Cloud market reached US$148 billion in 2016: research

Cloud growth by segment & market leaders in 2016 (source: Synergy Research Gp)Revenues of cloud operators and vendors, including Amazon Web Services, Microsoft, IBM, Rackspace and Salesforce, in six key cloud services and infrastructure market segments have grown by 25% on an annualized basis in 2016, reaching US$148 billion, according to US-based analyst firm Synergy Research Group.

"The major barriers to cloud adoption are now almost a thing of the past, especially on the public cloud side"
-- Jeremy Duke, founder and chief analyst, Synergy Research Group

The six key cloud market segments are: infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), hosted private cloud, enterprise software-as-a-service (SaaS), unified communications-as-a-service (UCaaS), public cloud and private cloud.

According to new research data from Synergy Research, the IaaS & PaaS segment experienced the highest growth rate at 53%. This was followed by hosted private cloud infrastructure services at 35%, and afterwards, enterprise software-as-a-service at 34%.

In 2016, the spending on cloud services has overtaken the spending on cloud infrastructure hardware and software, noted Synergy Research Group. In aggregate, the cloud service markets are now growing three times more quickly than the cloud infrastructure hardware and software market.

Cloud market leaders in 2016

The companies that were featured as the most prominently among the 2016 market segment leaders were Amazon Web Services, Microsoft, HPE, Cisco, IBM, Salesforce and Dell EMC, noted Synergy Research Group.
Over the period Q4 2015 to Q3 2016, the total spend on hardware and software to build cloud infrastructure exceeded US$65 billion, with spend on private clouds accounting for over half of the total but spend on public cloud growing much more rapidly.

Investments in infrastructure by cloud service providers helped them to generate almost US$30 billion in revenues from cloud infrastructure services (IaaS, PaaS, hosted private cloud services) and over US$40 billion from enterprise SaaS, in addition to supporting internet services such as search, social networking, email and e-commerce.

UCaaS, while in many ways a different type of market, is also growing steadily and driving some radical changes in business communications.

"We tagged 2015 as the year when cloud became mainstream and I'd say that 2016 is the year that cloud started to dominate many IT market segments," said Synergy Research Group's founder and chief analyst Jeremy Duke.

"The major barriers to cloud adoption are now almost a thing of the past, especially on the public cloud side. Cloud technologies are now generating massive revenues for technology vendors and cloud service providers and yet there are still many years of strong growth ahead."