Off-Premises cloud market size revealed by IHS Markit

Off-Premises cloud services market reached $57 billion in H1 2016, says Cliff Grossner, senior research director, data center, cloud and SDN, IHS Markit.

The meta-cloud discussion has intensified over the last six months, seizing center stage from hybrid cloud as the next phase of cloud services.

Revenue for off-premises cloud services—including software as a service (SaaS), infrastructure as a service (IaaS), cloud as a service (CaaS) and platform as a service (PaaS)—reached $57 billion in the first half of 2016 (H1 2016).

SaaS is currently the number-one off-premises cloud service, representing 44 percent of revenue in H1 2016; however, CaaS and PaaS have the highest compound annual growth rates (CAGRs) through 2020.

Enterprises are turning to off-premises cloud services—to the tune of nearly $286 billion by 2020, a five-year (2015–2020) CAGR of 25 percent.

Off-premises cloud services that provide complete applications, colocation and hosting have been available for many years, and new services that deliver on-demand and agile computing, such as those offering software containers, are still emerging.

Consolidation in the IaaS segment is underway. Leaders in this space have been established and late entrants will need to consider strategic options, from divestiture to specialized offerings that cater to specific verticals.

Starting now and through 2019, the hybrid cloud architecture is anticipated to give way to a distributed architecture, creating meta-clouds.

In these meta-clouds, enterprises will consume services from multiple cloud service providers (CSPs), driving additional cost and performance optimizations. The emergence of a wholesale market for cloud infrastructure is also anticipated.

The drive to leverage machine learning and artificial intelligence (AI) capabilities integrated with enterprise and mobile applications continues to mushroom—with new services available from Microsoft, SAP and Salesforce, coupled with the expansion of existing offers from Amazon, Google and IBM.

IHS Markit said the most noteworthy is the deployment of specialized silicon for processing machine learning and AI algorithms by Google (Tensor), and IHS Markit expects to see more specialized silicon developed and deployed in the next 24 months.

Related News

Latest News

Latest News