The cloud-computing market will hit $20 billion by 2016, according to a new report from a division of 451 Research.
“Cloud computing is on the upswing and demand for public cloud services remains strong,” Yulitza Peraza, an analyst with 451 Research (and co-author of the report), wrote in a statement. “However, public cloud adoption continues to face hurdles including security concerns, transparency and trust issues, workload readiness and internal non-IT-related organizational issues.”
The research firm’s study encompassed the Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS) segments; it also took into account the projected revenues from 309 cloud-services providers across 14 industry sectors.
IaaS earned roughly half of the cloud market’s total revenues in 2012, with PaaS and SaaS each taking a quarter. Publicly traded companies generate some 78 percent of the market’s total revenue, while only a dozen vendors created more than $75 million in revenue in 2012. Some 83 percent of service providers produced $15 million or less in 2012 revenue.
“Several vendors currently included in the cloud ‘midmarket’ are titans in their core IT sectors,” Greg Zwakman, research director of Quantitative Services for 451 Research, wrote in a statement. “It is still early days for the cloud divisions at these vendors, and running the same revenue distribution analysis against our 2016 forecasts paints a different picture.”
In other words, despite the larger IT vendors determined to dominate the cloud space with their respective IaaS, PaaS, and SaaS platforms—from Amazon with its pervasive AWS to Google with its Apps—it’s still very much a market where a smaller vendor can make some money without being crushed by a corporate behemoth—so long as they have a product capable of standing out amidst the crowd.
But as cloud platforms grow more pervasive, there’s also the issue of availability—something highlighted by semi-regular outages affecting even the largest IT vendors. (Take Amazon, for example, which experienced some sort of incident Aug. 20 that took its main shopping Website down for nearly half an hour, although the downtime didn’t affect AWS.) As more and more software migrates to the cloud, client companies need to evaluate what they can risk moving online, and what needs to stay firmly on premises for availability, security, and privacy reasons.