subscribe: Daily Newsletter

 

Public cloud services set to boom

0 comments

According to the latest release of the Worldwide Semiannual Public Cloud Services Spending Guide from IDC, worldwide revenue from public cloud services will reach over $195-billion in 2020, more than doubling the current market size.
Western Europe will continue to represent around a fifth of the global market, with revenues growing from $15-billion in 2015 to $38.6-billion in 2020, at a 20.8% five-year compound annual growth rate (CAGR).
Software as a service (SaaS) — comprising the service enablement of applications and system infrastructure software — accounted for 66.9% of all public cloud revenue in 2015, and will continue to represent the largest portion in 2020. However, Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) revenues are forecast to grow at a faster rate than SaaS, expanding their share of the overall market over the forecast period.
“The flexibility, low initial cost, and ease of use provided by cloud deployments is reshaping the way companies select and buy new IT solutions. Line of business managers are gaining a central role in selecting IT providers, and the focus across all industries is on how IT can meet specific business objectives,” says Serena Da Rold, senior research manager, Customer Insights and Analysis. “Cloud providers need to keep close to their target industries, strive to understand their business processes and key pain points, in order to offer clients in each segment the solution and features that meet their needs.”
Discrete manufacturing, banking, and process manufacturing are the largest spenders, representing nearly 36% of cloud revenues in the region. Utilities, insurance, and discrete manufacturing will see the fastest revenue growth in the region over the next five years. However, all the 20 industries considered in the spending guide will more than double cloud spending over the forecast period.
“Public cloud services have changed how European organisations evaluate and select software. Aspects such as very fast rollouts, continuous upgrades, and ease of post-implementation reconfiguration are now top criteria for new application purchases,” says Bo Lykkegaard, associate vice-president, Software & Cloud Services Trackers. “Some European countries have started the adoption of public cloud services later than others, due to concerns related to information security, data location, solution availability, and other issues. However, IDC foresees that the public cloud movement will sweep across all of Europe and that some markets of cautious adoption will outgrow the others over the next five years.”
In Western Europe, the UK will remain the largest market for public cloud services through 2020, generating nearly 30% of total revenue in the region. Germany and France follow in terms of size, with the three largest countries representing collectively around 64% of total revenue. Germany will see the strongest growth over the next five years, followed by some of the smaller countries, such as Ireland, Sweden, and Switzerland, which will gradually increase their share of the regional market.