Gartner Says Public Clouds Puffing Faster Than Expected

September 24, 2012 Timothy Prickett Morgan

The public cloud is huffing and puffing itself up and is trying to blow the IT distribution business down. According to a new projection from Gartner, the myriad kinds of public cloudy services available on the market today will account for $109 billion worldwide. That is up 19.6 percent from 2011’s global public cloud revenues, and higher than the 12 percent growth Gartner was forecasting in prior prognostications.

“The cloud services market is clearly a high-growth sector within the overall IT marketplace,” explained Ed Anderson, research director at Gartner. “The key to taking advantage of this growth will be understanding the nuances of the opportunity within service segments and geographic regions, and then prioritizing investments in line with the opportunities.”

That’s obviously a vendor perspective. The issue for end user organizations will be the ones they have always faced with any new technology: quantifying performance and price and dealing with interoperability issues.

At the moment, Gartner reckons that business process as a service is 77 percent of the total public cloud services market, at $72 billion in 2011 and projected to rise to $84.2 billion in 2012. That number includes Internet-based advertising, in case you were wondering, and that represented 47 percent of the total BPaaS segment, and therefore a little more than 37 percent of the whole public cloud pie for the 2012 projection. Cloud ad spending is expected to remain at about the same level within the BPaaS segment through the projection Gartner is making from 2011 through 2016.

Software as a service, or SaaS, or infrastructure as a service, or IaaS, are what most people think of when they hear the words “public cloud” if they are not thinking of Amazon EC2. IaaS is growing like a rocket, and is expected to see a 45.4 percent boost in 2012, rising from $4.3 billion last year to $6.4 billion this year. SaaS services collectively will rake in $14.4 billion this year, and Gartner expects that SaaS and IaaS services will generate about the same revenues in 2016. Platform as a Service (PaaS) clouds, where you don’t give people raw virtual servers and storage, but rather database, Web, and other functions as a service that the cloud provider operates, will hit $1.2 billion this year, while cloud management and related securities services running in the heavens will account for $3.3 billion in revenues.

Over the span of the projection, Gartner expects for public cloud services revenues to grow from $91.4 billion to $206.6 billion by 2016. Personally, I think putting advertising in there is a pretty generous thing. Most people don’t think of advertising as part of the IT budget.