IDC Says Public Cloud Computing Will Approach $70 billion in 2015

  • Cloud computing increasing

A new report from International Data Corporation (IDC) reveals that organizations across industries will shift steadily toward cloud-first strategies in order to enable digital transformation. According to the research firm, this year spending on public cloud computing will approach $70 billion. IDC’s new report is titled “Cloud Computing: The Essential Foundation of Industry Digital Transformation — Worldwide and U.S. Cloud Forecast by Vertical, 2015–2019,” and is available here.

IDC says Cloud is one of the key transformative forces impacting all areas of IT supply, composition, and consumption. The firm predicts the number of new cloud-based solutions will triple in the next four to five years as more intelligent solutions are built to support big data analytics, mobile and social solutions.

How does Cloud benefit different businesses and verticals?

The report indicates five top verticals will account for around 45% of the total spend for the market: discrete manufacturing, banking, professional services, process manufacturing and retail. It offers a forecast across 20 industries for the United States and worldwide, for three public cloud computing technologies (software as a service, platform as a service, and infrastructure as a service), as well as two primary software markets for SaaS (applications and system infrastructure software) and 1 primary software market for PaaS (application development and deployment).

Cloud enablers, cloud barriers

The study identifies industry drivers and barriers to the expansion of cloud technology, offering insights for leveraging cloud computing to create new value. On the plus side, as Cloud-based solutions have become easier to buy, purchasing power is migrating from IT departments to functional lines of business like marketing, finance and operations. At the same time, IDC notes enterprises remain concerned about loss of control over IT assets and deep legacy systems. Likewise administrators in government and the financial services industry are concerned about security and regulatory compliance.

IDC predicts industry-specific applications will drive more growth as businesses seek solutions that can be easily configured to their unique vertical requirements. As the number and diversity of Cloud services keeps growing, organizations across many industries will shift toward cloud-first strategies.

The innovations and enabling capabilities unleashed by cloud

“The technological innovations and enabling capabilities unleashed by cloud have fostered new opportunities across the industries,” says Eileen Smith, program manager, IDC Global Technology and Research Group. “As a result, it is necessary for both technology vendors and buyers to recognize the industry drivers and barriers of cloud deployment, to understand the business transformation brought by cloud, and to act upon the changes that will shape business and technology strategy in the coming years.”

IDC asserts that cloud services will remain the essential foundation of the IT industry’s 3rd Platform of growth. As the cloud market enters an “innovation stage,” there will be an explosion of new solutions and value creation on top of the cloud. IDC predicts that there will be more industry-specific cloud services platforms and marketplaces run by leaders in each industry seeking to attract communities of thousands of innovators to create valuable new services.

Smith concludes, “We have already seen such platforms and innovation communities in place in retail, financial services, media, and other industries. This will reshape not only how companies operate their IT but also how they compete in their own industry. Technology suppliers will continue to see significant demand for their industry-specific solutions. It is important for these suppliers to develop strong customer-partner relationships with cloud/platform players to seize new opportunities.”

These are the top-line findings from IDC:

  • IDC predicts that the public cloud computing will reach almost $70 billion in 2015 worldwide, with the top 5 verticals (discrete manufacturing, banking, professional services, process manufacturing, and retail) accounting for approximately 45% of the total spend for the market.
  • The major opportunities for cloud within verticals come from the development of intelligent industry solutions, which are built on top of a new platform that includes cloud as well as big data and analytics, mobile, and social.
  • Those IT suppliers that showcase the long-term benefits and the true value of the cloud as a platform in a given vertical (e.g., efficiency gains in business processes and improvement in customer acquisition/customer experience) will be most successful.
  • The ease of purchasing cloud-based solutions has helped transfer buying power from IT to functional lines of business like marketing, finance, and operations.
  • Security and regulatory remains the biggest barrier for cloud adoption across industries like government and financial services, while loss of perceived control over IT assets and massive legacy systems are also stumbling blocks for using cloud.

The study is the first of four reports IDC will publish analyzing the current status of cloud deployment in different vertical industries.

Who is John PaulsenA creator, family man and former small-business leader myself, I feel your pain (and joy) and hope you’ll enjoy the blog. I launched and ran a well-regarded production company in San Francisco with a team of 9 brilliant, hard working people. I learned to manage a wide array of tasks a small business must handle — business strategy, facilities design, HR, payroll, taxes, marketing, all the way down to choosing telecom equipment and spec’ing a server system to help my team collaborate in real-time on dense media projects from multiple production rooms. I’ve partnered with and learned from dozens of small business owners.

2015-08-04T23:24:00+00:00

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