The Worldwide Semiannual Public Cloud Services Spending Guide quantifies public cloud computing purchases by cloud type for 20 industries across eight regions and 54 countries. Spending Guides are designed to help IT decision makers to clearly understand the industry-specific scope and direction of public cloud services spending today and over the next five years.
Software-as-a-service (SaaS) will remain the dominant cloud computing type, capturing more than two thirds of all public cloud spending through most of the forecast period. Worldwide spending on infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) will grow at a faster rate than SaaS with five-year CAGRs of 27% and 30.6% respectively.
"Over the past several years, the software industry has been shifting to a cloud-first (SaaS) development and deployment model. By 2018, most software vendors will have fully shifted to a SaaS/PaaS code base," said Frank Gens, Senior Vice President & Chief Analyst at IDC. "This means that many enterprise software customers, as they reach their next major software upgrade decisions, will be offered SaaS as the preferred option. Put together, new solutions born on the cloud and traditional solutions migrating to the cloud will steadily pull more customers and their data to the cloud."
From a company size perspective, large and very large companies will be the primary driver of worldwide public cloud services with spending of more than US$80 billion in 2019. However, small and medium sized businesses (SMBs) will remain a significant contributor to overall spending with more than 40% of the worldwide total throughout the forecast period coming from companies with fewer than 500 employees.
The industries with the largest public cloud services expenditures in 2015 were discrete manufacturing at US$8.6 billion, followed by banking and professional services at US$6.8 billion and US$6.6 billion. By 2019, professional services is forecast to move ahead of banking into the No. 2 position worldwide. These three industries were also the public cloud services spending leaders in the Americas and in Europe, Middle East, and Africa (EMEA) in 2015. However, telecommunications was the second largest industry in the Asia Pacific region and is forecast to move into the top position by 2019.
Telecommunications will be the fastest-growing vertical industry over the 2014 to 2019 forecast period with a worldwide CAGR of 22.2%. The following industries will also experience five-year CAGRs greater than 20%: media, state/local government, education, retail, transportation, and resource industries.
"Cloud services will remain the essential foundation of the IT industry's 3rd Platform of innovation and growth. As the cloud market enters an 'innovation stage', there will be an explosion of new solutions and value creation on top of the cloud," said Eileen Smith, Program Director, Customer Insights and Analysis. "Industry-specific applications will be a driving force as businesses look for solutions that can be easily configured to their unique business and vertical requirements. With the huge increase in the number and diversity of services available in the market, organisations across the industries will shift steadily toward cloud-first strategies to enable digital transformation."
The research firm had earlier quoted its Worldwide Quarterly Cloud IT Infrastructure Tracker, on total spending on IT infrastructure products for deployment in cloud environments, which is to increase by 24.6% in 2015 to reach US$32.8 billion. The amount includes spending on servers, storage (excluding double counting between storage and server), and Ethernet switch products.
Spending on cloud IT infrastructure will grow from 28% of overall spending on enterprise IT infrastructure in 2014 to 32.9% in 2015. In comparison, spending on IT infrastructure deployed in traditional, non-cloud, environments will decline 1.1% in 2015. At US$67 billion it will remain the largest segment of the market. Spending on private cloud IT infrastructure will grow by 19.1% year over year to $12.4 billion, while spending on public cloud IT infrastructure will increase 28.2% year over year in 2015 to US$20.4 billion.
For all three technologies – server, storage and Ethernet switch – growth in spending will exceed 20%; spending on servers will grow at the highest rate, 26.7%.
For the five-year forecast period, IDC expects that spending on IT infrastructure for cloud environments will grow at a CAGR of 15.5% and will reach US$54.3 billion by 2019, accounting for 46.6% of the total spending on enterprise IT infrastructure. Spending on non-cloud IT infrastructure will decline at a -1.7% CAGR during the same period. Within the cloud segment, spending on public and private cloud IT infrastructure will grow at 16.6% and 13.8% CAGRs respectively. In 2019, IDC expects service providers will spend US$34.4 billion on IT infrastructure for delivering public cloud services, while spending on private cloud IT infrastructure will reach US$19.9 billion.
"The growing sophistication and reliability of cloud services continue to drive increasing demand for public and private cloud offerings," said Natalya Yezhkova, Research Director, Storage Systems. "End users find that through utilisation of multiple deployment models, including public cloud, on-premises and off-premises private cloud, and traditional IT infrastructure, they can achieve flexibility and agility tuned to the requirements of various legacy and next-gen workloads and applications."
Interested?
Read the TechTrade Asia blog posts on:
IDC's 2016 cloud predictions for Asia Pacific
2016 predictions for the cloud
*IDC defines cloud services more formally through a checklist of key attributes that an offering must manifest to end users of the service. Public cloud services are shared among unrelated enterprises and consumers; open to a largely unrestricted universe of potential users; and designed for a market, not a single enterprise. The public cloud market includes variety of services designed to extend or, in some cases, replace IT infrastructure deployed in corporate data centres. It also includes content services delivered by a group of suppliers IDC calls Value Added Content Providers (VACP). Private cloud services are shared within a single enterprise or an extended enterprise with restrictions on access and level of resource dedication and defined/controlled by the enterprise (and beyond the control available in public cloud offerings); can be onsite or offsite; and can be managed by a third-party or in-house staff. In private cloud that is managed by in-house staff, "vendors (cloud service providers)" are equivalent to the IT departments/shared service departments within enterprises/groups. In this utilisation model, where standardised services are jointly used within the enterprise/group, business departments, offices, and employees are the "service users."
