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Microsoft Cloud Authors: David H Deans, Yeshim Deniz, Janakiram MSV, Andreas Grabner, Stackify Blog

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Public Cloud Services Will Gain New Momentum in 2013

The fastest growth in public IT services spending will be in the emerging markets

As 2012 draws to a close, a growing number of savvy enterprise CIOs -- and perhaps even more Line of Business leaders -- are joining the momentum towards an increase in the mainstream adoption of managed cloud services.

Furthermore, the near-term market outlook for 2013 is particularly bright and the long-term expectations are equally promising -- due mostly to the reported positive experience and results from the early adopters of cloud services across the globe.

Peer recommendations are clearly driving this change in the marketplace.



Worldwide spending on public IT cloud services will be more than $40 billion in 2012 and is expected to approach $100 billion in 2016, according to the latest market study by International Data Corporation (IDC).

Over the 2012–2016 forecast reporting period, IDC believes that public IT cloud services will enjoy a compound annual growth rate (CAGR) of 26.4 percent, that's five times the traditional IT industry, as more business leaders accelerate their shift to the cloud services model for IT applications.

Forward-Looking Transformation in Action

"The IT industry is in the midst of an important transformative period as companies invest in the technologies that will drive growth and innovation over the next two to three decades," said Frank Gens, senior vice president and chief analyst at IDC.

By the end of the decade, IDC anticipates at least 80 percent of the evolving IT industry's growth, and the highest-value gained from business technology overall, will be driven by cloud services and the other third platform technologies.

By 2016, public IT cloud services will account for 16 percent of IT revenue in five key technology categories: applications, system infrastructure software, platform as a service (PaaS), servers, and basic storage.

More significantly, cloud services will generate 41 percent of all growth in these categories by 2016.

Software as a service (SaaS), which is the combination of applications as a service and system infrastructure software as a service, will claim the largest share of public IT cloud services spending over the next five years.

But other categories, notably basic storage and platform as a service (PaaS), will show faster growth. Accelerating PaaS deployments over the next 12-18 months will be critical to maintaining the continued managed cloud services momentum.

Focus Areas for Incremental Service Adoption

Geographically, according to the IDC assessment, the United States will remain the largest public cloud services market, followed by Western Europe and Asia-Pacific (excluding Japan).

But the fastest growth in public IT services spending will be in the emerging markets, which will see its collective share nearly double by 2016 when it will account for almost 30 percent of net-new public IT cloud services spending growth.

IDC defines public IT cloud computing services as those offerings designed for, and commercially offered to, a largely unrestricted marketplace of potential users. Note, this IDC forecast does not include revenue from private cloud deployments, which are dedicated to a specific customer.

While private clouds provide the customer with the ability to specify access limitations and the level of resource dedication beyond what is currently available in public cloud offerings, IDC's expectation is that public clouds will mature and eventually incorporate many of the capabilities -- particularly security and availability.

More Stories By David H Deans

David H. Deans is the Managing Director at the GeoActive Group. He has more than 25 years of experience in the Technology, Media and Telecom sectors.

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