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Revenue in Infrastructure as a Service sector expected to surge

15/07/2016 by Usha Tyagi


Over the past few years, the adoption of cloud computing services has rocketed, boosting many markets and seeing revenue levels rise. Now, it has been suggested that Infrastructure as a Service (IaaS) is expected to be in high demand, with revenue levels expected to triple by 2020. This is occurring as many firms begin to understand the benefits of the cloud and move towards a hybrid strategy.

In its latest report, market intelligence firm IDC said that it expects to continue seeing the adoption of cloud services by enterprises around the world. As firms step away from traditional on-premise hardware they will need to utilise IaaS in increasing levels. There’s also a compelling argument from IaaS providers, since having an architecture subscription allows scalable and on-demand services. It also means money can be saved from the operation costs of running independent, private data silos.

Revealing its findings and the expected trends, IDC said that revenue for the IaaS market was $12.6bn in 2016. This is predicted to climb to $43.6bn by 2020. Such soaring revenue levels equates to a growth rate of 28.2% annually over five years. In IDC’s survey, in which over 6000 IT organisations were questioned, it was found that at least two-thirds are either already using IaaS or plan to do so in the coming years. IDC explained that the “public cloud IaaS is slowly transforming the enterprise IT value chain.” Based on figures for 2015, which saw the sector grow by 51%, current estimates are that both 2016 and 2017 will experience growth rates of around 41%.

In addition to the rising revenue levels, IDC also drew out some other interesting points from the data. For example, it is expected that 80% of all IT organisations are set to commit strategies to hybrid architectures over the coming two years. IDC also noted that the market will shift towards OpenStack, with regional public cloud providers opening in coming months and years. These services are set to have strong demand due to local data sovereignty and regulatory concerns. Finally, it was revealed that Amazon Web Services remains the strongest player in the IaaS market. In fact, 56% of the total revenue pie is shared by the top 10 IaaS vendors, showing the dominance these providers have. However, it also means much of the market share remains available, with new and innovate start-ups set to take advantage of this in the coming years.




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