Cloud market revenue is projected to increase at a compound annual growth rate (CAGR) of 36 per cent, putting the global market just shy of $20bn at the end of 2016, according to research released Tuesday. And size clearly matters with less than a quarter of players generating the lion’s share of the available revenues.

James Middleton

August 21, 2013

2 Min Read
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Cloud market revenue is projected to increase at a compound annual growth rate (CAGR) of 36 per cent, putting the global market just shy of $20bn at the end of 2016, according to research released Tuesday. And size clearly matters with less than a quarter of players generating the lion’s share of the available revenues.

Analyst house 451 Research found that IaaS (Infrastructure as a Service) accounted for the majority of total market revenue in 2012, winning more than half of the total public cloud market share. This sector is expected to see a 37 per cent CAGR through 2016.

The PaaS (Platform as a Service) layer accounted for nearly a quarter of the public cloud revenue in 2012, and will also experience the fastest growth – a projected CAGR of 41 per cent between 2012 and 2016.

The infrastructure SaaS (Software as a Service) sector, which does not include enterprise SaaS market, represented also won a quarter of total cloud revenue in 2012 and is expected to generate a 29 per cent CAGR through 2016, making it the weakest performing sector.

Referring to the leaders as IT ‘titans’, 451 found that size is indeed important in the cloud sphere, with publicly traded companies comprising 23 per cent of the cloud vendors tracked but generating 78 per cent of the total revenue. The majority of vendors are still below the $5m revenue threshold, with vendors that constitute the cloud ‘midmarket’ (between $5m and $50m in revenue) accounting for 25 per cent of total revenue in 2012.

Only a dozen cloud vendors generated more than $75m each in revenue in 2012 while 83 per cent of all services provided generated $15m or less each in 2012.

“Cloud computing is on the upswing and demand for public cloud services remains strong,” said Yulitza Peraza, Analyst, Quantitative Services, 451 Research. “However, public cloud adoption continues to face hurdles including security concerns, transparency and trust issues, workload readiness and internal non-IT-related organizational issues.”

 

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About the Author(s)

James Middleton

James Middleton is managing editor of telecoms.com | Follow him @telecomsjames

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