The Cloud’s Raining Money

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The market for off-premises cloud services grew to $93 billion last year, up 54 percent from 2014, according to new data from analyst firm IHS Technology.

While that’s a huge number, IHS predicts the market will expand to a mind-boggling $278 billion by 2020, a five-year compound annual growth rate of 25 percent.

Software-as-a-Service (SaaS) represented the most-used cloud service last year, with nearly 50 percent of the market, followed by Infrastructure-as-a-Service (IaaS) at second with 39 percent.

Microsoft, Amazon, and Google are locked in pitched battle to seize as much of the burgeoning cloud market as possible. Their primary weapon is price cuts: Amazon has slashed fees for its AWS platform dozens of times over the past several years, forcing its competitors to make similar reductions. Relying on similar tactics, Google has also argued that its pricing structure is ultimately better for customers than the plans offered by its rivals.

The low prices and multiplying features present a mix of good and bad news for startups and indie developers. On one hand, new companies can use all the cheap cloud services they can get. On the other, the sheer size and power of existing companies in the cloud-services space makes it that much harder for startups to break through. How easy is it to build a new kind of storage company, for example, when Google and Microsoft offer tons of storage for virtually free?

Nonetheless, if you believe the current analyst estimates, the cloud-services “pie” is only growing—and for those with the right mix of determination and innovative thought, that means more chances to carve out a slice as the next big services provider.

Image Credit: Your Design/Shutterstock.com

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