Cloud Growth Continues, Potential Not Yet Fully Realized

November 7, 2012 No Comments

By: Patrick Burke

According to a recent cloud computing industry survey, cloud is currently in the early stages of having its enormous potential realized, which may be a few years before its effect is fully felt across the business landscape.

Yet market growth in cloud computing continues to soar, with IT research firm Gartner forecasting public cloud services to grow 19.6 percent in 2012 to total $109 billion.

According to Gartner, this will be led by strong gains in the business process services, which represent 77 percent of the market and is forecast to grow to $84.2 billion in 2012, up from $72 billion in 2011. Another contributor to cloud growth is infrastructure as a service, which Gartner predicts will grow 45.4 percent in 2012.

Cloud advertising, which Gartner classifies as a subset of BPaaS, will continue to account for about 47 percent of total public cloud services spending, according to the report, while the software-as-a-service market is expected to grow to $14.4 billion in 2012.

“The total public cloud services market size in 2011 was $91.4 billion, and it will grow to $206.6 billion in 2016. As the market grows, IaaS will become a larger part of the overall market, while the market share of cloud management and security services will grow as well,” said Ed Anderson, research director at Gartner, in a statement. “When targeting specific markets within the cloud services marketplace, we recommend evaluating both potential market size and growth rates. These will vary by segment, subsegment, region and country.”

With 61 percent of all growth from 2010 through 2016, North America is expected to lead all other regions in growth in the cloud services market.

“The cloud services market is clearly a high-growth sector within the overall IT marketplace,” Anderson said. “The key to taking advantage of this growth will be understanding the nuances of the opportunity within service segments and geographic regions, and then prioritizing investments in line with the opportunities.”

Even when considering the double-digit growth of cloud services cited by Gartner, a survey found that the cloud market has not yet reached a level of maturity that will support major industry disruptions.

The survey was jointly conducted by Cloud Security Alliance (CSA) and ISACA, an IT certification group.

According to the study: “cloud computing can provide significant opportunities for enterprises to innovate in ways that could disrupt established ways of providing and using information technology. However, according to the participants in the CSA/ISACA survey, the cloud market has not yet reached a level of maturity that will support this scenario.”

The study predicts another two to three years before cloud computing will be firmly in the “growth” stage of development. It is currently considered in an “infancy” stage.

“Survey participants believe that platform and infrastructure service offerings are still in the infancy stage of maturity, while software service offerings are just emerging from infancy and are in the early stages of market growth. The respondents estimate that it will take approximately three years for cloud platform and infrastructure services to be firmly placed within the growth stage, and at least two years for software services to reach that stage,” according to the study.

Overall, respondents feel there is room for improvement when it comes to innovation in the cloud.

Nearly one in four (24 percent) survey takers indicate that there is no or limited levels of innovation in the market.

Forty-three percent of respondents believe there is a moderate level of innovation, while 33 percent report that the level of innovation in terms of products, services and business use is significant.

“Survey results show that CIOs and IT management understand cloud best and are most involved in driving cloud innovation in their organizations. This limits cloud maturity and innovation since cloud continues to be viewed as a technical solution and not as a business enabler,” said Yves Le Roux, a member of CSA and the ISACA Guidance and Practices Committee. “Cloud can provide business-building innovation, but to get to that point, there needs to be more buy-in and a better understanding among business leaders and C-level executives of the cloud’s value.”

Patrick1 Cloud Growth Continues, Potential Not Yet Fully Realized

Patrick Burke is a writer and editor based in the greater New York area and occasionally blogs for Rackspace Hosting.

CLOUD COMPUTING, Fresh Ink, Inside the Briefcase

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