IDC: Cloud Services Spending To Outpace IT Products Through 2014

If market analyst group IDC is right, cloud services revenue is poised to skyrocket, jumping from $16 billion last year worldwide to $55.5 billion by 2014. Thats a compound annual growth rate of 27.4 percent, more than five times that of traditional IT products over the same four-year period.

These eye-popping statistics come from a study called Worldwide and Regional Public IT Cloud Services 2010-2014 Forecast, which segments its coverage into five functional categories across eight regions or countries.

The report says public IT cloud services will hit 12 percent of the traditional IT product pending by 2014, but will make up over 25 percent of the net-new growth for these IT products, which means the smart money for IT vendors is on investing according to this net-new growth impact, instead of cloud services revenue. Though cloud applications dominated in 2009 among the five segments surveyed, IDC predicts a more even distribution of revenue to these other segments. The application segment, which currently takes up a little over one-third of overall market revenue, will diminish as the infrastructure-as-a-service and platform-as-a-service market grows. And customer adoption of cloud services will spread beyond the U.S., where growth predominates today, at 70.2 percent (for 2009). By 2014, IDC expects that number to fall to 51.4 percent, while other regions or countries such as Western Europe and Asia/Pacific (but not Japan) pick up the slack.

For vendors, cloud computing is critically important for two key reasons market growth and leadership disruption, said Frank Gens, senior vice president and chief analyst at IDC. The cloud model will propel IT market growth and expansion for the next 20 years and will help the industry to more rapidly develop and distribute a new generation of killer apps, and to more successfully penetrate small and medium-sized businesses.

As this happens, industry leadership ranks will certainly change. Additionally, our research with many CIOs about their plans for adopting cloud computing shows that IT customers are excited about the cost and agility advantages of cloud computing, but they also have serious concerns about the maturity of cloud computing offerings, specifically around security, availability, cost monitoring/management, integration, and standards.

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