Cloud revenues set to grow to $186 billion this year

The global public cloud services market is forecast to grow a total value of $186.4 billion in 2018, according to Gartner. 

This would be an increase of more than 21 per cent since 2017, when it was $153.5 billion.

Gartner’s research found that the fastest-growing segment of the market is cloud system infrastructure services, or infrastructure as a service, usually shortened to IaaS. The IaaS market is forecast to grow 35.9 percent in 2018 to reach $40.8 billion.

Gartner expects the top 10 providers – which includes Amazon, the leader, Google, Microsoft and Oracle – to account for nearly 70 per cent of the IaaS market by 2021, up from 50 per cent in 2016.

Sid Nag, research director at Gartner, says: “The increasing dominance of the hyperscale IaaS providers creates both enormous opportunities and challenges for end users and other market participants.

“While it enables efficiencies and cost benefits, organizations need to be cautious about IaaS providers potentially gaining unchecked influence over customers and the market.

“In response to multi-cloud adoption trends, organizations will increasingly demand a simpler way to move workloads, applications and data across cloud providers’ IaaS offerings without penalties.”

While IaaS has grown quickly, software as a service – or SaaS – remains the largest segment of the cloud market, says Gartner. The research company expects revenue for SaaS to grow by 22.2 per cent to reach $73.6 billion in 2018.

Furthermore, Gartner forecasts SaaS to reach 45 per cent of total application software spending by 2021.

Nag says: “In many areas, SaaS has become the preferred delivery model. Now SaaS users are increasingly demanding more purpose-built offerings engineered to deliver specific business outcomes.”

Within the platform as a service (PaaS) category, Gartner says the fastest-growing segment is database platform as a service (dbPaaS).

Gartner expects dbPaaS to reach almost $10 billion by 2021. The researcher adds that hyperscale cloud providers are increasing the range of services they offer to include dbPaaS.

Nag says: “Although these large vendors have different strengths, and customers generally feel comfortable that they will be able to meet their current and future needs, other dbPaaS offerings may be good choices for organizations looking to avoid lock-in.”

Public cloud revenue is growing more strongly than initially forecast, but Gartner says it expects growth rates to stabilise from 2018 onward.

This would reflect the “increasingly mainstream status and maturity that public cloud services will gain within a wider IT spending mix”, says the company.