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October 9, 2009

IDC forecasts five-year 26% cloud services growth

Services delivered from the cloud accounts for 10% IT spend

By CBR Staff Writer

IDC has rated the five-year annual growth outlook for cloud services at 26%, some six times the rate of traditional IT and forecast to be worth almost $45 billion by 2013 when it will account for 10% of all IT revenue.

“In spite of the challenging economy – or more accurately, because of it – this growth rate advantage expanded from last year’s forecast, in which cloud services were forecast to grow at over five times traditional offerings,” IDC’s Frank Gens said in an official blog.

The market-watchers estimate cloud services in the shape of server and storage infrastructure services, applications and application development and deployment are going to produce $17 billion in revenues this year for service providers. IDC reckons this accounts for about 5% of the total IT revenues in those areas. 

Of the $27 billion in net new IT revenue in 2013, 27% will come from IT cloud services, it said.

Earlier in the year Gartner estimated that the cloud market would reach $150 billion in 2013, a figure that includes a much broader set of revenue streams than IDC and includes the likes of cloud-based advertising, e-commerce, human resources and payments processing.

But the analyst group forecasts on growth are in broad agreement, and Gartner proposing it will develop at rate around 22%.

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Cloud computing is a broad and diverse phenomenon though much of the current focus is being centred on early-stage markets like systems infrastructure delivered as a service. 

In another area of application platforms as a cloud services, Gartner has identified at least 45 vendors making inroads. 

Some are familiar brands that are already playing in the enterprise space like Adobe and Cordys or Progress and Rackspace, but there is also an ABC of other firms with names like Apprenda, Bungee Labs and Caspio that are out and out cloud natives.

IDC’s Gens said the consequence for vendors of any background of the emergence of the cloud is clear. “Suppliers who don’t position themselves as IT cloud services leaders over the next several years, will forfeit larger and larger portions of the highest-growth markets.”

IDC noted that applications as a service currently makes up just under half of the cloud market (49%), with infrastructure software as a service making up 20%, server and storage as a service 12% and 9%, respectively, and application development and deployment as a service (application platforms as a services using Gartner’s terms) taking up the remaining 10%. 

These last three categories should gain three percentage points each over the next 4 years, IDC has predicted, at the expense of the applications as a service segment, where the market share will reduce from 49% today to around 38% in 2013.

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