August 12, 2016

IDC report claims worldwide revenues of cloud services could hit $195 billion by 2020

The expected growth will be more than 2x the $96.5 billion in revenues forecast for 2016

A new update to the Worldwide Semiannual Public Cloud Services Spending Guide from International Data Corporation (IDC) shows worldwide revenues from public cloud services reaching more than $195 billion in 2020.

Cloud software – which includes service products in three primary software markets namely, i. applications as a service, ii. system infrastructure software (SIS) as a service (which combine to form SaaS), and iii. application development and deployment (AD&D) or platform as a service (PaaS) – was responsible for 83.7% of all public cloud revenue in 2015, with the remaining 16.3% belonging to infrastructure as a service (IaaS). However, IaaS and PaaS revenues are forecast to grow at a faster rate than SaaS, expanding their share of overall revenues in the process.

Benjamin McGrath, senior research analyst, SaaS and Business Models, commented:

Cloud software will significantly outpace traditional software product delivery over the next five years, growing nearly three times faster than the software market as a whole and becoming the significant growth driver to all functional software markets. By 2020, about half of all new business software purchases will be of service-enabled software, and cloud software will constitute more than a quarter of all software sold.

Eileen Smith, Program Director, Customer Insights and Analysis, added:

Cloud computing is breaking down traditional technology barriers as line of business leaders and their IT organizations rely on cloud to flexibly deliver IT resources at the lower cost and faster speed that businesses require. Organizations across all industries are now free to adapt to market changes quicker and take more risks, as they are no longer bound by legacy IT constraints

The report adds that the United States will be the largest market for public cloud services, generating nearly two thirds of total worldwide revenues throughout the forecast, followed by Western Europe and Asia/Pacific (excluding Japan)(APeJ). Latin America and APeJ will experience the greatest revenue growth over the forecast period, while all eight regions are forecast to see revenue growth greater than 100% over the next five years.

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