Cloud Provider Commentary

Nov 13 2012   11:29AM GMT

More proof of the cloud’s staying power: U.S. revenue to hit $43.2B by 2016

kdeyermenjian Kara Deyermenjian Profile: kdeyermenjian

It’s getting harder and harder to remain skeptical when it comes to the value and profit potential of the cloud, and even more difficult to deny that public cloud adoption is maturing beyond just test and development like some cynics had speculated.

Further validating the public cloud’s credibility is new research by Eileen Smith, program manager at IDC, who predicts that the U.S. public IT cloud services revenue will grow from $18.5 billion in 2011 to $43.2 billion by 2016. The market will experience a compound annual growth rate of 18.5% over the forecast period – making it increasingly challenging to argue that the cloud doesn’t have staying power.

The “services and distribution” vertical, which includes retail and professional services, spent the most money on cloud services in 2011, accounting for 30.3% of total revenue that year. Smith also measured cloud spending in financial services; manufacturing and resources; infrastructure services (includes media and utilities); public sector; and home businesses and consumers.

The forecast tracked five cloud service segments, which IDC refers to as: Applications as a Service, System infrastructure software as a Service, Platform as a Service (PaaS), Server as a Service, and “basic” Storage as a Service. It’s interesting to note that most of the services studied by IDC also ranked as high-growth areas in TechTarget’s recent Cloud Pulse survey. Our survey asked 1,497 IT professionals about their use of and attitudes toward public, private and hybrid cloud, and the results indicated that respondents continue to be drawn to public cloud due to several advantages it has over on-premises deployments (such as increased infrastructure availability, scalability, cost management and the “as a Service” model).

Also worth noting is that two months ago, another IDC analyst released a forecast for global public cloud services spending over the same time period. Worldwide, revenue is expected to shoot up to $100 billion by 2016 — meaning that U.S. cloud revenue may account for almost half of worldwide spending. So, if there are skeptics still out there, soon enough you may have to leave the country to hear their arguments.

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