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Public cloud services set to reach $200bn in 2016

29/01/2016 by Sharon Shahzad


New research from analyst firm Gartner has forecast values for the global public cloud services sector to reach $200bn (£139bn) during 2016. As the world becomes increasing mobile, the general public and business organisations are turning to the cloud in increasing numbers; now, Gartner expects that the market will rise through cloud advertising, software-as-a-service (SaaS) and other business models, with values growing to around £142.8bn by the end of the year.

The vast majority of cloud revenues are expected to come via cloud advertising; in fact, Gartner has suggested this market could see 13.6 per cent growth over the coming 12 months, with the sector’s value rising to $90.3bn. The analyst organisation also believes that business process as a service (BPaaS), although seeing low growth of just 8.7 per cent, will still contribute around $42.6bn to the market. This will occur as companies increasing look to outsource services sourced from the cloud.

Gartner also revealed that it expects SaaS to continue taking the dominant share of primary markets, with growth continuing at its 20.3 per cent year-on-year pace and a value of $37.7bn for 2016; however, it won’t be the fastest growing sector, with infrastructure-as-a-service (IaaS) overtaking as 38.4 per cent growth is experienced and a value of $22.4bn is seen. $4.6bn will be contributed by cloud application infrastructure services, with growth of 21.1 per cent.

Sig Nag, research director for Gartner, said: “IaaS continues to be the strongest growing segment as enterprises move away from data centre build-outs and move their infrastructure needs to the public cloud. Certain market leaders have built a significant lead in this segment, so providers should focus on creating differentiation for success.”

The major market places continue to be those that have dominated previously. In July 2015, Amazon Web Services (AWS), IBM, Google and Microsoft drew more than half of the entire global market. A more up-to-date comment from Synergy Research’s chief analyst and research director, John Dinsdale, explained: “While there is still a place for small- to medium-sized public cloud players, the public cloud really is dominated by hyperscale cloud operators that can afford to build huge data centre footprints that span multiple continents.”

In the same note, Mr Dinsdale revealed that significant inroads into the IT market continue to be made by the public cloud market; in fact, over $20bn every quarter is now generated for IT firms by public cloud operations.

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