If 2015 was the year when cloud went mainstream, “I’d say that 2016 is the year that cloud started to dominate many IT market segments,” said Synergy Research Group’s Chief Analyst Jeremy Duke in a statement.
A new report from Synergy, which looked at operator and vendor revenues for the four quarters ending September 2016, showed strong growth in all six market segments. Collectively, these segments showed 25% growth, annualized, for a total of $148B.
Market Segments By the Numbers
The segment with by far the highest growth was Infrastructure-as-a-Service & Platform-as-a-Service. Iaas and PaaS is the driving force behind cloud adoption, and it’s quite welcome news to see 53% growth last year. This robust growth shows that more and more companies can run on infrastructure they don’t own, making many more agile and competitive.
But, that’s not all. Hosted Private Cloud and Enterprise SaaS both showed growth of 35% and 34% respectively. Where IaaS and PaaS might indicate a plethora of small, hungry companies seizing a competitive advantage, these two segments are indicative of major players shifting confidently towards cloud infrastructure.
Both the Public and Private Cloud sectors growing, but no more than you’d expect, given that the cloud is increasingly the first and only choice when it comes to hosting.
Cloud Services > In-House Infrastructures
Cloud has come to dominate the landscape, but 2016 was the first year that spending on cloud services exceeded spending on hardware and software. Not only exceeded, but, “In aggregate cloud service markets are now growing three times more quickly than cloud infrastructure hardware and software,” according to the report.
While we might be biased, in our view this only bodes well for the client who makes use of cloud services. Such strong adoption shows that it is perfectly beneficial to transfer these IT services to specialist vendors and thereby renew internal focus on the business itself. In short, we agree completely with the conclusion shared in the report:
“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.”