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Robust Growth Expected for Public IT Cloud Services

Robust Growth Expected for Public IT Cloud Services
By Mark Long

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As IT departments become more comfortable with public clouds, spending is expected to rise quickly, creating what IDC calls a "third major platform for long-term growth." Public cloud services are expected to gain security and availability to match private clouds. Personal and business computing will blend in personal clouds like Apple's iCloud.
 


IDC forecasts that spending on public IT cloud services will rise to $72.9 billion in 2015, up from $21.5 billion in 2010 and equivalent to a compound annual growth rate of 27.6 percent. By the end of the forecast period, moreover, one of every seven dollars spent on packaged software, servers and storage offerings will be related to the public cloud model.

However, the overall impact of cloud services will extend well beyond IT spending, because cloud services are increasingly becoming interconnected with and accelerated by other disruptive technologies, including mobile devices, wireless networks, big data analytics, and social networking, noted IDC Senior Vice President Frank Gens.

"Together, these technologies are merging into the industry's third major platform for long-term growth," Gens said. "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."

Blurring Boundaries

Unlike private cloud deployments, which are dedicated to the access limits and resource-allocation requirements of a specific customer, public IT cloud services are designed for -- and commercially offered to -- a largely unrestricted marketplace of potential users. IDC anticipates that as public clouds mature, they will eventually incorporate many of the capabilities -- particularly security and availability -- that make private clouds the most attractive option for enterprise use today.

Apple's recently announced iCloud initiative is just one example of how the boundaries between personal and business computing will be blurred through the creation of personal cloud experiences across multiple computing devices and peripherals. One continuing challenge for enterprises will be to define the extent to which they will interface with -- and even directly participate in -- the public and personal cloud services arising around them.

According to Forrester Research, personal clouds will represent a $12 billion market by 2016, of which $6 billion will come from direct subscriptions. The personal cloud concept "will redefine the computing experience around a user's personal and work information, so that it's seamlessly accessible across all of an individual's devices," noted Forrester's Frank Gillett in a recent blog.

U.S. Dominance

IDC predicts spending on Public IT cloud services will rise at more than four times the rate of overall IT spending in the next five years. What's more, the research firm forecasts that public cloud services will account for 46 percent of net IT spending growth on applications, app development and deployment, systems infrastructure software, basic storage, and servers in 2015.

Spending on public IT clouds in the United States alone is expected to account for nearly 50 percent of the revenue generated worldwide by these services. Earlier this year, IDC forecast that U.S. public IT cloud services revenue would reach $29.5 billion in 2014.

The firm's analysts believe U.S. spending on public IT cloud applications will account for 33 percent of revenue in 2014, with infrastructure accounting for 22 percent. What's more, they predict that revenue growth in the U.S. services and distribution sector -- which includes retail, wholesale, professional services, consumer and recreational services as well as transportation -- will more than double to $8.5 billion in 2014.

Despite U.S. dominance in public cloud services, even stronger growth is expected in other world regions as cloud services adoption accelerates. The latest research by IDC revealed that end-user spending in Asia-Pacific and western Europe is higher than previously thought, and these regions also have a surprising number of cloud vendors.
 

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