The global cloud services market is expected to grow at a CAGR of 17.6% from 2014 to 2020, reaching a market size of $555bn in 2020.
In 2014, the overall cloud services market revenue will reach $209.9bn, led by public cloud services. The US is seen as the biggest market because of its technology lead in research from US-based Allied Market Research.
The reduction of the total cost of ownership on deployment of cloud services acts as the major driver for the adoption of public clouds. This market attracts numerous new entrants due to liberal government regulations in mature economies. Private cloud will have fastest growth during the period, it predicts, whereas hybrid and community cloud services will gain gradual momentum with steady adoption within specialised end use segments.
The cloud computing market surged during recent economic slowdown; with the fact that over 35% of the IT cost can be saved with the adoption of the technology. Since then the cloud services segment has greatly emerged as companies in a cash crunch required cost-effective solutions with minimum to zero investment and reduced management of IT resources.
Although the cost and functional benefits such as scaling ability and multi-tenancy is still driving much of the cloud services market growth, the evolution of much value-creating productive solutions has become the current growth function of the market. The cloud, from an exploratory potential option, has now grown to become the undeniable part of organisations' overall IT portfolio. However, data security has still concerned a number of sensitive potential end users.
Strong growth is anticipated within the varied segments of cloud services market such as infrastructure as a service (IaaS), software as a service (SaaS), platform as a service (PaaS), business process as a service (BPaaS), cloud advertisement services, and cloud management & security services. Cloud advertising services will be the largest segment followed BPaaS with about 47% and 28% market share respectively in 2013. The cloud management & security services will be the fastest growing segment at a CAGR of 28.4% during the forecast period.
On the basis of cloud type the market is categorized as public cloud, private cloud, hybrid cloud and community cloud. Public cloud hold prominent share of the market through 2020 and is expected grow at a CAGR of 16.4% during the forecast period. Based on end users, cloud services market can be segmented into government utilities, private organizations, healthcare, academics & education and supply chain management.
Private organisations lead the end user market due to the rapidly growing IT sector, which is contributing largely to the revenue streams of the private organizations segment. The segment is expected to grow at a CAGR of 24.1% during the forecast period and it is anticipated to register revenue of $86.8bn by 2020. Cloud services promote sector-specific services, which are customised for specific end users.