Public cloud market to grow 41% by 2016, says IDC

Apps, system infrastructure software, platform-as-a-service (PaaS), servers and basic storage will drive global public IT cloud services spending, analyst company finds

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Public cloud market to grow 41% by 2016, says IDC

Revenue for the public cloud services market will be more than $40 billion in 2012 and will grow with a compound annual growth rate (CAGR) of 26.4% by 2016 to $100 billion, according to new research by IDC.

The public cloud services market will enjoy growth as companies accelerate their shift to the cloud services model for IT consumption, IDC says, and will account for 16% of IT revenue in the five key technology categories of applications, system infrastructure software, PaaS, servers, and basic storage.

While the US will remain the largest public cloud services market within four years, followed by Western Europe and the Asia/Pacific regions (excluding Japan), the fastest growth in public IT services spending will come from emerging markets, the analyst firm says, which will see its collective share nearly double by 2016.

Software-as-a-service (SaaS) will claim the largest share of public IT cloud services spending over the next five years, but other categories such as basic storage and PaaS will show faster growth, IDC says, adding that accelerating PaaS rollouts over the next 12-18 months will be critical to maintaining strong cloud momentum.

Frank Gens, senior vice president and chief analyst at IDC, warns that vendor failure in cloud services will lead to stagnation. "The IT industry is in the midst of an important transformative period as companies invest in the technologies that will drive growth and innovation over the next two to three decades," said Gens.

“By the end of the decade, IDC expects at least 80% of the industry's growth, and enterprises' highest-value leverage of IT, will be driven by cloud services,” he said.

IDC defines public IT cloud services as those commercially offered to a largely unrestricted marketplace of potential users, as opposed to private cloud deployments, which are dedicated to specific customers.