Cloud Computing is the new oil of Application hosting and infrastructure planning. The demand for Cloud Computing has skyrocketed in the last half a decade. With increasing demands, businesses have realized the importance of investing in Cloud Platforms. In this article, we will be exploring Cloud Computing Industry spends and other pointers that concern this topic.
Let go ahead and take a look at the pointers we will be touching upon in this article:
- What is Cloud Computing?
- Market Share of Cloud Service Providers
- Cloud Computing Industry Spend
So let us start by understanding what is Cloud Computing in a nutshell. To bluntly define it,
What is Cloud Computing?
‘Cloud Computing is the process of providing cloud solutions or on-demand services like storage, compute, Database, networking etc on a pay as you go basis. Here the consumers can consume these resources through the internet and do not have to worry about maintaining or monitoring these services’.
To elaborate more on the definition, Cloud Computing lets you rent resources like compute, storage, networking etc. where you pay only for the resources you use and only for the time duration you use those resources for. With the ability to access these resources through the internet, you are not location bound. This means that you can fire up your laptop and start using these services from your existing location. Cloud Computing gives you resource management, and instant scalability meaning you do not have to worry about fluctuating data or traffic.
These features of scalability, pay as you go model, and vendor-based management and support means you get rid of all the major shortcomings associated with a normal On-Premise infrastructure. This is the reason why we see organisations migrating to Cloud and there is a spike in the interest of people wanting to make a career in the cloud computing domain.
This spike is not only common to people wanting to make a career in the domain but also people who plan to invest in this domain from a business perspective. Let us go ahead and understand what are popular platforms in this domain. And how do they stand from a cloud market perspective?
The market of Cloud Service Providers
Talking of Cloud Service providers, these are the vendors that provide the above-mentioned cloud computing services. There are plenty of Cloud Service providers in the market. However, there are few platforms that have gained a huge amount of popularity and have had a larger market share in the domain. Let us take look at some of the statistics. The image below shows Cloud Market leaders in terms of Cloud Services they provide.
From the image above it is clearly visible Amazon Web Services, Microsoft Azure and Google Cloud Platform are the market leaders in IaaS and PaaS public domain. IBM, Rackspace and NIT lead the way in Hosted Private Cloud Domain. Cloud services are also provided in other forms and it is visible that there are leaders in those domains from the graphs below.
This was about Market growth and shares in general terms. Let us go ahead and discuss Market share and IT spends of Companies from a granular perspective.
Cloud Computing Industry Spend
Talking of Industry spends, let us take a look at last year’s statistics. The statistics stated that Public cloud would have most of the majority of market share. And that was indeed correct. Public Cloud Market shares dominated in 2019 and more than per cent of the business that invested in the cloud had a share in Public Cloud Investments. It was followed by a private cloud and they too had a share in IT spending on Cloud. It was confirmed that 70 per cent of businesses also invested in private and Hybrid Cloud. (Note: hybrid clouds are those cloud, which is a combination of resources residing on both public and private clouds)
Talking of Investment Gartner forecasted that by 2021 the Public Clouds will potentially have 260+ billion US dollar investment. Whereas IDC stated that by 2023 the number is expected to Skyrocket to 500+ billion. This should paint a picture of the popularity of Public Cloud in the Business World.
Digging dip into these statistics, let us see what do the statistics say about the investments in different service domains of these public domains.
SaaS (Software as a Service) had more than 50 per cent of public cloud investments. Whereas IaaS (Infrastructure as a Service) was second on this list, thus making PaaS (Platform as a Service) the last on this list.
SaaS Market Share and IT Spend
SaaS is one of those service models that was known to the world the earliest. And it leads the way in terms of profit made by companies and also the investment that has happened. We have already discussed the fact SaaS had a larger market share. One of the reasons for it is the profits the businesses have made by investing in this domain. Q1 of 2019 showed the companies made a revenue in access of 23 Billion US dollars in a quarter.
Many vendors dominated the SaaS Cloud Market. The Key ones were Microsoft Azure, Salesforce, Adobe, SAP etc.
Microsoft Azure has acquired largest amount of SaaS market in 2019 with more than 15 per cent of the market with an annual growth of 34%. Most by any vendor. Hence we see it closing in on Amazon Web Services in overall Public Market share.
Second on this list was Salesforce with 12% of market share in SaaS domain and also showed an overall annual growth of 21 percent. Third and fourth on this list are Adobe and SAP with 10 and 6 percent of the market share in this particular domain. Oracle found the fifth position on the list with 6 percent of market share as well.
Here is another image confirming the statistics we discussed above,
This does paint a pretty picture for SaaS Cloud. However, the picture has other faucets or sides that are worth looking into. SaaS does show of lot promise, however, it still owns just 20 per cent of the overall market. Companies out there are still largely based on, on-premise infrastructures. The comfort of not letting go of their security concerns and the familiarity of on-premise infrastructure could be one of the major reasons we see this. In recent times we have seen SaaS vendors pitching SaaS proposals and we see positives of people migrating to SaaS on larger fronts.
Let us take look at some infrastructure statistics for Cloud Computing. If we are to look into Gartner statistics, Gartner states that IaaS shows 31.3% of growth which is $32.4 billion from $24.7 billion in 2017.
The market has been dominated by five vendors that contribute almost 80% of the IaaS market. These vendors are:
- Amazon Web Services by Amazon
- Microsoft Azure Cloud Platform
- Alibaba Cloud Platform
- Google Cloud Platform
- IBM Cloud
Amazon Web Services
Amazon Web Services leads the Public Cloud Market by a margin. It holds more than half the world public cloud infrastructure. Amazon Web Services has dominated this market for quite a few years
This platform has shown great leaps in the SaaS market as discussed already. Microsoft Azure has also shown tremendous growth in Public and IaaS cloud market in recent times.
It has shown more than 70% growth last year. And it is expected to continue at this rate this year too.
Cloud platforms like Google Cloud Platform and Alibaba have it on list with taking up third and Fourth Positions respectively.
Taking about the PaaS market, Cloud Spends have soared here as well. In 2019 Platform as a Service generated $20 billion in terms of revenue. And it is expected to double by 2022. Now that is some number to note. However, when it comes to comparing it with other service models in terms of global spend or growth, the predictions, for now, are flat and do not show to boast for.
This brings us to the end of this article on Cloud Computing Industry Spends. I hope you know by now where the Cloud Market is heading. If this spiked up your interest in Cloud Computing. Then this is the best time to invest in Cloud Computing. So keep pursuing your cloud dream by learning about different Cloud Service providers in the market.
In case you have queries related to the topic discussed or to Cloud Computing in general. Then do let us know by putting those in the comment section below and somebody from our team will revert with a response at the earliest. Happy Learning!