Posted by: Heather Clancy
There is more evidence out this week underscoring the thesis that it is time for solution providers to stop wondering about “if” cloud will become a factor for their businesses and starting figuring out “when” its influence will hit their bottom line — either positively or negatively.
This year, public cloud services will surpass $109 billion in IT spending — with business process applications delivered by the cloud accounting for the biggest part of that amount, or $84.2 billion (up from $72 billion in 2011), reports research firm Gartner.
One reason that number is so big, though, is because it includes money spent for cloud-driven advertising services, which represent about 47 percent of that number.
The second biggest chunk of spending will be for applications delivered as a service, also known as software as a service (SaaS) — projected at $14.4 billion in revenue for 2012. Infrastructure as a service (IaaS) will account for about $6.2 billion this year, while platform as a service (PaaS) will drive about $1.2 billion in sales.
Overall, the public cloud services spending will grow about 19.6 percent in 2012, which begs the question: how long can your business ignore its positive influence, in the form of potential new services that you could provider around process consulting, or overlook the potential negative impact on its sales of on-premise solutions that cloud services are replacing?
“The cloud services market is clearly a high-growth sector within the overall IT marketplace,” says Ed Anderson, a research director at Gartner, discussing the data. “The key to taking advantage of this growth will be understanding the nuances of the opportunity with service segments and geographic regions, and then prioritizing investments in line with the opportunities.”
From an investment standpoint, it’s important to know, for example, that the market for IaaS will be roughly the same size as the market for SaaS by 2016, according to Gartner’s projections.
That means solution providers need to think long and hard about whether IaaS will displace hardware they are selling today and start looking at which IaaS models offer the best places for them to add value in terms of management, consulting and security.
North America will continue to dominate absolute spending for cloud services, accounting 61 percent of the anticipated growth between 2010 and 2016, the data show
By that time, worldwide spending for public cloud services is forecast at $206.6 billion, says Gartner.