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Friday, December 13, 2019

As Cloud Service Adoption Matures, Expectations Rise

Has the public cloud computing services market matured to the point of saturation? The most current market research data seems to indicate that growth may be slowing across the globe. Regardless, demand is not focused on technology, instead, it's all about the anticipated business outcomes.

While line of business (LoB) leaders typically drive demand for cloud service adoption, it's the enterprise CTO and CIO that must manage the cloud computing and storage procurement process. Meanwhile, numerous vendors and service providers are now competing for new cloud customers.

Public Cloud Market Development

The worldwide public cloud services market is forecast to grow 17 percent in 2020 to total $266.4 billion -- that's up from $227.8 billion in 2019, according to the latest market study by Gartner.

"At this point, cloud adoption is mainstream," said Sid Nag, research vice president at Gartner. "The expectations of the outcomes associated with cloud investments, therefore, are also higher."

The adoption of next-generation solutions is almost always ‘cloud-enhanced’ solutions, meaning they build on the strengths of a cloud platform to deliver anticipated digital transformation capabilities.

Software as a service (SaaS) will remain the largest market segment, which is forecast to grow to $116 billion next year due to the scalability of subscription-based software.

The second-largest market segment is cloud system infrastructure services, or infrastructure as a service (IaaS), which will reach $50 billion in 2020.


IaaS is forecast to grow 24 percent year-over-year, which is the highest growth rate across all market segments. This growth is attributed to supporting the demands of modern application development and the associated workloads.

Various forms of cloud computing are among the top three areas where most global CIOs will increase their investment next year, according to Gartner.

As organizations increase their reliance on cloud technologies, IT teams will embrace cloud-built apps and relocate existing digital assets. Building, implementing and maturing cloud strategies will continue to be a top priority.

Outlook for Public Cloud Applications Growth

"The cloud managed service landscape is becoming increasingly sophisticated and competitive. In fact, by 2022, up to 60 percent of organizations will use an external service provider’s cloud managed service offering, which is double the percentage of organizations from 2018," said Mr. Nag.

Cloud-native capabilities, application services, multicloud and hybrid cloud comprise a diverse and complex cloud ecosystem that will be important differentiators for technology product managers.

According to the Gartner assessment, demand for strategic cloud service outcomes signals an organizational shift toward digital business outcomes. However, the key challenge will be sourcing the skilled and experienced talent that can translate cloud service technology into tangible business benefits.