Public cloud revenue to grow 21.4% in 2018: Gartner

Global public cloud services revenue is projected to grow 21.4% to $186.4 billion in 2018, up from $153.5 billion in 2017, said market research firm Gartner.

The fastest-growing segment, cloud system infrastructure services, or IaaS, is estimated to grow 35.9% to $40.8 billion. The Gartner report also said that the top 10 providers will account for nearly 70% of the IaaS market by 2021, up from 50% in 2016.

“The increasing dominance of the hyperscale IaaS providers creates both enormous opportunities and challenges for end users and other market participants,” said Sid Nag, research director at Gartner.

“While it enables efficiencies and cost benefits, organisations need to be cautious about IaaS providers potentially gaining unchecked influence over customers and the market. In response to multi-cloud adoption trends, organisations will increasingly demand a simpler way to move workload, applications and data across cloud providers’ IaaS offerings without penalties.”

The report said software as a service (SaaS) remained the largest segment of the cloud market, with revenue expected to grow at 22.2% to reach $73.6 billion in 2018. It expects SaaS to account for 45% of the total application software spending by 2021.

“In many areas, SaaS has become the preferred delivery model,” Nag said. “Now SaaS users are increasingly demanding more purpose-built offerings engineered to deliver specific business outcomes.”

Within the platform as a service (PaaS) category, the fastest-growing segment, according to the report, is database platform as a service (dbPaaS), which is expected to reach $10 billion by 2021. Hyperscale cloud providers are increasing the range of services they offer to include dbPaaS, the report added.

“Although these large vendors have different strengths, and customers generally feel comfortable that they will be able to meet their current and future needs, other dbPaaS offerings may be good choices for organisations looking to avoid lock-in,” said Nag.

The report excludes cloud advertising, which was removed from Gartner's public cloud service forecast segments in 2017.

In January, Gartner had said that global IT spending will touch $3.7 trillion in 2018, up 4.5% from the 2017 figure.

“Global IT spending growth began to turn around in 2017, with continued growth expected over the next few years. However, uncertainty looms as organisations consider the potential impacts of Brexit, currency fluctuations and a possible global recession,” said John-David Lovelock, research vice-president at Gartner.