Worldwide public cloud revenue to grow 17.5 percent

The worldwide public cloud services market is projected to grow 17.5 per cent in 2019 to total $214.3 billion, up from $182.4 billion in 2018, according to Gartner, Inc.

Wednesday, 3rd April 2019 Posted 5 years ago in by Phil Alsop

The fastest-growing market segment will be cloud system infrastructure services, or infrastructure as a service (IaaS), which is forecast to grow 27.5 per cent in 2019 to reach $38.9 billion, up from $30.5 billion in 2018 (see Table 1). The second-highest growth rate of 21.8 per cent will be achieved by cloud application infrastructure services, or platform as a service (PaaS).

“Cloud services are definitely shaking up the industry,” said Sid Nag, research vice president at Gartner. “At Gartner, we know of no vendor or service provider today whose business model offerings and revenue growth are not influenced by the increasing adoption of cloud-first strategies in organisations. What we see now is only the beginning, though. Through 2022, Gartner projects the market size and growth of the cloud services industry at nearly three time the growth of overall IT services.”

According to recent Gartner surveys, more than a third of organisations see cloud investments as a top three investing priority, which is impacting market offerings. Gartner expects that by the end of 2019, more than 30 per cent of technology providers’ new software investments will shift from cloud-first to cloud-only. This means that license-based software consumption will further plummet, while SaaS and subscription-based cloud consumption models continue their rise.

“Organisations need cloud-related services to get onboarded onto public clouds and to transform their operations as they adopt public cloud services,” said Mr Nag. Currently almost 19 per cent of cloud budgets are spent on cloud-related services, such as cloud consulting, implementation, migration and managed services, and Gartner expects that this rate will increase to 28 per cent by 2022.

“As cloud continues to become mainstream within most organisations, technology product managers for cloud related service offerings will need to focus on delivering solutions that combine experience and execution with hyperscale providers’ offerings,” said Mr Nag. “This complementary approach will drive both transformation and optimisation of an organisation’s infrastructure and operations.”