Cloud Market on Track to Cross $150 Billion Mark

Brisk IaaS and PaaS demand helped cloud providers reach new heights last year, finds Synergy Research.


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The results are in. According to analysis of the cloud computing market from Synergy Research, revenues are close to hitting the $150 billion milestone.

Across the board, cloud consumption was up last year. In total, cloud vendors generated $148 billion in sales during the four quarters ending Sept. 30, 2016, a 25 percent increase on a yearly basis. The market also reached a crucial tipping point in 2016, observed, Synergy Research chief analyst and research director John Dinsdale.

"Among the segments, IaaS/PaaS [Infrastructure as a Service/Platform as a Service] saw the highest growth rates and for the first time cloud services in aggregate generated more revenue than hardware and software used to build cloud infrastructure," Dinsdale said. In the period spanning the fourth quarter of 2015 and the third quarter of 2016, cloud infrastructure spending hit $65 billion. Meanwhile, cloud vendors raked in an estimated $70 billion.

"Cloud usage had already entered the mainstream and now cloud is starting to dominate IT markets – and what's more high growth rates will persist for many more years," he continued.

cloud computing

Amazon and Microsoft are the IaaS and PaaS services leaders. Collectively, the segments are growing at a rate of 53 percent each year. IBM and Rackspace sit atop the hosted private cloud space, which is also expanding at brisk pace with a 35 percent increase.

Microsoft and Salesforce reign the enterprise SaaS (Software as a Service) segment, another high-growth category with a 34-percent annual growth rate. Cisco and Citrix dominate the Unified Communications as a Service (UCaaS) segment.

Cisco and Hewlett Packard Enterprise (HPE) are the top providers of hardware and software for public cloud operators. HPE and Dell EMC are the private cloud vendors of choice, observed the analysts at Synergy Research.

All told, the cloud is a big money maker for several IT industry heavyweights.

"We tagged 2015 as the year when cloud became mainstream and I’d say that 2016 is the year that cloud started to dominate many IT market segments," said Jeremy Duke, founder of Synergy Research, in a statement. "Major barriers to cloud adoption are now almost a thing of the past, especially on the public cloud side. Cloud technologies are now generating massive revenues for technology vendors and cloud service providers and yet there are still many years of strong growth ahead."

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.

Tags: cloud computing, Cloud, PaaS, IaaS

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