020.


Application Container Market Development

The application container market can be compared to the OpenStack market. But based on the number of vendors currently participating, containers may have a broader impact on the market than OpenStack, which was valued at $1.8 billionn in 2016 and is expected to grow to $5.8 billion at a CAGR of 35 percent by year-end 2020.

Put simply, Linux containers are viewed as highly impactful technology by IT buyers. Moreover, 451 Research analysts believe enterprise adoption of containers and market maturity appears to be happening more rapidly than OpenStack and other adjacent trends, such as cloud PaaS and DevOps.

"Two things stand out from our market sizing and research on containers: the breadth and diversity of vendors basing their offerings on containers or integrating and partnering to better support containers in their products, and the speed at which the container software and market are maturing based on production, use and revenue growth," said Greg Zwakman, vice president at 451 Research.

451 Research has identified and currently tracks 125 application container vendors -- and they expect new market entrants to emerge quarterly, including many yet to be identified as open source container providers.

Although it is still early days, 451 Research finds increased movement beyond early development and testing to the production use of containers. That said, during 2015 there was significant growth of container applications in production among the enterprises that were surveyed.

Outlook for Linux Container Adoption

The trend continued in a survey of enterprise IT buyers conducted in April and May 2016. Of the 25 percent of those enterprises surveyed who use containers, 34 percent were in broad implementation of production applications, and a further 28 percent had already begun initial implementation. The future is bright for new market growth, with associated vendor merger and acquisition (M&A) activity.

Enterprise interest and the presence of a large number of vendors in the market indicate a continuing high level of M&A through 2017 across several market segments -- including management and orchestration, monitoring, security, continuous integration and/or continuous deployment.

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