Massive growth of public sector cloud predicted

Written by Colin Marrs on 5 November 2014 in News

Public sector ICT cloud services will account for more than half of worldwide software, server and storage spending growth by 2018, according to new analysis.

A report by ICT market intelligence firm International Data Corporation (IDC) released this week said that public cloud services spending will grow from $56.6 billion in 2014 to more than $127 billion in 2018.

This represents a five-year compound annual growth rate of 22.8% - around six times the rate of growth for the overall IT market.

Frank Gens, senior vice president and chief analyst at IDC, said: “Over the next four to five years, IDC expects the community of developers to triple and to create a ten-fold increase in the number of new cloud-based solutions.”

"Many of these solutions will become more strategic than traditional IT has ever been.”

He said that, at the same time there would be unprecedented competition and consolidation among the leading cloud providers.

“This combination of explosive innovation and intense competition will make the next several years a pivotal period for current and aspiring IT market leaders," he added.

The adoption of “cloud first” strategies by public sector organisations will be one of the main factors driving the growth, according to the report.

It added that the cloud services market is now entering an innovation stage which is set to produce new, better value, solutions.

It said: “Many of these new solutions will be in industry-focused platforms with their own innovation communities, which will reshape not only how companies operate their IT, but also how they compete in their own industry.”

IDC said that because most customer demand is currently at the application level, software as a service (SaaS) will continue to dominate public IT cloud services spending, accounting for 70% of 2014 cloud services expenditures.

However, platform as a service (PaaS) and cloud storage services will be the fastest growing categories, driven by major rises in developer cloud services adoption and big data-driven solutions, respectively.

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