US$250b cloud ecosystem grew 32% in 2018


The cloud market ecosystem passed the US$250 billion mark in 2018, driven by annual growth of 32%.

That’s according to new data from Synergy Research Group, in compiling data across seven key cloud services and infrastructure market segments, operator and vendor revenues during the past 12 months.

Specific to technology, infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) segments reported the highest growth rate at 50%, followed by hybrid cloud management software at 41%.

Next in line, enterprise software-as-a-service and public cloud infrastructure both recorded an increase of 30 per cent, with hosted private cloud infrastructure services at 29%.

“Cloud started to go mainstream in the 2014-2016 period and we tagged 2017 as the year when cloud became the new normal,” said John Dinsdale, chief analyst at Synergy Research Group.

According to Dinsdale, in 2016, spend on cloud services first overtook spend on hardware and software used to build public and private clouds, with the gap “widening dramatically” during the past two years.

And despite a strong 2018 uptick in the growth rate for spending on cloud infrastructure, in aggregate, Dinsdale said spending on cloud service markets continues to grow much more rapidly.

“In 2018 cloud started to dominate IT spending in some areas, sucking up potential growth opportunities for non-cloud technologies and services,” Dinsdale added.

In assessing the market leaders, vendors that featured most prominently during 2018 including Microsoft, Amazon Web Services, Dell EMC and IBM, followed by Salesforce, Cisco, Hewlett Packard Enterprise, Adobe and VMware.

Collectively, these nine accounted for “well over half” of all cloud-related revenues, Dinsdale said.

“Cloud technologies are now generating massive revenues for both cloud service providers and technology vendors,” Dinsdale explained.

“Our latest forecasts show that while market growth rates will inevitably erode due to the sheer scale of the numbers, the overall market will double in size in under four years.”

In 2018, total spend on hardware and software used to build cloud infrastructure exceeded US$100 billion – “somewhat evenly split between public and private clouds” – though spend on public cloud continues to grow more rapidly.

Delving deeper, infrastructure investments by cloud service providers helped them to generate over US$150 billion in revenues from cloud infrastructure services (IaaS, PaaS, hosted private cloud services) and enterprise SaaS, in addition to which their infrastructure supports internet services such as search, social networking, email, e-commerce, gaming and mobile applications.

“Hybrid cloud management software is an extremely small segment compared to the others, but it is increasingly vital in enabling enterprises to seamlessly stitch together public cloud services and internal IT assets,” Dinsdale said.

Meanwhile UCaaS, “while in many ways a different type of market”, is also growing strongly and is driving some radical changes in business communications, Dinsdale added.

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