We Have The Whole World Of Cloud In Our Hands
October 18, 2021 Timothy Prickett Morgan
Cloud is a consumption model more than anything else, but it is also an architecture. What that really means is that for a lot of customers, on premises cloud is a bit different from what are called “public” clouds, which we all know are as proprietary as any System/3X or AS/400 or IBM i on Power Systems ever was. There ain’t nothing at all public about it, and we are trying to break the habit of calling them that. The point is, the big clouds outside of your datacenter look like power utilities, with pricing based on both time and capacity, and the cloud inside your datacenter looks more like a power generator when it is burning diesel.
Still, it is useful to ignore some of these differences and to try to get a handle on just how much money the world is spending on cloud capacity in its various forms. So the market researchers at IDC sat down and peeled apart a whole bunch of different trackers that they do for various aspects of the IT business to put together a forecast of the “worldwide whole cloud” spending between 2021 and 2025. This is an expensive report, but IDC put a teaser out that let’s us get some insight into how the cloud market is shaped.
IDC has some interesting language to describe this all. To make the distinctions, IDC is calling what used to be public clouds “shared cloud services.” And what we used to call on premises clouds is now being referred to “dedicated cloud services,” and this does not include gear that is purchased in any year to run virtualized and possibly containerized cloudy services for the company through the captive IT department, but it does include any hardware and software that supports these functions that is delivered using a cloudy pricing metric. This is what Hewlett Packard Enterprise calls its GreenLake pricing and what Dell calls its Apex pricing and what we have been calling cloud outposts after the service that Amazon Web Services has been offering for a couple of years. This is a good distinction, and we are going to have a think about how we might adopt it. We still like cloud outposts for this distinction, and think that infrastructure that a company owns to build its own clouds could be called dedicated cloud services.
Let’s drill into this a bit. First, take a look at this image for a view of the overall “whole cloud” market:
As you can see, the “as a service” parts of the cloud market are expected to dominate the “whole cloud” spending in 2021, comprising $385 billion worldwide and including infrastructure, system infrastructure software, platform, and software as a service – what are commonly abbreviated as IaaS, SISaaS, PaaS, and SaaS. This part of the market has a compound annual growth rate of 21 percent between 2021 and 2025, and will reach $809 billion at the end of the forecast period.
The dedicated cloud services – what we call cloud outposts, is starting from a much smaller base of $5 billion in 2021, but will have a 31 percent compound annual growth rate of 31 percent, which by our math means it will reach about $14.8 billion in 2025.
Now, if you take into account professional services and managed services – these are shown in green in the pie charts above – for cloudy wares and add it all up, then the whole market is $706.6 billion in 2021 and will rise to $1.3 trillion by 2025, which works out to a compound annual growth rate of 16.9 percent.
This may not be a perfect way to think about cloud spending, but it is better than any other market casing we have seen in a long while.