Cloud Market in 2018

by | Nov 3, 2016 | Run Your Business

The global cloud market is expanding at a staggering rate. Companies that have not yet invested on cloud are keen to do so; or might be planning for their doomsday. Companies that have already spent on various cloud computing infrastructure and platforms plan to increase their spending substantially. Driven by significant benefits of business agility, enhanced staff productivity, universal accessibility of applications, high security of critical business data, enterprises are fast adopting cloud-based technologies.

Global Cloud Market: Drivers

With the proliferation of mobile devices across organizations of all sizes and the increasing prominence of business analytics in decision making, cloud market is expected to grow at a fascinating pace through 2018. The myriad benefits of putting enterprise data to cloud has led to the rapid adoption by public sector in various countries. Cloud computing technologies have largely transformed legacy IT infrastructure and garnered widespread adoption by enterprises. As per Goldman Sachs study published in 2015, spending on cloud computing infrastructure and platforms is estimated to grow at a CAGR of 30% from 2013 through 2018; this is significantly higher than the growth rate compared with 5% for the overall enterprise IT market.

Adoption of Cloud Computing Models

Cloud computing is one of the largest technological disruptions to how businesses are run in the next three years. As cloud market is projected for high growth trajectory, the market for different cloud hosting models— Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS)–is also slated to grow rapidly.

SaaS model to witness high adoption

SaaS model has already become a cloud conversation-starter and, undoubtedly, it has stood the test of time. According to prominent industry trends, SaaS is expected to dominate the public cloud landscape through 2018. As per the Cisco Global Cloud Index (GCI), by 2018, 59% of the total cloud workloads will be from Software-as-a-Service (SaaS) hosting model, an increase of 41% from 2013.

Another report by IDC estimates SaaS delivery is expected to significantly outpace traditional software product delivery, growing about five times faster than the traditional software market. Equipped by a host of competitive benefits such as automatic updates, patch management, universal accessibility, SaaS applications have become popular among organizations.

Emergence of IaaS model

Another hosting model that is fast gaining prominence in public cloud market is IaaS. Driven by significant flexibility and unmatched scalability to address enterprise needs, IaaS platform is gaining tractions across businesses with flexible needs. Considered as a viable alternative to on-premises hardware for IT infrastructure, their adoption has largely transformed the complete IT value chain for enterprises. IaaS enables organizations to build virtual infrastructure which can be created, reconfigured, and even removed quickly, as and when required. The virtual infrastructure typically houses resources such as servers, storage arrays, operating systems and networks. The highly scalable resources can then be easily adjusted on-demand.

As per estimate by Cisco, by 2018, 28% of the total cloud workloads will be Infrastructure-as-a-Service (IaaS) workloads down from 44% in 2013. Some of the leading IaaS offerings are from technology giants Amazon, Microsoft and Google; currently, Amazon Web Services (AWS) by Amazon dominates the cloud infrastructure platform and expected to remain so through 2018.

Hybrid Cloud has finally taken off

Over the past couple of years, an emerging trend is towards hybrid cloud model—a combination of public and private cloud. Companies who are in favor of this model wants to play safe as they believe in the strategy ‘One foot in the cloud and one foot on the ground’. Most companies are reluctant to move all their IT needs to public cloud or can afford to take their operations to private cloud; additionally, they want the best of both the clouds and knit altogether a new IT infrastructure. CIOs confer that several comprises are looking towards hybrid cloud model with the best of their own private data centers and partially shared technology resources. The adoption of the hybrid infrastructure is largely driven enhances collaboration, greater flexibility and increased cost-efficiency. According to research firm, MarketsandMarkets, the hybrid cloud market is expected to reach $85 billion in 2019, up from $25 billion in 2014, growing at a significant CAGR of about 27%.

Cloud Forecast 2018

The Way Forward…

The cloud market in 2018 is really headed for significant transformation in adoption of modern IT infrastructure. The market is dotted by leading vendors and new entrants alike who want to capitalize on the growth opportunities brought about by the spiraling cloud market across the globe. With this, security and viability of different hosting models have also become prominent factors to guide CIOs to decide on the most suitable cloud technology for their organizations. Coupled with this, the sheer increase for various cloud computing tools have opened up a plethora of options for businesses keen to move their operations to cloud. It remains to be seen how the companies will reinvent themselves with the growth of the cloud market.

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