What’s driving growth in public cloud revenue?

What’s driving growth in public cloud revenue?
More and more, end user entities are relying on cloud service which offers various benefits, chief among them reduced cost as users do not need to purchase and install equipment on-premise.
 
A recent study by Gartner citing double-digit growth in public cloud revenue corroborates this upward trend. According to the report, the worldwide public cloud services market is projected to grow 17.3 percent in 2019 to total US$206.2 billion, up from $175.8 billion in 2018. The same study forecasts that the market will grow 21 percent to $145.3 billion this year from 2017.
 
Cloud computing is typically divided into three main components, namely infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and software-as-a-service (SaaS). The report cites IaaS as the fastest-growing segment of the market with forecasted growth of 27.6 percent, from $31 billion in 2018 to $39.5 billion in 2019. The PaaS segment, meanwhile, is expected to see growth from US$15.2 billion in 2018 to $18.8 billion in 2019, the report said.
 

Integrated IaaS/PaaS

 
Also according to the report, by 2022, 90 percent of organizations purchasing public cloud IaaS will do so from an integrated IaaS and PaaS provider, and will use both the IaaS and PaaS capabilities from that provider.
 
“Demand for integrated IaaS and PaaS offerings is driving the next wave of cloud infrastructure adoption," said Sid Nag, research director at Gartner. “We expect that IaaS-only cloud providers will continue to exist in the future, but only as niche players, as organizations will demand offerings with more breadth and depth for their hybrid environments. Already, strategic initiatives such as digital transformation projects resulting in the adoption of multicloud and hybrid cloud fuel the growth of the IaaS market.”
 
Further, software-as-a-service (SaaS) remains the largest segment of the cloud market, with revenue expected to grow 17.8 percent to reach $85.1 billion in 2019, the report found.
 
“The increasing adoption of SaaS applications and other cloud services impacts the management, dissemination and exploitation of enterprise content,” Craig Roth, research VP at Gartner. “Organizations are steadily — but not exclusively — shifting their content environments to SaaS. Gartner expects that by 2019, the current enterprise content management (ECM) market will devolve into purpose-built, cloud-based content solutions and solution services applications.”

The report further cited a business process-as-a-service (BPaaS) category, where revenue will register a growth of 7.9 percent to reach $50.3 billion in 2019. “Especially in this category, buyers increasingly expect deep domain expertise, technology and global deployment capabilities from their providers as well as service portfolios that bridge legacy offerings and support new automated, digital and cloud service delivery paradigms,” the report said.
 

Security applications

 
As a matter of fact, the cloud business model is increasingly seen in security as well, as end users rely on the cloud for their video surveillance or access control needs. Rather than purchasing servers, recorders or other equipment, they transmit video and access control feeds to the cloud where the data is stored, processed and turned into actionable intelligence, all for a monthly fee. The simplicity and cost-savings that cloud provides is drawing more and more security users.
 
Meanwhile, some end users rely on cloud for compliance purposes as they are required by regulators to hold video footage at a remote site. In a previous report by asmag.com, James West, CEO and Co-Founder of cloud solutions provider Manything, pointed out: “For example the marijuana industry in Colorado … there is a mandate, a state law to hold the video offsite. That's a legal requirement, and there is not much of a technology solution other than cloud. The other one is for small businesses. For example, if you have a small business with a local recorder with 30 days, and you get a slip and fall claim from a lawyer one year later, you don't have enough storage for that. So it's an opportunity there.”


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