"Over the past several years, the software industry has been shifting to a cloud-first (SaaS) development and deployment model. By 2018, most software vendors will have fully shifted to a SaaS/PaaS code base," said Frank Gens, Senior Vice President & Chief Analyst at IDC. "This means that many enterprise software customers, as they reach their next major software upgrade decisions, will be offered SaaS as the preferred option. Put together, new solutions born on the cloud and traditional solutions migrating to the cloud will steadily pull more customers and their data to the cloud."
From a company size perspective, large and very large companies will be the primary driver of worldwide public cloud services with spending of more than US$80 billion in 2019. However, small and medium sized businesses (SMBs) will remain a significant contributor to overall spending with more than 40% of the worldwide total throughout the forecast period coming from companies with fewer than 500 employees.
The industries with the largest public cloud services expenditures in 2015 were discrete manufacturing at US$8.6 billion, followed by banking and professional services at US$6.8 billion and US$6.6 billion. By 2019, professional services is forecast to move ahead of banking into the No. 2 position worldwide. These three industries were also the public cloud services spending leaders in the Americas and in Europe, Middle East, and Africa (EMEA) in 2015. However, telecommunications was the second largest industry in the Asia Pacific region and is forecast to move into the top position by 2019.
Telecommunications will be the fastest-growing vertical industry over the 2014 to 2019 forecast period with a worldwide CAGR of 22.2%. The following industries will also experience five-year CAGRs greater than 20%: media, state/local government, education, retail, transportation, and resource industries.
"Cloud services will remain the essential foundation of the IT industry's 3rd Platform of innovation and growth. As the cloud market enters an 'innovation stage', there will be an explosion of new solutions and value creation on top of the cloud," said Eileen Smith, Program Director, Customer Insights and Analysis. "Industry-specific applications will be a driving force as businesses look for solutions that can be easily configured to their unique business and vertical requirements. With the huge increase in the number and diversity of services available in the market, organisations across the industries will shift steadily toward cloud-first strategies to enable digital transformation."
The research firm had earlier quoted its Worldwide Quarterly Cloud IT Infrastructure Tracker, on total spending on IT infrastructure products for deployment in cloud environments, which is to increase by 24.6% in 2015 to reach US$32.8 billion. The amount includes spending on servers, storage (excluding double counting between storage and server), and Ethernet switch products.
Spending on cloud IT infrastructure will grow from 28% of overall spending on enterprise IT infrastructure in 2014 to 32.9% in 2015. In comparison, spending on IT infrastructure deployed in traditional, non-cloud, environments will decline 1.1% in 2015. At US$67 billion it will remain the largest segment of the market. Spending on private cloud IT infrastructure will grow by 19.1% year over year to $12.4 billion, while spending on public cloud IT infrastructure will increase 28.2% year over year in 2015 to US$20.4 billion.
For all three technologies – server, storage and Ethernet switch – growth in spending will exceed 20%; spending on servers will grow at the highest rate, 26.7%.
For the five-year forecast period, IDC expects that spending on IT infrastructure for cloud environments will grow at a CAGR of 15.5% and will reach US$54.3 billion by 2019, accounting for 46.6% of the total spending on enterprise IT infrastructure. Spending on non-cloud IT infrastructure will decline at a -1.7% CAGR during the same period. Within the cloud segment, spending on public and private cloud IT infrastructure will grow at 16.6% and 13.8% CAGRs respectively. In 2019, IDC expects service providers will spend US$34.4 billion on IT infrastructure for delivering public cloud services, while spending on private cloud IT infrastructure will reach US$19.9 billion.
"The growing sophistication and reliability of cloud services continue to drive increasing demand for public and private cloud offerings," said Natalya Yezhkova, Research Director, Storage Systems. "End users find that through utilisation of multiple deployment models, including public cloud, on-premises and off-premises private cloud, and traditional IT infrastructure, they can achieve flexibility and agility tuned to the requirements of various legacy and next-gen workloads and applications."
Read the TechTrade Asia blog posts on:
IDC's 2016 cloud predictions for Asia Pacific
2016 predictions for the cloud
*IDC defines cloud services more formally through a checklist of key attributes that an offering must manifest to end users of the service. Public cloud services are shared among unrelated enterprises and consumers; open to a largely unrestricted universe of potential users; and designed for a market, not a single enterprise. The public cloud market includes variety of services designed to extend or, in some cases, replace IT infrastructure deployed in corporate data centres. It also includes content services delivered by a group of suppliers IDC calls Value Added Content Providers (VACP). Private cloud services are shared within a single enterprise or an extended enterprise with restrictions on access and level of resource dedication and defined/controlled by the enterprise (and beyond the control available in public cloud offerings); can be onsite or offsite; and can be managed by a third-party or in-house staff. In private cloud that is managed by in-house staff, "vendors (cloud service providers)" are equivalent to the IT departments/shared service departments within enterprises/groups. In this utilisation model, where standardised services are jointly used within the enterprise/group, business departments, offices, and employees are the "service users."
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