Cloud Computing Revenue Expected To Reach $20 Billion By 2016

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 Cloud Computing market revenue is expected to reach $20 billion by the end of 2016. That’s according to a report by Market Monitor.

The report projects a five-year growth rate, from 2012 through 2016, for the various cloud alternatives, including Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS). The report also provides a competitive outlook for the industry and forecasts for revenue from more than 300 service providers and vendors.

The forecast is comprehensive. It factors in the strengths and weaknesses of the various market participants. It also provides what’s characterized as a “holistic” view of the market.

“Cloud computing is on the upswing and demand for public cloud services remains strong,” said Yulitza Peraza, an analyst who was part of the research team. “However, public cloud adoption continues to face hurdles including security concerns, transparency and trust issues, workload readiness and internal non-IT-related organizational issues.”

The report also includes other key findings:

  • IaaS took the majority of the market share in 2012. That includes more than half of revenue generated from public cloud services. IaaS will see a 37% annualized growth rate through 2016.
  • PaaS comprises almost a quarter (24%) of public cloud revenue. However, that segment of cloud computing will grow the fastest with an annualized growth rate of 41% between 2012 and 2016.
  • SaaS, excluding enterprise software, was right at a quarter (25%) of cloud revenue in 2012. That segment is expected to grow at a 29% annualized growth rate through 2016.

Greg Zwakman is the Research Director at 451 Research, a company that helped conduct the study. He said that several so-called “mid-market” vendors are actually “titans in their core IT sectors.” He said that it might be too early to predict how well these companies will perform in the near future.

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