Cloud computing keeps growing as expected in 2019 too. Let’s take a look at what the researches say about the cloud ecosystem in 2019.
With the tech giants investments, cloud computing is now a multi-billion dollar economy and probably the broadest and the most complex ecosystem of technologies, products, and services. With more and more enterprises are moving to the cloud environment every day it seems like it will keep growing in 2020 too. But for now, let’s take a look at the numbers of 2019 in the cloud environment.
Three types of cloud computing services
For a better understanding of the cloud ecosystem, it is crucial to know the main cloud computing services. Each type has its own specific range of services provided. So here are the three main types of cloud computing services:
Infrastructure as a service (IaaS)
In IaaS, the cloud service provider supplies on-demand access to customers, such as networking, storage, and servers. In other words, the customer can run the platform and applications within the provider’s infrastructure. Customers can also scale the hardware provided by the cloud service provider to fulfill the storage and processing needs.
Platform as a service (PaaS)
In this version, the customer can develop, manage, and host applications in a cloud environment provided by the cloud service provider. The provider also offers a platform to support testing and development for the applications. And providers are also responsible for the infrastructure, security, operating systems, and backups.
Software as a service (SaaS)
In SaaS, the provider gives the customer access to their cloud-based software. So the customer will not be installing the software on a local device, instead, the provider gives the customer access to the provider’s software via the web or an API. Storing and analyzing data, installing, managing and upgrading the software is taken care of by the provider. There are three options for SaaS, public, private, and hybrid:
A private cloud is a service that you can host your own data center or intranet. Management, update, and upgrades on your own cloud ecosystem of server, networking, software, or platform resources will be owned by you. Thus, you should protect it with your own firewall or other security solutions.
In a public cloud, the provider offers you access to the data center. But unlike private cloud, in public cloud solutions, the cloud service provider is responsible for all management, maintenance, security, and upgrade processes.
As the name implies, a hybrid cloud solution is a mix of both public and private cloud services. Customers are responsible for interactions between these services.
24% growth from the previous year
According to the data published by the Synergy Research Group, across seven key cloud service and infrastructure market segments, operator and vendor revenues for the first half of 2019 passed the $150 billion milestone, having grown by 24% from the first half of 2018. IaaS & PaaS had the highest growth rate at 44%, followed by enterprise SaaS at 27%, UCaaS at 23% and hosted private cloud infrastructure services at 20%.
Across the whole cloud ecosystem, companies that featured the most prominently among the first half market segment leaders were Microsoft, Amazon/AWS, Dell EMC, Cisco, HPE and Google. Other major players included Salesforce, Adobe, VMware, IBM, Digital Realty, Equinix and Rackspace. In aggregate, these companies accounted for well over half of all cloud-related revenues.
$427 billion in 2019
According to the projection made by Gartner in the spring of 2019, worldwide IT spending is projected to total $3.79 trillion in 2019, an increase of 1.1 percent from 2018. The shift of enterprise IT spending from traditional (noncloud) offerings to new, cloud-based alternatives is continuing to drive growth in the enterprise software market. In 2019, the market is forecast to reach $427 billion, up 7.1% from $399 billion in 2018. The largest cloud shift has so far occurred in application software.
The data center systems segment will experience the largest decline in 2019 with a decrease of 2.8%. This is mainly due to the expected lower average selling prices in the server market driven by adjustments in the pattern of expected component costs.
Public cloud spending will double by 2023
According to the projections of IDC, worldwide spending on public cloud services and infrastructure will more than double over the 2019-2023 forecast period. With a five-year compound annual growth rate (CAGR) of 22.3%, public cloud spending will grow from $229 billion in 2019 to nearly $500 billion in 2023.
Software as a Service (SaaS) will be the largest category of cloud computing, capturing more than half of all public cloud spending throughout the forecast. SaaS spending, which is comprised of applications and system infrastructure software (SIS), will be dominated by applications purchases. The leading SaaS applications will be customer relationship management (CRM) and enterprise resource management (ERM). Infrastructure as a Service (IaaS) will be the second-largest category of public cloud spending throughout the forecast, followed by Platform as a Service (PaaS).
SaaS public cloud market share
Another research also made by Synergy in the summer of 2019 shows that the SaaS market is dominated by five vendors. In Q1 the enterprise SaaS market generated well over $23 billion of revenue for software vendors and will hit a $100 billion annual run rate in the current quarter. The market continues to grow at almost 30% per year. Microsoft has a worldwide market share of 17% and continues to enhance its overall market leadership, thanks primarily to its dominance in the high-growth collaboration segment.
Salesforce is the second-ranked vendor in the overall enterprise SaaS market thanks to being the dominant player in CRM, though this segment has relatively low growth compared to other SaaS segments. The two leaders are followed by Adobe, SAP, and Oracle, with SAP achieving the highest growth rate among these three. In aggregate these top five SaaS vendors now account for just over half of the total market. The next ten vendors account for another 26% of the market. Among these ten, the vendors with the highest growth rates are Google, ServiceNow, and Workday.
Public cloud infrastructure market share
The worldwide infrastructure as a service (IaaS) market grew 31.3% in 2018 to total $32.4 billion, up from $24.7 billion in 2017, according to Gartner. Amazon continued to lead the worldwide IaaS market with an estimated $15.5 billion of revenue in 2018, up 27% percent from 2017. The largest of the IaaS providers, Amazon accounts for nearly half of the total IaaS market.
Microsoft secured the #2 position in the IaaS market with revenue surpassing $5 billion in 2018, up from $3.1 billion in 2017. Alibaba Cloud, experienced the strongest growth among the leading vendors, growing 92.6% in 2018. The company has built an ecosystem consisting of managed service providers (MSPs) and independent software vendors (ISVs). Google came in at the #4 spot, growing 60.2% in revenue from 2017.
Reasons to choose cloud
More and more businesses moving to the cloud each year. There are some common reasons to choose cloud for most businesses and there are also some specific needs that can be fulfilled with cloud solutions more effectively and faster. Here are some of those reasons to choose cloud solutions:
Contracts with private data centers, hardware and software providers must be renewed periodically. This gives the businesses the opportunity to reconsider the specific services they need and the solutions that can fulfill those needs. Thus, businesses can make the transition easier to a more cost-effective cloud solution.
Data compliance can be a significant resource challenge if you are operating an on-premise solution. Evolution and continuing management of compliance regulations can easily be avoided by switching to a cloud service that is already compliant.
Whether it’s lack of equipment or skills, many businesses can find it hard to deal with constantly evolving cyber-attacks. As we all know, cloud service providers are prepared against most of the attacks that can occur. Shortly, in most cases, most of the cloud service providers can protect your data better than you can.
One of the most important motivations for moving to the cloud environment for businesses is cost savings. Depending on your business’ needs, you can choose the best cloud service for your company and it will reduce the resources spent in many ways.
Businesses can scale up or down their computing and storage capabilities almost immediately. Thus, companies will not have to pay more than they are using and they can scale up in unexpected rapid growth situations.
In today’s market, even short downtimes can affect your productivity, revenue, and reputation in a negative way. For those kinds of problems, cloud providers offer rapid data recovery, even during the event of outages. Shortly, cloud services ensure your system remains operational.
Cloud computing allows remote working and keeps your employees connected safely and productive even when they are on the move. With mobile access, they can access the system via their mobile devices.
Most major cloud service providers renewable energy in data centers. If you can choose one of those providers, you can lower your carbon footprint significantly.