Public cloud spending predicted to double by 2019 with storage booming

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Written by Business Cloud News

Cloud storageThe boom in public cloud service spending will propel AWS and Microsoft into the top five of the world’s biggest storage vendors, according to analysts.

Separate reports from IDC and the 451 Group suggest that the public cloud will growth overshadow the rest of IT and change the power balance.

The latest Public Cloud Services Spending Guide from IDC predicts that global spending on public cloud services will grow at six times the rate of the rest of the IT industry. With a 19.4% compound annual growth rate (CAGR) public cloud spending will double from last year’s $70 billion to $141 billion in 2019.

The popularity of Software as a Service (SaaS) will continue as it makes up two thirds of all public cloud spending in the forecast period. However Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) will grow faster, with spending on each rising by 27.0% and 30.6% respectively.

By 2018, most software vendors will have fully shifted to a SaaS/PaaS code base, predicted Frank Gens, Chief Analyst at IDC. This means the software industry is at a tipping point where SaaS becomes the preferred option.

The industries with the largest public cloud services expenditures in 2015 were discrete manufacturing at $8.6 billion, followed by banking and professional services at $6.8 billion and $6.6 billion, respectively. Telecommunications will be the fastest-growing vertical industry over the 2014-2019 forecast period with a worldwide CAGR of 22.2%. Other industries expecting a five-year CAGRs of over 20% are the media, government, education, retail, transport and utilities.

“The cloud is the future of IT but every organisation’s journey to the cloud is different and won’t always result in moving to a public cloud,” said Mark Ebden, strategic consultant at Trustmarque. However, he warned that companies need to assess the functions that can be moved to the cloud with the least disruption.

The fast growth of public cloud service companies is already disrupting the storage market, according to a 451 Research study. It found that public cloud storage will account for 17% of enterprise storage spending by 2017, up from 8% today. In some verticals like retail the public cloud will account for 25% of total storage spending by 2017.

Public cloud will shift the IT budget so that more money is spent on storage, according to the report. In addition, Amazon Web Services and Microsoft will become top five storage vendors by 2017. While the traditional storage players like leader EMC can dominate now, in two years spending on traditional SAN and NAS products will be more muted, said the report. Dealing with data and storage capacity growth is by far the single greatest pain point for storage managers and improving backup and disaster recovery will be the top storage objectives for 2016, according to 451 analyst Simon Robinson.