Public Cloud Market to Swell to $411 Billion in 2020

These days, it’s good to be a public cloud services company.

In a new Gartner forecast, the analyst firm predicted that the world’s public cloud services providers will generate $260.2 billion in sales this year, an 18.5-percent annual increase. By 2020, that figure is expected to jump to $411.4 billion.

Cloud Storage and Backup Benefits

Protecting your company’s data is critical. Cloud storage with automated backup is scalable, flexible and provides peace of mind. Cobalt Iron’s enterprise-grade backup and recovery solution is known for its hands-free automation and reliability, at a lower cost. Cloud backup that just works.

SCHEDULE FREE CONSULT/DEMO

A good portion of that—nearly $100 billion—will be driven by enterprises that are increasingly entrusting their business application workloads to the public cloud.

“SaaS [software as a service] revenue is expected to grow 21 percent in 2017 to reach $58.6 billion. The acceleration in SaaS adoption can be explained by providers delivering nearly all application functional extensions and add-ons as a service,” stated Gartner. “This appeals to users because SaaS solutions are engineered to be more purpose-built and are delivering better business outcomes than traditional software is.”

The platform as a service (PaaS) segment is also catching on, noted Gartner research director Sid Nag. “Strategic adoption of platform as a service offerings is also outperforming previous expectations, as enterprise-scale organizations are increasingly confident that PaaS will be their primary form of application development platform in the future.”

The PaaS category is expected to rake in 11.4 billion this year, up from $9 billion in 2016. By 2020, PaaS providers will generate $20.8 billion in revenue.

In terms of sheer size, the cloud advertising segment is the largest and will remain at the top of the heap for the foreseeable future. The category will generate $104.5 billion in 2017, up from $90.3 billion last year, and balloon to $151.1 billion in 2020.

Intensifying demand for public cloud services is having a profound effect on how data center hardware and software vendors conduct business.

In September, Synergy Research observed that the data center infrastructure market had surpassed $30 billion amid a public cloud boom. In aggregate, the revenues of HPE, Dell, Cisco, original design manufacturers (ODMs) and other vendors that cater to public cloud providers, saw a 35-percent jump in the second quarter of 2017 compared to the same period in 2015.

In light of this, it’s only natural that demand for traditional data center solutions is slipping.

“Spending on hardware and software used to build public cloud continues to grow strongly, while spending on traditional non-cloud infrastructure is on the decline. With own-designed hardware manufactured by ODMs [original design manufacturers] now being such a big feature of public cloud infrastructure, these trends are ratcheting up the competitive pressure on the mainstream server, storage and networking vendors,” said John Dinsdale, chief analyst and research director at Synergy Research Group.

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

RELATED NEWS AND ANALYSIS

• Huawei’s AI Update: Things Are Moving Faster Than We Think

  FEATURE |  By Rob Enderle,
  December 04, 2020

• Keeping Machine Learning Algorithms Honest in the ‘Ethics-First’ Era

  ARTIFICIAL INTELLIGENCE |  By Guest Author,
  November 18, 2020

• Key Trends in Chatbots and RPA

  FEATURE |  By Guest Author,
  November 10, 2020

• Top 10 AIOps Companies

  FEATURE |  By Samuel Greengard,
  November 05, 2020

• What is Text Analysis?

  ARTIFICIAL INTELLIGENCE |  By Guest Author,
  November 02, 2020

• How Intel’s Work With Autonomous Cars Could Redefine General Purpose AI

  ARTIFICIAL INTELLIGENCE |  By Rob Enderle,
  October 29, 2020

• Dell Technologies World: Weaving Together Human And Machine Interaction For AI And Robotics

  ARTIFICIAL INTELLIGENCE |  By Rob Enderle,
  October 23, 2020

• The Super Moderator, or How IBM Project Debater Could Save Social Media

  FEATURE |  By Rob Enderle,
  October 16, 2020

• Top 10 Chatbot Platforms

  FEATURE |  By Cynthia Harvey,
  October 07, 2020

• Finding a Career Path in AI

  ARTIFICIAL INTELLIGENCE |  By Guest Author,
  October 05, 2020

• CIOs Discuss the Promise of AI and Data Science

  FEATURE |  By Guest Author,
  September 25, 2020

• Microsoft Is Building An AI Product That Could Predict The Future

  FEATURE |  By Rob Enderle,
  September 25, 2020

• Top 10 Machine Learning Companies 2020

  FEATURE |  By Cynthia Harvey,
  September 22, 2020

• NVIDIA and ARM: Massively Changing The AI Landscape

  ARTIFICIAL INTELLIGENCE |  By Rob Enderle,
  September 18, 2020

• Continuous Intelligence: Expert Discussion [Video and Podcast]

  ARTIFICIAL INTELLIGENCE |  By James Maguire,
  September 14, 2020

• Artificial Intelligence: Governance and Ethics [Video]

  ARTIFICIAL INTELLIGENCE |  By James Maguire,
  September 13, 2020

• IBM Watson At The US Open: Showcasing The Power Of A Mature Enterprise-Class AI

  FEATURE |  By Rob Enderle,
  September 11, 2020

• Artificial Intelligence: Perception vs. Reality

  FEATURE |  By James Maguire,
  September 09, 2020

• Anticipating The Coming Wave Of AI Enhanced PCs

  FEATURE |  By Rob Enderle,
  September 05, 2020

• The Critical Nature Of IBM’s NLP (Natural Language Processing) Effort

  ARTIFICIAL INTELLIGENCE |  By Rob Enderle,
  August 14, 2020