Advanced Computing in the Age of AI | Wednesday, December 6, 2023

Forecasts Call For Cloud Burst Through 2018 

The inexorable shift to the cloud is beginning to take on the features of a storm front, according to the latest survey of the cloud services market. Indeed, industry watcher IDC forecasts that public IT cloud services will account for more than half of global software, server, and storage spending growth by 2018.

In a new forecast, IDC predicted that spending on public IT cloud services would jump at a compound annual growth rate 22.8 percent over the next five years to $127 billion. That total is about six times the growth rate of the overall IT market, IDC reckons.

Driving robust growth will be the "explosion" of cloud-based applications and use cases as cloud services begin to saturate the business-to-business and consumer markets, IDC said. To that end, IDC chief analyst Frank Gens added that he expects application developers to triple their output over the next five year, resulting in a "ten-fold increase in the number of cloud-based solutions."

As cloud innovation heats up, so too will competition, fueling what the market analysts predicts will be a period of cloud industry consolidation. For example, storage leader EMC is frequently mentioned as a possible takeover target by an established, vertical cloud services provider.

"This combination of explosive innovation and intense competition will make 2015 a pivotal one for current and aspiring IT market leaders," Gens added in a statement.

Software-as-a-service (SaaS) offerings are expected to continue dominating spending for public IT cloud services, accounting for an estimated 70 percent of 2014 cloud investments. "This is largely because most customer demand is at the application level," IDC found.

Meanwhile, infrastructure-as-a-service (IaaS) offerings like cloud compute and storage are expected to grow at an annual compound rate of 31 percent through 2018. Platform-as-a-service (PaaS) and cloud storage are seen as the fastest growing categories as big data analytics and developer cloud services gather momentum, IDC said.


The market watcher broke down the current public IT cloud service sector as follows: SaaS accounted for the lion's share of the public cloud market in 2014, at $39.8 billion, followed by IaaS at $8.7 billion and PaaS at $8.1 billion.

By 2018, IDC forecasts that public cloud spending will more than double to $127.5 billion, including: $82.7 billion in SaaS spending, $24.6 billion for IaaS and $20.3 billion in PaaS expenditures.

Much of this spending is also expected to be driven by the adoption of "cloud first" strategies embraced both by IT vendors as they expand their cloud offerings and by buyers looking to deliver new products via the cloud, IDC predicted.

The cloud forecast does not include revenue from private cloud service, which IDC noted are dedicate to specific customers and are not provisioned from a multitenant resource platform. The global survey covered counties and geographic regions.

About the author: George Leopold

George Leopold has written about science and technology for more than 30 years, focusing on electronics and aerospace technology. He previously served as executive editor of Electronic Engineering Times. Leopold is the author of "Calculated Risk: The Supersonic Life and Times of Gus Grissom" (Purdue University Press, 2016).