Cloud Computing: Now A $180 Billion Market

The overall #cloud market expanded by 24 percent last year, powered by revenues from infrastructure and platform services that grew at nearly double that rate. Over the four quarters leading up to September of 2017—essentially Q4 of 2016 to Q3 of 2017—cloud sales, including on all services and all infrastructure products used for building clouds, achieved an overall market of $180 billion, according to a report released Thursday by Synergy research. IaaS and PaaS grew at a 47 percent clip, solidly outperforming Software-as-a-Service revenues which were 31 percent above the previous year. Hosted private cloud service providers saw their industry enjoy 30 percent growth. [Related: Even After An Epic Year For Global Data Center Consolidation, Experts Say Regional Providers Still Stand Out In The Cloud] Back in 2016, the spend on cloud services for the first time surpassed that on hardware and software components for building clouds. The gulf between those two segments dramatically widened in 2017 due to three times faster growth in subscriptions to aggregated services than capital expenditures for directly purchasing infrastructure products. In the four quarters evaluated by Synergy, businesses spent nearly $100 billion on services. [Sponsored Suggested Post: IoTConnex Virtual Conference On Demand Discover new IoT research and insights. Hear solution provider success stories. Find your IoT opportunity.] @Amazon Web Services and @Microsoft saw the most revenue from the #IaaS and #PaaS category, @IBM and @Rackspace from hosted #privatecloud, and @Microsoft and @Salesforce were the dominant enterprise #SaaS vendors. Total purchases of hardware and software products used to build clouds didn't eclipse $80 billion in the same period. #Publiccloud operators accounted for half that spend, outpacing the growth of their private cloud counterparts. @Cisco and @Dell EMC were atop the market in selling infrastructure products to those public cloud providers—a business that expanded by roughly 13 percent for the networking, server and storage giants. While hardware and software investments for building private clouds also amounted to roughly $40 billion in sales, that side of the industry didn't crack 10 percent growth in 2017. Dell EMC and HPE led that category. Also on the services side, Unified Communications-as-a-Service, a much smaller overall market, grew faster than 20 percent, led by RingCentral and Mitel. While UCaaS is "in many ways a different type of market," said Synergy chief analyst John Dinsdale, the report's author, it's "driving some radical changes in business communications." Cloud has gone from becoming mainstream, to dominating IT segments, to being the new normal, Dinsdale noted in the report. “Major barriers to cloud adoption are now almost a thing of the past, with previously perceived weaknesses such as security now often seen as strengths. Cloud technologies are now generating massive revenues for cloud service providers and technology vendors, and we forecast that current market growth rates will decline only slowly over the next five years," Dinsdale said.

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