ChannelLife Australia - SaaS, IaaS growing fast, but cloud advertising dominates public cloud spend

Cloud_.jpg

SaaS, IaaS growing fast, but cloud advertising dominates public cloud spend

Software- and infrastructure-as-a-service may be growing fast, but it’s cloud advertising which dominates the public cloud services revenue, according to Gartner.

The analyst firm is forecasting global public cloud services market revenue to grow 18.5% this year to hit US$260.2 billion, with Australia’s public cloud services market projected to grow 17.1% to AU$5 billion – up from $4.3 billion in 2016.

No New Zealand figures were available.

Sid Nag, Gartner research director, says as of 2016, around 17% of the total market revenue for infrastructure, middleware, application and business process services had shifted to the cloud.

That’s a figure the company expects to see increase to around 28% come 2021.

Gartner expects 70% of public cloud services globally to be dominated by the top 10 public cloud providers through to 2021.

“In the IaaS segment, Amazon, Microsoft and Alibaba have already taken strong positions in the market,” Nag says.

“In the SaaS and PaaS segments, we are seeing cloud’s impact driving major software vendors such as Oracle, SAP and Microsoft from on-premises, license-based software to cloud subscription models.”

Nag says SaaS is growing faster than previously forecast, leading to a significant uplift in the entire public cloud revenue forecast, with strategic adoption of platform-as-a-service also outperforming previous expectations.

SaaS is expected to grow 21% this year, hitting US$58.6 billion as providers deliver nearly all application functional extensions and add-ons as a service.

“This appeals to users because SaaS solutiosn are engineered to be more purpose-built and are delivering better business outcomes than traditional software is,” Gartner says.

Australian SaaS revenue is expected to grow 25.1%, to $1.9 billion. The highest revenue growth for Australia will come from cloud application infrastructure services, or platform-as-a-service, which is projected to grow 28.4% this year to reach $262 million.

However, despite their strong growth, SaaS, PaaS and IaaS, which is projected to hit $475 million this year, combined won’t hit the levels reached by cloud advertising, which is forecast to hit $2.9 billion in Australia this year – up from $2.6 billion in 2016.

Business process services is the second largest category, behind SaaS in Australia, with a forecast of $867 million for 2017, up from $814 million in 2016. It is the only category other than SaaS and cloud advertising forecast to crack the $1 billion mark in Australia by 2020.

Globally, cloud advertising is also dominating at $104.5 billion for 2017 versus 90.3 billion last year.

Nag says PaaS’ strong global showing comes on the back of increasing confidence from enterprises that PaaS will be their primary form of application development platform in the future.

Globally, the highest revenue growth will come from IaaS, which is forecast to grow 36.6% to reach US$34.7 billion.

Gartner says while public cloud revenue is growing more storngly than initially forecast, it expects growth to even out from 2018 onwards.

“This stabilisation reflects the increasingly mainstream status and maturity that public cloud services will gain within a wider IT spending mix.”

Interested in this topic?
We can put you in touch with an expert.

Follow Us

Featured

next-story-thumb Scroll down to read: