Cloud Service Sales Worldwide To Exceed $68B In 2010

Researcher says global revenue will jump 16.6 percent this year, approach $150 billion by 2014.

Sales of cloud services are expected to jump 16.6 percent to $68.3 billion this year and more than double to $148.8 billion by 2014, according to a new study from researcher Gartner Inc.

Gartner said that the market for cloud computing and cloud services largely will be driven by enterprise businesses as IT managers consider more cloud deployments and technology providers maneuver to capitalize on the emerging segment.

Economic factors, ranging from cost containment to budgetary restraints, continue to play a significant role in the growth of commercial cloud technology, the researcher said.

Data gleaned from Gartner’s report entitled, “Forecast: Public Cloud Services, Worldwide and Regions, Industry Sectors, 2009-2014,” points to enterprises spending about $112 billion over the next five years on cloud offerings such as software-as-a-service (SaaS), platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS).

"We are seeing an acceleration of adoption of cloud computing and cloud services among enterprises and an explosion of supply-side activity as technology providers maneuver to exploit the growing commercial opportunity," said Ben Pring, Gartner research vice president.

"The scale of application deployments is growing; multi-thousand-seat deals are increasingly common,” he said.

Pring said that the imminent explosion in cloud computing and cloud services is closely tied to corporate examination of spending.

"After many years of germination, most notably in the SaaS arena, the core ideas at the heart of cloud computing, such as pay for use, multi-tenancy and external services, appear to be resonating more strongly," he said.

"In part, this can be explained by macroeconomic factors,” Pring said. “The financial turbulence of the last 18 months has meant every organization has been scrutinizing every expenditure.”

Pring said that cloud computing has become more relevant as a material solution for companies grappling to control costs associated with managing sprawling in house IT infrastructures.

Cloud computing growth to come from all geographic regions

Gartner expects that sales of cloud computing technology and cloud services will come largely from businesses in North American and Europe in the next five years, although other regions of the world will experience growth.

The U.S. share of the worldwide cloud services market is expected to shrink over the next five years, ebbing from 60 percent in 2009 to 50 percent by 2014, Gartner said.

In 2010, Western Europe will account for about 24 percent of the cloud services market and Japan will generate 10 percent of the segment’s sales. By 2014, the United Kingdom will represent about 29 percent of the cloud services market and Japan about 12 percent.

Gartner expects the financial services and manufacturing sectors to represent the largest pool of early adopters of cloud services. Other industries involved with cloud services include communications, high technology and the public sector.

Pring cautioned that while interest in cloud computing is growing, many businesses still are concerned over key issues such as security, service availability, vendor reliability and maturity.

He suggested that for the time being businesses may opt for a hybrid model that combines traditional IT services and cloud computing.

"Many enterprises may be examining cloud computing and cloud services, but are far from convinced that it is appropriate for their requirements," Pring said.

"We expect that this will be a significant opportunity for existing IT services players to evolve their current offerings, such as outsourcing, system integration, development, etc., to become cloud-enabled and try to combine the best of the two worlds, namely traditional IT services and cloud computing."

TAGS: cloud computing,cloud services,SaaS,IT infrastructure,Gartner

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