Forrester: Public cloud growth to surge, especially SaaS
- 27 April, 2011 05:51
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On the heels of the controversial Amazon EC2 cloud outage last week, research firm Forrester published a timely report on the growth potential of the major public cloud categories.
These are: IaaS (Infrastructure-as-a-Service), PaaS (Platform-as-a-Service) and SaaS (Software-as-a-Service).
Overall, Forrester's report, "Sizing the Cloud", predicts that the global market for cloud computing -- including the public cloud, the private cloud and the virtual private cloud -- will leap from $40.7 billion this year to more than $241 billion in 2020.
Of the total $40.7 billion, $25.5 billion comes from the public cloud. Enterprise IT directors are wary of the public cloud because it allows little customization and cloud resources are shared with thousands of other users, raising security concerns.
But despite Amazon's very public two-day outage last week, the future of the public cloud is bright, says Forrester. The highly scalable and pay-per-use public cloud model will grow to $159.3 billion of the total $241 billion cloud market in 2020, according to Forrester.
Here is a rundown of the growth potential, as stated by Forrester, and the key vendors for the three major public cloud categories.
IaaS (Infrastructure-as-a-Service)
Growth forecast: IaaS provides computing power, storage and archiving to a company with a utility pricing and delivery model. In other words, you hand over all of your IT infrastructure to a cloud provider, only pay for the cloud services you use, and potentially save a lot of money (But be sure to have a cloud outage workaround plan in place!)
But regardless of being the second largest public cloud category with a $2.9 billion market size, IaaS will taper off over the next decade as companies manage their IT infrastructure in virtual private clouds, says Forrester.
"Our analysis shows that IaaS will reach a peak of $5.9 billion in global revenues in 2014 and will then enter a period of significant commoditization, price deterioration and margin pressure," writes Forrester report authors Stefan Ried, Ph.D. and Holger Kisker, Ph.D.
"Between 2014 and 2020, as a result, the IaaS market will first stagnate and then decline, with total market revenues of $4.8 billion in 2020."
IaaS Vendors: Amazon Web Services Elastic Compute Cloud (EC2), Rackspace Cloud, Microsoft Windows Azure, Google App Engine.
PaaS (Platform-as-a-Service)
Growth forecast: PaaS is the middleware of the cloud, a place where you can design, test and deploy applications over the Web and eliminate the manual effort and cost of buying the underlying hardware, software and network capacity.
PaaS gets used in three ways: ISVs resell PaaS for newly built SaaS applications; service providers use PaaS to host apps in a virtual private cloud; or enterprise users migrate custom application development into the cloud through a PaaS model.
PaaS is the third largest cloud category with a market size of $820 million in 2011, and Forrester predicts steady growth as PaaS becomes a serious alternative for developing custom applications. Many ISVs have been using PaaS since 2010; usage in corporate application development will take off in 2011, while service providers will engage more with PaaS from 2012 on, the Forrester report states.
PaaS Vendors: Caspio, Cordys, Salesforce's Force.com, Google App Engine, Heroku, LongJump, Microsoft (Windows Azure), OrangeScape Technologies, Tibco, WaveMaker Software, WorkExpress.
SaaS (Software-as-a-Service)
Growth forecast: SaaS refers to when the software applications themselves, such as CRM or ERP, are hosted by a cloud provider and made available to customers over the Internet. It is the largest public cloud category by far.
Total revenues for SaaS in 2011 will reach $21.2 billion, and due to strong demand from companies of all sizes Forrester predicts that SaaS revenues will reach $92.8 billion by 2016, accounting for 26 percent of the total packaged software market.
After reaching a saturation point in 2016, SaaS growth will slow between 2016 and 2020, the Forrester report states.
But the SaaS model is so prevalent that it will only help other public cloud categories.
"Rapid growth in the number of SaaS end users will trigger good growth for PaaS and IaaS solutions, as the majority of SaaS vendors will rely on the platforms and infrastructures of their tier two PaaS and IaaS partners," the Forrester report states.
SaaS Vendors: Alteryx, Cisco Systems, Citrix Systems, Concorstorage, Emptoris, Google (Google Apps), IBM, Intuit, Ketera, Microsoft (Dynamics Online, Office 365), NetSuite, Oracle, RightNow Technologies, Salesforce.com (CRM), SAP, SuccessFactors, Taleo.
Shane O'Neill covers Microsoft, Windows, Operating Systems, Productivity Apps and Online Services for CIO.com. Follow Shane on Twitter @smoneill. Follow everything from CIO.com on Twitter @CIOonline and on Facebook. Email Shane at soneill@cio.com
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