A roundup of 2018 cloud computing forecasts and market estimates

Cloud computing platforms and applications are proliferating across enterprises today, serving as the IT infrastructure driving new digital businesses. The following roundup of cloud computing forecasts and market estimates reflect a maturing global market for cloud services, with proven scale, speed and security to support new business models.

CIOs who are creating compelling business cases that rely on cloud platforms as a growth catalyst are the architects enabling these new business initiatives to succeed. The era of CIO strategist has arrived. Key takeaways include the following:

Amazon Web Services (AWS) accounted for 55% of the company’s operating profit in Q2, 2018, despite contributing only 12% to the company’s net sales

In Q1, 2018 services accounted for 40% of Amazon’s revenue, up from 26% three years earlier. Source: Cloud Business Drives Amazon’s Profits, Statista, July 27, 2018.

80% of enterprises are both running apps on or experimenting with Amazon Web Services (AWS) as their preferred cloud platform

67% of enterprises are running apps on (45%) and experimenting on (22%) the Microsoft Azure platform. 18% of enterprises are using Google’s Cloud Platform for applications today, with 23% evaluating the platform for future use. RightScale’s 2018 survey was included in the original data set Statista used to create the comparison. Source: Statista, Current and planned usage of public cloud platform services running applications worldwide in 2018. Please click on the graphic to expand for easier viewing.

Enterprise adoption of Microsoft Azure increased significantly from 43% to 58% attaining a 35% CAGR while AWS adoption increased from 59% to 68%

Enterprise respondents with future projects (the combination of experimenting and planning to use) show the most interest in Google (41%). Source: RightScale 2018 State of the Cloud Report. Please click on the graphic to expand for easier viewing.

The enterprise SaaS market is now generating $20bn in quarterly revenues for software vendors, a number that is growing by 32% per year 

Microsoft is in the lead with a worldwide market share of over 17% and is now the leading SaaS vendor primarily due to its leadership in the high-growth collaboration segment. Source: Quarterly SaaS Spending Reaches $20 billion as Microsoft Extends its Market Leadership, Synergy Research August 21, 2018.

Financial services has the highest percentage of server images deployed in private or public clouds, approaching nearly 100% versus a median adoption rate of 19%

A recent McKinsey & Company study found Financial Services had progressed the furthest to advanced cloud maturity beyond virtualization and basic cloud compared to insurance and healthcare. Source: McKinsey & Company, Cloud adoption to accelerate IT modernization by Nagendra Bommadevara, Andrea Del Miglio, and Steve Jansen.

Wikibon projects the True Private Cloud (TPC) worldwide market will experience a compound annual growth rate of 29.2%, reaching $262.4bn by 2027

The firm predicts TPC growth will far outpace the infrastructure-as-a-service (IaaS) growth of 15.2% over the same period. A true private cloud is distinguished from a private cloud by the completeness of the integration of all aspects of the offering, including performance characteristics such as price, agility, and service breadth. Please see the source link for additional details on TPC. Source: Wikibon’s 2018 True Private Cloud Forecast and Market Shares. Please click on the graphic to expand for easier viewing.

Quality control, computer-aided engineering, and manufacturing execution systems (MES) are the three most widely adopted systems in the cloud by discrete and process

The survey also found that 60% of discrete and process manufacturers say their end users prefer the cloud over on-premise. Source: Amazon Web Services & IDC: Industrial Customers Are Ready For The Cloud – Now (PDF, 13 pp., no opt-in, sponsored by AWS). Please click on the graphic to expand for easier viewing.

The worldwide public cloud services market is projected to grow by 17.3 3% in 2019 to total $206.2bn, up from $175.8bn in 2018 according to Gartner

In 2018 the market will grow a healthy 21% up from $145.3bn in 2017 according to the research and advisory firm. Infrastructure as a service (IaaS) will be the fastest-growing segment of the market, forecasted to grow by 27.6% in 2019 to reach $39.5bn, up from $31bn in 2018. By 2022, Gartner expects that 90% of enterprises purchasing public cloud IaaS will do so from an integrated IaaS and Platform-as-a-Service (PaaS), and will use both the IaaS and PaaS capabilities from that provider. Source: Gartner Forecasts Worldwide Public Cloud Revenue to Grow 17.3 Percent in 2019.

Total spending on IT infrastructure products (server, enterprise storage, and Ethernet switches) for deployment in cloud environments is projected to attain a 10.9% year-over-year growth rate, reaching $52.3bn this year

Long-term, IDC expects spending on off-premises cloud IT infrastructure will grow at a five-year compound annual growth rate (CAGR) of 10.8%, reaching $55.7B. Source: Spending on IT Infrastructure for Deployment in Cloud Environments is Forecast to Grow 10.9% in 2018, According to IDC.

More than $1.3tn in IT spending will be directly or indirectly affected by the shift to cloud by 2022

28% of spending within key enterprise IT markets will shift to the cloud by 2022, up from 19% in 2018. The largest cloud shift before 2018 occurred in application software, particularly driven by customer relationship management (CRM) software, with Salesforce dominating as the market leader. CRM has already reached a tipping point where a higher proportion of spending occurs in the cloud than in traditional software. Source: Gartner Says 28 Percent of Spending in Key IT Segments Will Shift to the Cloud by 2022.

IDC predicts worldwide public cloud services spending will reach $180bn in 2018, an increase of 23.7% over 2017

According to IDC, the market is expected to achieve a five-year compound annual growth rate (CAGR) of 21.9% with public cloud services spending totaling $277B in 2021. The industries that are forecast to spend the most on public cloud services in 2018 are discrete manufacturing ($19.7B), professional services ($18.1B), and banking ($16.7B). The process manufacturing and retail industries are also expected to spend more than $10B each on public cloud services in 2018. These five industries will remain at the top in 2021 due to their continued investment in public cloud solutions. The industries that will see the fastest spending growth over the five-year forecast period are professional services (24.4% CAGR), telecom (23.3% CAGR), and banking (23.0% CAGR). Source: Worldwide Public Cloud Services Spending Forecast to Reach $160 Billion This Year, According to IDC.

Discrete manufacturing is predicted to lead all industries on public cloud spending of $19.7bn in 2018 according to IDC

Additional industries forecast to spend the most on public cloud services this year include Professional Services at $18.1B and Banking at $16.7B. The process manufacturing and retail industries are also expected to spend more than $10B each on public cloud services in 2018. According to IDC, these five industries will remain at the top in 2021 due to their continued investment in public cloud solutions. The industries that will see the fastest spending growth over the five-year forecast period are Professional Services with a 24.4% CAGR, Telecommunications with a 23.3% CAGR, and banking with a 23% CAGR. Source: Worldwide Public Cloud Services Spending Forecast to Reach $160 Billion This Year, According to IDC.

Additional resources:

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