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Cloud Services to Reach $100B Globally by 2016: IDC

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Cloud Services to Reach $100B Globally by 2016: IDC

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December 31, 2012
By Peter Bernstein
Senior Editor

Oh, how far cloud services have come.

What once was a crazy idea championed by Oracle founder Larry Ellison (News - Alert) and others is now expected to become a $100-billion industry by 2016, according to a new study by IDC (News - Alert).


 Currently cloud services account for $40 billion worldwide.

"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," Frank Gens, senior vice president and chief analyst at the company, said in a statement by IDC.

"By the end of the decade, IDC expects at least 80 percent of the industry's growth, and enterprises' highest-value leverage of IT, will be driven by cloud services and the other 3rd Platform technologies," he added.

Public IT cloud services will experience a compound annual growth rate (CAGR) of 26.4 percent through 2016 – five times the IT industry overall – as companies accelerate their shift to the cloud services model for IT consumption.

All major verticals were examined, including financial services, manufacturing and resources, services, distribution and retail, communications and media, government, education and healthcare.

One of the fastest-growing verticals in the cloud services sector is communications and media, the report noted. The report said that the media portion of the communications and the media vertical are and continue to be the main users of storage on demand to “enable continuous service for content-heavy customer offerings,” according to an article in Integration Developer News.

“According to our research, the three verticals that accounted for more than 50 percent of the spending in 2011 are discrete manufacturing, professional services, and process manufacturing,” noted Eileen Smith, program manager in IDC’s Global Technology (News - Alert) and Industry Research Organization. “This is not surprising as these industries are typically less risk averse and compliance focused.”

The reported found that the largest sector, services and distribution, accounted for more than 30 percent of total revenue in 2011, and professional services alone accounted for nearly 40 percent of the entire category in 2011.

The second-largest vertical, manufacturing and resources, accounted for 24 percent of total public IT cloud services in 2011. Discrete manufacturing accounted for 46.7 percent.

Also, noted Integration Developer News, infrastructure accounted for more than 12 percent of spending in 2011, and will account for nearly 13 percent by 2016.

The United States is expected to remain the largest public cloud services market followed by Western Europe and Asia/Pacific, not including Japan, the report suggests. When it comes to public IT services spending, however, the fastest growth is expected to come from 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.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida.  Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.




Edited by Braden Becker

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