Worldwide cloud services revenue is forecast to reach USD 68.3
billion in 2010, a 16.6 percent increase from 2009 revenue of USD
58.6 billion, according to Gartner. The industry is poised for
strong growth through 2014, when worldwide cloud services revenue
is projected to reach USD 148.8 billion.
"We are seeing an acceleration of adoption of cloud computing and
cloud services among enterprises and an explosion of supply-side
activity as technology providers maneuver to exploit the growing
commercial opportunity," said Ben Pring, research vice president at
Gartner. "The scale of application deployments is growing;
multi-thousand-seat deals are increasingly common. IT managers are
thinking strategically about cloud service deployments;
more-progressive enterprises are thinking through what their IT
operations will look like in a world of increasing cloud service
leverage. This was highly unusual a year ago."
Gartner estimates that, over the course of the next five years,
enterprises will spend USD 112 billion cumulatively on software as
a service (SaaS), platform as a service (PaaS), and infrastructure
as a service (IaaS), combined.
"After many years of germination, most notably in the SaaS arena,
the core ideas at the heart of cloud computing — such as pay
for use, multi-tenancy and external services — appear to be
resonating more strongly," Pring said. "In part, this can be
explained by macroeconomic factors. The financial turbulence of the
last 18 months has meant every organization has been scrutinizing
every expenditure. An IT solution that can deliver functionality
less expensively and with more agility (remembering that time is
money) is hard to ignore against this backdrop."
More fundamentally, cloud computing has become more material,
because the challenges inherent in managing technology based on the
principles of previous eras — complex, custom, expensive
solutions managed by large in-house IT teams — have become
greater, and the benefits of cloud computing in addressing these
challenges have matured to become more appropriate and attractive
to all types of enterprises.
The US share of the worldwide cloud services market was 60 percent
in 2009 and will be 58 percent in 2010, but by 2014, this will be
diluted to 50 percent as other countries and regions begin to adopt
cloud services in more-significant volumes. Western Europe is
expected to account for 23.8 percent of the cloud services market
in 2010, and Japan will represent 10 percent. In 2014, the UK is
forecast to account for 29 percent of the market, while Japan will
represent 12 percent of cloud services revenue.
"We have not seen any evidence yet to support the often-touted
hypothesis that smaller and developing countries will "leapfrog"
Western markets — and come to represent a large proportion of
the overall worldwide market — through their adoption of the
Internet and cloud services," Pring said.
In industry terms, the financial services and manufacturing
industries are the largest early adopters of cloud services.
Communications and high-tech industries are also leveraging the
cloud in significant volume, while the public sector is also
clearly interested in the potential of cloud services and its share
of the overall market.
However, Pring said that, although interest in cloud computing has
grown, many enterprises still have strong concerns about the idea
of cloud computing and cloud-computing products as well as cloud
services. Security is primary among these, while other concerns
include availability of service, vendor viability and maturity.
"Many enterprises may be examining cloud computing and cloud
services, but are far from convinced that it is appropriate for
their requirements," he said. "We expect that this will be a
significant opportunity for existing IT services players to evolve
their current offerings — such as outsourcing, system
integration, development, etc. — to become cloud-enabled and
try to combine the best of the two worlds, namely traditional IT
services and cloud computing."
"Disclaimer Note: "InformationWeek India and UBM India do not endorse, and have not verified the views and claims expressed in this vendor Press Release."