According to a report released by Synergy Research Group, the cloud has become the preferred solution for companies’ data handling and application management. A 24% growth of the overall cloud market occurred in 2017.
The cloud market has grown to a $180 billion industry.
“We tagged 2015 as the year when cloud became mainstream and 2016 as the year when cloud started to dominate many IT market segments. In 2017 cloud was the new normal,” said John Dinsdale, Synergy Research Group’s chief analyst.
Investments are Paying Off
Over the past three years, lower costs and increased spending on innovation for Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) offerings have drawn more companies to turn to the cloud.
SaaS and PaaS options from Microsoft and Amazon’s AWS gained a substantial growth rate of 47% last year. Enterprise SaaS solutions grew 31%, led by industry giants Microsoft and Salesforce.
Hosted private cloud solutions, which enable companies to create their closed cloud-based system also experienced a substantial 30% gain.
Notably, it was not the price of the hardware or software used to build the clouds that gained the most. It was the applications and platforms built on it. Cloud service markets are growing at three times the rate of infrastructure hardware and software.
That’s not to say investments in infrastructure are stagnant. Spending topped $80 billion between Q4 2016 and Q3 2017. This investment spurred over $100 billion in revenue. This includes cloud infrastructure services (IaaS, PaaS, hosted private cloud services) and enterprise SaaS.
“Major barriers to cloud adoption are now almost a thing of the past, with previously perceived weaknesses such as security now often seen as strengths.” Dinsdale continued, “Cloud technologies are now generating massive revenues for cloud service providers and technology vendors and we forecast that current market growth rates will decline only slowly over the next five years.”
