Visma Corporate Blog

Cloud – growth or hype?

I just returned from the Interop Cloud conference in New York. All the major players were there talking about the Cloud and what impact it will have on Enterprise IT. The message was quite clear. The Cloud is already here and the growth is propelling. Predicting future growth is a difficult and an uncertain exercise. But let’s take a look at what the forecasting companies are expecting for Cloud growth in the coming years. Some of these figures are not comparable as they are focusing on different areas and markets within Cloud Computing. Therefore we cannot compare the seemingly contradictory figures. But an aggregated view of their predictions might give us a direction.

IDC

In a recent report IDC (1) claims that the growth of public Cloud will go from $40 billion in 2012 to $100 billion in 2016. This constitutes a compound annual growth rate of 26 %, five times the rate of the IT industry overall. IDC sums up these figures with “vendor failure in cloud services will mean stagnation”.

McKinsey

The management consulting firm McKinsey (2) predicts that the worldwide market of public Cloud in the SMB segment will grow from $9 billion in 2010 to around $29 billion in 2015. This means a growth of more than 300 % in the period.

Gartner

In a 2012 report (3) Gartner analysts have forecasted an annual growth of the public Cloud market of 18 % until 2016, reaching a value of $ 206 billion. Of the service models IaaS will be the fastest grower.

Morgan Stanley

In a 2011 report from Morgan Stanley (4) they anticipate that public Cloud will have a 50 % annual growth rate for the next three years (as from 2011).

Forrester

Forrester Research (5) predicts the global Cloud market will grow from $40.7 billion 2011 to $241 billion by 2020.

Even though these figures vary, they all point to the same conclusion. Cloud is growing and will continue to grow faster than the total IT market and at double digit speed. In other words, prepare for the Cloud or get left behind.

Sources

(1)    http://www.idc.com/getdoc.jsp?containerId=prUS23684912

(2)    http://www.mckinsey.com/client_service/high_tech/latest_thinking/winning_in_the_smb_cloud

(3)    http://www.gartner.com/it/page.jsp?id=2163616

(4)    http://www.morganstanley.com/views/perspectives/cloud_computing.pdf

(5)    Forrester Research, Sizing the Cloud, April 2011

About

Currently Director Cloud in Visma Public & Large Accounts. Previously Product Director in Visma Unique. Cofounder and CEO of tech-startup company Deriga which was acquired by Visma in 2006. Holds a master's degree in Information Technology and also a master of Management.
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4 comments

  1. Thank you for sharing the forecast companies view in nutshell! In my opinion market is on the edge of realizing the capabilities and benefits of cloud services. Getting rid of time consuming routines and to have an access to pre-calculated figures have encouraged entrepreneurs to increase using these services more extensively in their businesses. Could the next big steps be seamless integrations between clouds and professional services?

  2. “Could the next big steps be seamless integrations between clouds and professional services?”

    IMHO it is (it will be) a main advantage of the cloud. The biggest benefits you get by combining software and accounting services. But this seems to be extremely diffcult for Visma in Finland.

    Nils, can you tell – when there will be Visma Inkasso in Finland?

    • Thanks for your feedback. In my opinion professional services that you refer to, is a layer in the Cloud. Business Process as a Service (BPaaS) is also an important part of the Cloud stack, but is less hyped than for instance SaaS. This means that any corporation may outsource not only hosting (IaaS) but also the actual business processes by leveraging the whole Cloud stack. The corporation can then access parts of the processes through SaaS (ie different data inputs, reports, and simple processes) while everything else is left to the BPaaS vendor. Read more on the layers here: http://blog.visma.com/blog/cloud-basics-the-layers/

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