Public IT Cloud Services Spending Ready for Growth Spurt

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Cloud computing will continue to reshape the IT landscape over the next five years as spending on public IT cloud services expands at a compound annual growth rate (CAGR) of 27.6 percent, from $21.5 billion in 2010 to $72.9 billion in 2015. That’s according to the latest research from International Data Corporation (IDC).

But the impact of cloud services will extend well beyond IT spending, the firm says. Cloud services are a critical component in a much larger transformation that IDC expects will drive IT industry growth for the next 25 years.

"Cloud services are interconnected with and accelerated by other disruptive technologies, including mobile devices, wireless networks, big data analytics, and social networking," said Frank Gens, senior vice president and chief analyst at IDC. "Together, these technologies are merging into the industry's third major platform for long-term growth. As during the mainframe and PC eras, the new platform promises to radically expand the users and uses of information technology, leading to a wide and entirely new variety of intelligent industry solutions."

As a critical component to the third platform, cloud services represent a strategic growth area for virtually all IT vendors. With spending for public IT cloud services growing at more than four times the rate of the worldwide IT market as whole, IDC expects one of every seven dollars spent on packaged software, servers, and storage offerings in 2015 will be related to the public cloud model. Moreover, the winners of the cloud platform wars will likely be the new power brokers of the IT industry.

IDC also predicts that in 2015, public cloud services will account for 46 percent of net new growth in overall IT spending in five key product categories – applications, application development and deployment, systems infrastructure software, basic storage, and servers; software-oriented cloud services (SaaS) will account for roughly three quarters of all spending on public cloud IT services throughout the forecast; and the U.S. will dominate overall spending throughout the forecast period, with nearly 50 percent of all public IT cloud services revenues coming from the U.S. in 2015.

IDC defines public IT cloud services as those offerings designed for, and commercially offered to, a largely unrestricted marketplace of potential users. The forecast does not include revenue from private cloud deployments, which are dedicated to a specific customer. While private clouds provide the customer with the ability to specify access limitations and the level of resource dedication beyond what is currently available in public cloud offerings, IDC's expectation is that public clouds will mature and eventually incorporate many of the capabilities (particularly security and availability) that make private clouds a more attractive option today.

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