IHS Technology analysis and commentary on the first half (H1) 2016 Cloud Services for IT Infrastructure and Applications Biannual Market Tracker, which includes actual data for the half-year ended December 2015, follows.
Enterprises are driven to adopt off-premises cloud services to increase business agility and reduce costs.
The infrastructure-as-a-service (IaaS) segment for on-demand servers and storage is maturing, with the big three players—Amazon, Microsoft and Google—possessing the scale and specialized knowledge to make it difficult for smaller players with undifferentiated services to compete.
However, there is still room for innovation in IaaS. Rackspace has expanded its professional services to third-party clouds such as Amazon and Azure. NTT announced a self-serve OpenStack orchestrated bare metal server service. Internap is expanding its bare metal server service. And CenturyLink announced the availability of its government cloud, which meets specialized compliance requirements.
Even the earliest form of IaaS, colocation or “hosting,” is growing continuously, with Equinix and Level 3 expanding their data center footprints. Service provider–neutral data center providers and communication service providers have an opportunity to participate in a new wave of innovation by providing a single connection with service-level agreements (SLAs) to the enterprise, acting as a gateway to cloud service providers (CSPs).
Also set to bring more innovation are machine learning and analytics capabilities integrated with enterprise and mobile applications. Google released a machine learning service for developers, and IBM released three new Watson application programming interfaces (APIs) that provide developers with access to technology for sensing emotional and visual cues that deliver insights on the tone, emotional context and sentiments of voice, text and images.
CSPs are making steps towards the Meta-Cloud. Google announced new dashboard and orchestration tools that can manage and migrate workloads in its own data centers as well as in Amazon’s and on-premises data centers. In addition, NTT enhanced its enterprise cloud services with the ability to connect to third-party CSP data centers.
Cloud Services Market Highlights
- Globally, the off-premises cloud services market—including infrastructure as a service (IaaS), cloud as a service (CaaS), platform as a service (PaaS) and software as a service (SaaS)—reached $93 billion in 2015, growing 54 percent from 2014
- SaaS was the number-one off-premises cloud service in 2015, representing nearly half of all off-premises cloud revenue; IaaS was second with 39 percent of revenue
- The off-premises cloud service market is forecast to reach near $278 billion worldwide in 2020, with a five-year compound annual growth rate (CAGR) of 25 percent
Cloud Services Report Synopsis
The biannual IHS cloud services report provides market size, vendor market share, forecasts, analysis and trends for off-premises cloud services including infrastructure as a service (IaaS), cloud as a service (CaaS), platform as a service (PaaS), software as a service (SaaS) and SaaS subscribers. Vendors tracked include Amazon, AT&T, British Telecom, CA Technologies, CenturyLink, China Telecom, China Unicom, Cisco, Citrix, Deutsche Telekom, Equinix, Google, IBM, Internap, Level 3, Microsoft, NetSuite, NTT, Oracle, Orange, Rackspace, Salesforce, SAP, Tata Communications, Telefónica, Time Warner Cable, Verizon, Workday and others.