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January 5, 2018

IaaS & PaaS markets grow at 47% as cloud tech rakes in $180bn

Cloud becomes the "new normal" in 2017.

By James Nunns

2017 proved to be yet another bumper year for the cloud market, with research showing that the market grew by 24% on an annualised basis.

The growth rate means that across six key cloud services and infrastructure market segments for the four quarters ending September 2017 the market reached $180bn.

IaaS and PaaS grew at a staggering 47% with SaaS at 31% and hosted private cloud infrastructure services at 30%.

Basically, everything is going pretty well for all of the cloud market segments.

The seemingly never ending forward march of the cloud industry was highlighted in 2016, when spend on cloud services overtook spend on hardware and software used to build public and private clouds. The growth seen last year continued to widen that gap, seeing cloud service markets (in aggregate) growing over three times more quickly than cloud infrastructure hardware and software.

cloud 2017 synergy research group. IaaS & PaaS markets grow at 47% as cloud tech rakes in $180bn

From Q4 2016 to Q3 2017 the total spend on hardware and software to build cloud infrastructure came to almost $80bn, split evenly between public and private cloud, although according to the Synergy Research Group the spend on public cloud is growing more rapidly.

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Thanks to investments on infrastructure, cloud service providers managed to generate over $100bn in revenues from IaaS, PaaS, hosted private cloud services, and enterprise SaaS – in addition to all the internet services a provider supports.

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“We tagged 2015 as the year when cloud became mainstream and 2016 as the year when cloud started to dominate many IT market segments. In 2017 cloud was the new normal,” said John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group.

“Major barriers to cloud adoption are now almost a thing of the past, with previously perceived weaknesses such as security now often seen as strengths. Cloud technologies are now generating massive revenues for cloud service providers and technology vendors and we forecast that current market growth rates will decline only slowly over the next five years.”

 

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